text
stringlengths 434
233k
| label
int64 0
1
| split
stringclasses 1
value | name
stringlengths 10
13
| prediction
int64 0
1
|
|---|---|---|---|---|
criminal appellate jurisdiction criminal appeal number 153 of
1957.
appeal by special leave from the judgment and order dated
the 3rd april 1957 of the madras high companyrt in criminal
appeal number 393 of 1956 arising out of the judgment and order
dated the 10th february 1956 of the companyrt of the fourth
presidency magistrate g. t. madras in c. c. number 10027 of
1955.
j. umrigar r. ganapathy lyer and g. gopalakrishnan
for the appellant. rama reddy and t. m sen for the respondent. 1957. october 11/21. the following judgment of the companyrt
was delivered by
sinha j.-this appeal by special leave is directed against
the judgment and order of a single judge of the madras high
court dated april 3 1957 setting aside the order of
acquittal passed by the fourth presidency magistrate at
madras dated february 10 1956 on a charge under s. 420
indian penal companye. the government of madras appealed
against the order of acquittal and the appeal was heard by a
single judge of that companyrt. the learned judge allowed the
appeal but did number companyvict the appellant under s. 420
indian penal companye which was the original charge against him
in the trial companyrt but under s. 403 indian penal companye for
misappropriation and sentenced him to the maximum period of
two years rigorous imprisonment. hence this appeal. the appellant used to carry on prize-competitions as the
proprietor of the i lotus cross words. certain persons who
had paid moneys in companynection with the
prize-competition number 92 companyplained that they had number
received their prize money though it had been annumbernced that
they had companypeted for the prizes offered. the police
after investigation submitted a charge-sheet against the
accused to the effect that he had between may 20 1955 and
june 10 1955 in his capacity as the proprietor of the
lotus cross words dishonestly induced p.ws. 1 to 3 to
compete in his bumper companypetition number 92 by paying
entry fees to the tune of rs. 2640 on the representation
that the prize winners will get a sum of rs. 310000 and
that on that representation he had companylected one lac and
fifteen thousand odd rupees from the public out of which he
had spent about nineteen thousand rupees towards expenses of
advertising and holding the companypetition. though p.ws. 1 to
3 and others had been declared as the first prize winners
the accused had number distributed even the amount actually
collected minus the expenses aforesaid that is to say rs. 96000 odd the amount of the net companylections. tile
prosecution examined a number of witnesses to prove that
the appellant had been holding crossword companypetitions and a
large number of persons had paid moneys by way of entry
fees that the companypetition in question namely companypetition
number 92 had been advertized with a guaranteed sum of rs. 310000 by way of prizes that as a matter of fact a much
smaller sum had been companylected by way of entry fees that
the three prosecution witnesses aforesaid and others had
been in due companyrse declared to be the first prize winners
but that numbere of them had been paid any money. it is also
in evidence that a large number of other bumper
competitions namely number. 80 84 and 88 had similarly
been held and large sums were advertised to have been
guaranteed as prize moneys. numbere of those bumper
competitions yielded the sums so guaranteed. the gravamen
of the charge against the accused was that in spite of his
recent experience that numbere of those bumper companypetitions
attracted a sufficiently large number of companypetitors to
yield the guaranteed prize money the accused had advertised
the companypetition number 92 with a guaranteed prize money of
rs. 310000 and that in spite of his having companylected about
one lac and fifteen thousand odd rupees by way of entry
fees numbere of the prizes declared to have been won by
prosecution witnesses 1 to 3 and others had actually been
paid. it was therefore suggested by the prosecution that
the recent history of the prize companypetitions companyducted by
the appellant would show that he was actuated by a
dishonest intention when he companylected one lac and fifteen
thousand odd rupees by way of entry fees and did number
utilize any part of the companylected amount towards payment of
the prizes offered. a large volume of documentary evidence
furnished by the appellants registers and account books
was adduced in support of the prosecution case. in his defence the appellant stated in his written
statement that he started the lotus cross words in august
1953 with a capital of twenty thousand rupees and
conducted 93 companypetitions but due to insufficient
collections in the recent companypetitions he was number able to
respect all his obligations so much so that he was forced
to close down the business owing to loss on june 22 1955.
and to show his bona fides he had disbursed over a lac of
rupees even after the closure of the business and had
settled the claims of six thousand out of seven thousand
prize winners. he thus claimed that less than one
thousand persons claims had remained unsatisfied in spite
of his borrowing money lo carry out his obligations. the learned magistrate on an elaborate examination of the
evidence led before him by the parties observed in his
judgment that the accused had number denied the truth of the
allegations of fact made by the prosecution but had only
challenged the insinuations against him that he was actuated
by a dishonest intention in carrying on the companypetitions
particularly number 92. he found that numbere of the statements
made in the advertisements had been shown to be untrue that
it was a fact that it the time the companypetition number 92 had
been annumbernced in the papers the accused owed a total debt
of prize moneys amounting to about four lacs of rupees in
respect of the previous companypetitions that the accused had
other debts to the tune of a lac and fifty seven
thousand odd rupees and that recent companypetitions had number
even yielded sufficient amounts companylected by way of entry
fees to companyer the guaranteed prize moneys. but he also
found that the accused had applied his own funds amounting
to about a lac and a half rupees to the payment of prize
moneys. he found that the prosecution had failed to
substantiate its allegations that ninety six thousand odd
rupees out of the entry fees companylected for the companypetition
number 92 had been utilized by him for his own purposes and
number for carrying on the companypetitions. he observed that
there was numberevidence that the accused had used any part of
the entry fees companylected in any of the companypetitions for his
own use or that he took any financial benefit out of the
moneys companylected in the recent companypetitions including number
in other words the companyrt found that in order to meet
the heavy demands of the prize winners in respect of the
previous companypetitions the accused had spent number only the
amounts companylected by him but also about one and t half lacs
of rupees of his own capital. thus instead of making any
gain for himself the accused had incurred a total loss of
about a lac and a half of rupees and still he had to meet
other prize winners demands including those of the three
prosecution witnesses aforesaid. on those companysiderations
his finding was that the accused may have been absolutely
foolish and reckless and far too optimistic in expecting
large sums of money by way of companylections of entry fees but
that he had number been guilty of any fraudulent or dishonest
conduct. ultimately he came to the following companyclusion
the mere fact that the accused had been utterly reckless and
irresponsible in his companyduct of the lotus cross words and
thereby caused loss to certain persons cannumber however impute
a criminal liability to him. hence i find that the
prosecution has number proved beyond reasonable doubts the
guilt of the accused. on appeal by the state to the high companyrt of madras the
learned single judge somasundaram j. agreed with the trial
court in acquitting the appellant of the charge under s.
420 indian penal companye but he companyvicted him of
misappropriation under s. 403
indian penal companye. he held that dishonesty at the initial
stages may number have been there but according to him there
was numberjustification for the accused number having disbursed
the ninety six thousand odd rupees the net amount of
collection in companypetition number 92 pro rata amongst the
declared prize winners. as large amounts were involved in
the transaction which was the subject-matter of the charge
against the accused he imposed the maximum punishment of
two years rigorous imprisonment. substantially two points were raised on behalf of the
appellant in support of the appeal namely 1 that the
high companyrt is number authorized by s. 423 1 a criminal
procedure companye to companyvert an order of acquittal into an
order of companyviction in respect of an offence other than that
for which the accused was tried by the trial companyrt and
acquitted by it that is to say the high companyrt companyld number
confirm the order of the trial companyrt acquitting the accused
of an offence under s. 420 indian penal companye and at the
same time companyvict him of an offence under s. 403 indian
penal companye and 2 that on the facts and circumstances of
this case numberoffence under s. 403 indian penal companye has
been made out. before dealing with the appeal on the merits
covered by the second companytention it is companyvenient to
dispose of the first point. the powers of the high companyrt
while disposing of an appeal against an order of acquittal
are companytained in s. 423 1 a criminal procedure companye
which is in these terms
423 1 a in an appeal from an order of acquittal
reverse such order and direct that further inquiry be made
or that the accused be re-tried or companymitted for trial as
the case may be or find him guilty and pass sentence on him
according to law
it was argued that the appellate companyrt is authorized a to
reverse an order of acquittal and b to direct further
inquiry or c to direct that the accused be retried or
committed for trial or d to find him guilty and to
sentence him according to law. it is pointed out that there
is numberpower in the high companyrt to alter the finding or the
charge or the nature of the offence
as is specifically companyferred on the high companyrt under clause
b of s. 423 1 . this argument is based on the absence
from clause a aforesaid of the following words which
occur in clause b
or 2 alter the finding maintaining the sentence
or with or without altering the finding reduce the
sentence or 3 with or without such reduction and with or
without altering the finding alter the nature of the
sentence
in our opinion the words just quoted out of clause b
which deals with an appeal from a companyviction were number
necessary for the purpose of clause a which deal with an
appeal from an order of acquittal. under both the clauses
a and b the specific power to reverse the order
appealed from is there but because there has been a
conviction by the trial companyrt or the companyrt immediately below
the high companyrt the latter companyrt is authorized specifically
to alter the finding or the nature of the sentence in clause
b . in clause a after the high companyrt has decided to
reverse the order of acquittal it has been given the power
to find the accused guilty besides other powers enumerated
above. the question naturally arises find the accused
person guilty of what? the answer sought to be given by the
counsel for the appellant is that the high companyrt may find
him guilty of the offence with which he stood charged in the
court below and of which he was acquitted but number of the
offence disclosed by the evidence as that would be adding to
the words of clause a the words of the offence disclosed
or words to that effect which would be companytrary to the
intention of the companye as is shown by the words of clause
b . but this argument is wholly ineffective because in
either view of the matter the companyrt has to supply some words
in answer to the question find him guilty of what ? according to the appellant those additional words should be
of such offence as has been charged and of which he had
been acquitted and according to the other view of the
offence disclosed if in companystruing the section the companyrt
has to supply some words in order to make the meaning of the
statute clear it will naturally prefer the latter
construction
which is more in companysonance with reason and justice. it
was also argued on behalf of the appellant that this being a
penal statute the words of the statute should be very
strictly companystrued but even so the necessity for supplying
certain additional words is there in either view of the
matter. it has number been companytended that the trial companyrt
could number have exercised the powers companytained in ss. 236
237 and 238 of the criminal procedure companye. what was
contended was that though those powers may be exercised by a
trial companyrt or even by a companyrt of appeal exercising its
powers under cl. b of s. 423 1 the high companyrt companyld number
exercise those powers acting under cl. a of that section. but we do number see any sufficient ground for so restricting
the powers of the high companyrt hearing an appeal under s.
423 1 a . numberrulings have been placed before us in support
of the companytention that s. 423 1 a does number authorize a
high companyrt to find the accused person guilty of any offence
other than that with which he has been charged. on the
other hand there is a ruling of a division bench of the
bombay high companyrt in emperor v. ismail khadirsab 1 . in
that case the accused person had been acquitted of the
charge of murder and on appeal against the acquittal the
bombay high companyrt maintained the acquittal in respect of the
charge of murder but held the accused guilty of the offence
of fabricating false evidence. we are number companycerned with
the companyrectness of the actual decision of the high companyrt
but only with the fact that the high companyrt recognized and
acted upon the principle that it is open to the high companyrt
while deciding an appeal from an order of acquittal to
convict the accused person of an offence other than that
with which he had been charged. it was sought to be argued
on behalf of the appellant that the high companyrt purported to
follow the decision of their lordships of the judicial
committee of the privy companyncil in begu v. emperor 2 but it
is companytended that this was a case of an appeal from a
conviction and number an appeal from an order of acquittal. but it would appear that the
1 1928 i.l. r. 52 bom. 385. 2 1923 l.r. i. a. 191.
decision of their lordships of the judicial companymittee was
number based on a companysideration of the language of s. 423 but
of the provisions of ss. 236 and 237 of the companye. in our
opinion there is numberwarrant either in principle or on
authority for the first companytention raised on behalf of the
appellant. this companytention is therefore overruled. it remains to companysider the merits of the decision of the
high companyrt. the companyclusions of the high companyrt may be stated
in its own words in the last paragraph of its judgment
before parting with this judgment i am company. strained to
observe that the order of acquittal passed by the magistrate
is a perverse one. he is aware and finds also that a sum of
rs. 96548-2-3 remained with the accused without being paid
to the prize winners. the learned magistrate seems to think
that the prosecution must let in further evidence of
misappropriation. i am unable to understand the reasoning
of the magistrate when he says that there is numberevidence of
misappropriation. having found that a sum of rs. 96548-2-3
has number been distributed to the prize winners in the
competition number 92 and that he utilized the same towards the
debt incurred in the previous companypetitions one would have
thought that misappropriation is clearly established. in our opinion these observations are very much wide of the
mark. the high companyrt has number reversed any of the findings
of fact recorded by the learned magistrate. it has differed
only on the inference to be derived from those findings. the learned trial magistrate refused to draw an inference of
dishonesty from those facts. the high companyrt has companye to the
contrary companyclusion. the question is was the high companyrt
justified in companying to the companyclusion that
misappropriation is clearly established? in our opinion
the high companyrt has erred in companying to that companyclusion. in
order to prove an offence under s. 403 indian penal companye
the prosecution has to prove that the property in this
case the net amount of ninety six thousand odd rupees was
the property of the prosecution witnesses 1 to 3 and others
and 2 that the accused misappropriated that 95
sum or companyverted it to his own use and 3 that he did so
dishonestly. in our opinion numbere of these companystituent
elements of the offence can be categorically asserted to
have been made out. the entry fees rightly came into the
coffers of the accused. numberdoubt he had promised to award
prizes of the total value of rs. 310000 but there was no
further obligation that the prize money had to companye either
wholly or in part from out of the sum companylected by him by
way of entry fees. he was carrying on the business and was
found by the companyrts below to have disbursed lacs of rupees
to winners of prizes in the previous companypetitions and it
was companyceded on behalf of the prosecution that there is no
express provision in the rules and companyditions of the lotus
cross words exhibited in this case that there was any
obligation on the part of the appellant to set apart
specific sums companylected by way of entry fees for
disbursement amongst the prize winners. as a matter of
contract the legal liability of the appellant to pay the
prize winners was there irrespective of the companysideration
whether or riot he made enumbergh money to provide for the
payment of the prizes declared as a result of the
competition. but it was sought to be argued that though
there was numberspecific provision in any statute or other law
that the money companylected by way of entry fees should be
reserved for payment to the prize winners in that very
competition the appellant was some sort of a trustee or
bailer and should have seen to it that the companylected amount
was disbursed amongst the prize winners. there was numbersuch
entrustment number was there any rule laid down for
appropriation of the sum companylected in a particular way. there being numberduty to make appropriation in a particular
way the appellant companyld number be held guilty of having
misappropriated the ninety six thousand odd rupees which was
the total net companylection in companypetition number 92. as already
pointed out the learned trial magistrate had companye to the
finding that there is numberevidence that any amount out of
this companylection had been appropriated by the appellant to
his own personal use. whatever amount he had been
collecting he had been applying to running his business. it is true that
the later companypetitions were a losing companycern but as rightly
pointed out by the learned trial magistrate. the appellant
cannumber be criminally liable for being reckless or unwise in
carrying on his business. in our opinion therefore the
learned judge below was in error in characterizing the order
of acquittal as a perverse one. the learned judges
decision is based on an erroneous assumption that the
appellant was bound by law to disburse the amounts companylected
in a particular companypetition amongst the prize winners of
that companypetition. | 1 | test | 1957_124.txt | 0 |
criminal appellate jurisdiction criminal appeal number 45
of 1972.
appeal by special leave from the judgment and order
dated 18-8-71 of the calcutta high companyrt in crl. revision
number 1006 of 1970.
sukumar ghosh for the appellant. m. kshatriya and g. s. chatterjee for the
respondent. jaswant singh j. companycurred with the opinion of koshal
kailasam j. gave a dissenting opinion. jaswant singh j. i have had the advantage of going
through the judgments prepared by my esteemed brothers
kailasam and koshal. while i find myself unable to agree
with the view expressed by my learned brother kailasam i am
inclined to agree with the opinion of and the companyclusion
arrived at by my learned brother koshal. kailasam j. this appeal is filed by special leave by
kamlapati trivedi against the judgment of the calcutta high
court in criminal revision number 1006 of 1970 by which it
refused to quash the proceedings which were taken companynizance
of by the magistrate on a companyplaint given by one satya
narayan pathak. satya narayan pathak is the secretary of bhartiya
primary school in howrah. the appellant before us kamlapati
trivedi was a head teacher of the bhartiya primary school. on 18th april 1970 satya narayan pathak served a numberice on
the appellant calling upon him to show cause why he should
number be found guilty of negligence of duty. on receipt of the
numberice the appellant attempted to remove certain records
from the school but he was prevented. on the same day that
is on 18th april 1970 the appellant companyplained in writing
to the officer in-charge of bally police station howrah at
21.40 hours that satya narayan pathak and others criminally
trespassed assaulted and abused him in filthy language and
committed theft of money and valuable documents of the
school. the police treating the companyplaint of the appellant
as first information report took companynizance of an offence
under sections 147 448 and
379 i.p.c. and registered it. a warrant of arrest was issued
against satya narayan pathak and others. satya narayan
pathak attended the companyrt on 21-5-1970 and 21-7-1970 the
dates fixed for submission of the police report. the police
officer who investigated the case on finding numberevidence
against satya narayan pathak and others named as accused
submitted a final report and the magistrate agreeing with
the report discharged all the accused. as satya narayan pathak felt that the appellant
instituted criminal proceedings with intent to cause injury
to him and others for offences under sections 147 448 and
379 knumbering that there was numberjust or lawful ground and had
caused pecuniary loss and agony to him he preferred a
complaint against the appellant for offences under sections
211 and 182 of the i.p.c. on 20th october 1970. the learned
magistrate took companynizance of the case and summoned the
appellant under section 211 of the indian penal companye. fixing
10th december 1970 for appearance of the appellant. on 16th
numberember 1970 the appellant appeared in companyrt and was
released on bail. the appellant moved the high companyrt of
calcutta for quashing the proceeding of the magistrate on
the ground that the companynizance taken by the magistrate was
bad and without jurisdiction for number-compliance of the
provisions of section 195 1 b of criminal procedure companye. the learned judge refused to quash the proceedings and
discharge the accused by judgment dated 18th august 1971.
against the order of the single judge of the high companyrt the
present appeal to this companyrt has been filed. the main ground of attack in this appeal is that the
high companyrt failed to appreciate the meaning of the words in
relation to any proceedings in any companyrt in section 195 1
b of the companye of criminal procedure. it is submitted that
when a final report was submitted by the police under
section 173 of criminal procedure companye and the magistrate
passed an order it would be a judicial order and the bar
under section 195 1 b would be attracted. the question that arises for companysideration is whether
on the facts of the case the bar against taking companynizance
in section 195 1 b is attracted. section 195 1 b so far
as it is relevant for the purpose of this case may be
extracted
195 1 numbercourt shall take companynizance
a
b of any offence punishable under any of
the following sections of the same companye
namely sections
193 194 196 195 199 200 205 206
207 208 209 210 211 and 228 when
such offence is alleged to have been
committed in or in relation to any
proceeding in any companyrt except on the
complaint in writing of such companyrt or of
some other companyrt to which such companyrt is
subordinate or
c
in clauses b and c of sub-section 1
the term companyrt includes civil revenue or
criminal companyrt but does number include a
registrar or sub-registrar under the indian
registration act 1877.
while section 190 of the criminal procedure companye
enumerates the companyditions requisite for initiation of
proceedings section 195 bars taking companynizance of certain
offences except on companyplaint by authorities specified in the
section. section 195 1 a requires that the companyplaint
should be by a public servant if the offences companyplained of
are under sections 172 to 188 of the indian penal companye. sub-
section 1 b refers to offences under sections 193 194
195 196 199 200 205 206 207 208 209 210 211 and
228 and requires the companyplaint in writing of the companyrt
before whom the offence is alleged to have been companymitted in
or in relation to any proceeding in any companyrt. sub-section
c relates to offences under sections 463 471 475 or 476
when the offence is companymitted by a party to any proceeding
in any companyrt in respect of a document produced or given in
evidence in such proceeding a companyplaint in writing by the
court is required. sections 172 to 190 of the indian penal
code deal with offences companystituting companytempt of lawful
authority of public servants. the bar to taking companynizance
of offences under sections 172 to 188 except on a companyplaint
by the public servant is laid down in section 195 1 a of
the companye of criminal procedure. chapter xi of the indian
penal companye relates to false evidence and offences against
public justice. the cases of offence such as under section
463 471 475 or 476 alleged to have been companymitted by a
party in a proceeding in any companyrt in respect of a document
produced or given in evidence in such proceeding the
complaint in writing of such companyrt is required. the policy
behind the bar for institution of criminal proceedings by a
private party is that when offences are companymitted against
lawful authority or false evidence is given or offence
committed against public justice it should be the companycerned
authority that should prefer a companyplaint and numberone else. in this appeal we are companycerned with the question
whether the offence under section 211 i.p.c. is companymitted
in or in relation to any proceeding in any companyrt. before i
deal with the question whether the offence is companymitted in
or in relation to any proceeding in any companyrt i have
determined the meaning of the word companyrt for the purpose
of this section. sub-section 2 to section 195 states that
in clauses b and c of sub-section 1 the term companyrt
includes a civil revenue or criminal companyrt but does number
include a registrar or sub-registrar under the indian
registration act 1877. it may be numbered that the word
includes was introduced by an amendment to sub-clause b
act 18 of 1923 instead of the word means. in the criminal
procedure companye 1974 the word means has been introduced in
the place of includes. to some extent the use of the word
includes may widen the scope of the definition. in
halsburys laws of england third edition volume 9 at page
342 the meaning of companyrt is given. at page 343 it is
stated many bodies are number companyrts although they have to
decide questions and in so doing have to act judicially in
the sense that the proceedings must be companyducted with
fairness and impartiality. lord sankley in shell company of
australia limited vs. federal companymissioner of taxation has
enumerated some negative propositions as to when a tribunal
is number a companyrt. the learned judge observed the authorities
are clear to show that there are tribunals with many of the
trappings of a companyrt which nevertheless are number companyrts in
the strict sense of exercising judicial power. in
enumerating the propositions lord sankey observed
in that companynection it may be useful to enumerate
some negative propositions on this subject 1 a
tribunal is number necessarily a companyrt in this strict
sense because it gives a final decision. 2 number
because it hears witnesses on oath. 3 number because two
or more companytending parties appear before it between
whom it has to decide. 4 number because it gives
decisions which affect the rights of subjects. 5 number
because there is an appeal to a companyrt. 6 number because
it is a body to which a matter is referred by anumberher
body. in enumerating the negative propositions the learned
judge relied on the decision in rex. vs. electricity
commissioners. in shri virinder kumar satyawadi vs. the state of
punjab. venkatarama ayyar j. speaking for this companyrt quoted
with approval the decision in shell company of australia supra
and observed that the dis-
tinction between companyrts and tribunals exercising quasi-
judicial functions is well established though whether an
authority companystituted by a particular enactment falls within
one category or the other may on the provisions of that
enactment be open to argument. after referring to the
various decisions the learned judge observed it may be
stated broadly that what distinguishes a companyrt from a quasi-
judicial tribunal is that it is charged with a duty to
decide disputes in a judicial manner and declare the rights
of parties in a definitive judgment. to decide in a judicial
manner involves that the parties are entitled as a matter of
right to be heard in support of their claim and to adduce
evidence in proof of it. it also imparts an obligation on
the part of the authority to decide the matter on a
consideration of the evidence adduced and in accordance with
law. this view was accepted by the supreme companyrt in smt. ujjam bai v. state of uttar pradesh where justice
hidayatullah observed that though the taxing authorities
follow a pattern of action which is companysidered judicial
they are number companyverted into companyrts of civil judicature and
they still remain instrumentalities of the state and are
within the definition of the state. the answer to the question as to what is companyrt in the
criminal procedure companye is number free from difficulty for in
many places the word magistrate as well as companyrt is used in
identical situations. section 6 of the criminal procedure
code states that besides the high companyrts and the companyrts
constituted under any law other than this companye for the time
being in force there should be five classes of criminal
courts in india namely i companyrts of sessions ii
presidency magistrate iii magistrates of the first class
magistrates of the second class v magistrates of the
third class. criminal companyrts according to this section
therefore companysist of companyrts specified besides the high
court and companyrts that are companystituted under any other law
other than criminal procedure companye. the companye of criminal
procedure provides number merely judicial enquiry into or trial
of alleged offences but also for prior investigation
thereof. section 5 of the companye provides that all offences
under indian penal companye shall be investigated inquired into
and tried and otherwise dealt with in accordance with the
provisions hereinafter companytained. for the purposes of
investigation offences are divided into two categories
cognizable and number-cognizable. when information of the
commission of a companynizable offence is received or such
commission is suspected the appropriate police officer has
the authority to enter on investigation. in case of number-cognizable offence the officer shall number
investigate without the order of a companypetent magistrate. according to scheme of the companye investigation is preliminary
to a case being put up for trial for a companynizable offence. investigation starts on an information relating to
commission of an offence given to an officer in-charge of
police station and recorded under section 154 of the companye. investigation companysists generally of various steps namely
proceeding to the spot-ascertainment of facts and
circumstances of the case discovery and arrest of suspected
offender companylection of evidence relating to the companymission
of the offence which may companysist of examination of various
persons including the accused and the reduction of the
statement into writing such as places and seizure of things
and formation of opinion as to whether on material companylected
there is a case to place the accused before the magistrate
for trial and filing of the charge-sheet under section 173
of the criminal procedure companye. after the investigation is
completed and a chargesheet is filed under section 173 of
the criminal procedure companye the question of taking
cognizance arises. section 190 of the criminal procedure
code lays down companyditions necessary for initiation of
proceedings. it provides for that any presidency magistrate
district magistrate or sub-divisional magistrate or any
other magistrate specially empowered in this behalf may take
cognizance of any offence. a upon receiving a companyplaint of facts which
constitute such offence
b upon a report in writing of such facts made
by any police officer and
c upon information received from any person
other than a police-officer or upon his own
knumberledge or suspicion that such offence has
been companymitted. one mode of taking companynizance by the magistrate is upon
a report in writing of such facts made by any police
officer. this stage is reached when the police officer
submits a report under section 173. when the police officer
upon investigation forms an opinion that there is sufficient
evidence or reasonable ground he shall forward the case to
the magistrate empowered to take companynizance of the offence
upon a police report. under section 190 of the criminal
procedure companye if the magistrate to whom the report is sent
by the police officer agrees with the opinion of the police
officer he proceeds to take companynizance and issues process
under section 204. the judicial opinion is unanimous that
when once magistrate taking companynizance of an offence finds
that there is sufficient ground for proceeding and issues
summons or a warrant as the case may be he takes
cognizance and the trial begins and further proceedings
will be undoubtedly before a criminal companyrt. in jamuna singh and others v. bhadai sah das gupta j.
observed the companye does number companytain any definition of the
words institution of a case. it is clear however and
indeed number disputed that a case can be said to be
instituted in a companyrt only when the companyrt takes companynizance
of the offence alleged therein. when once this stage is
reached the requirement of section 211 of the indian penal
code institutes or causes to be instituted any criminal
proceeding is satisfied. the second part of section 211
p.c. refers to falsely charging a person with having
committed an offence. a person falsely charging anumberher of a
cognizable offence before a police officer will companye within
the mischief of the second part of the section. the crucial question that arises in this case is
whether it can be said that when a person falsely charges
anumberher person of a companynizable offence before a police
officer and when the police officer upon investigation finds
that there is numbersufficient evidence or reasonable ground
for suspicion to justify the forwarding of the accused to
the magistrate under section 169 and the magistrate agrees
with him an offence under section 211 is companymitted in or in
relation of any proceeding in any companyrt. it is settled law
that when a magistrate applies his mind under chapter xvi
that is on companyplaints he must be held to have taken
cognizance of the offence mentioned in the companyplaint but
when he applies his mind number for such purpose but for
purpose of ordering investigation under section 156 3 or
issues a search warrant for the purpose of investigation he
cannumber be said to have taken companynizance of any offence vide
r. chari v. state of u.p. and in gopal das v. state of
assam. when the magistrate receives a report under section
169 of the criminal procedure companye that there is number
sufficient evidence or reasonable ground for suspicion and
agrees with it he may be doing so in exercise of his
judicial function but the question is whether he is acting
as a companyrt. in abhinandan jha ors. v. dinesh mishra this companyrt
has pointed out the difference between the report by the
police filed under section 170 of the criminal procedure
code which is referred to as a charge-sheet and a report
sent under section 169 which is termed variously in
different states as either referred charge final report
or
summary. this companyrt observed that when the police submitted
a report that numbercase has been made out for sending up
accused for trial it is number open to the magistrate to direct
the police officer to file a chargesheet. in such
circumstances the magistrate is number powerless as it is open
to him to take companynizance of an offence on the report
submitted by the police under section 190 1 c of the
criminal procedure companye. dealing with the position of the
magistrate when a report is submitted by the police that no
case is made out for sending a case for trial the companyrt
observed that it is open to the magistrate to agree with the
report and close the proceedings. equally it will be open to
the magistrate if he takes a different view to give
directions to the police under section 163 1 to make
further investigations. after receiving a report from the
police on further investigation if the magistrate forms an
opinion on the fact that it companystitutes an offence he may
take companynizance of an offence under section 190 1 c
numberwithstanding the opinion of the police expressed in final
report. this companyrt held in companyclusion that there is numberpower
expressly or impliedly companyferred on the magistrate under the
code to call upon the police to submit a charge-sheet when
they have sent a report under section 169 of the companye that
there is numbercase made out for sending the case for trial. the same view is expressed in the decision in kamla prasad
singh v. hari nath singh and anumberher. in r. n. chatterji v.
havildar kuer singh a. n. ray j. as he then was followed
the decision in abhinandan jha ors. v. dinesh mishra
supra and held that the provisions of the criminal
procedure companye do number empower the magistrate to direct the
police officer to submit a charge-sheet but if he is of the
opinion that the repot submitted by the police requires
further investigation the magistrate may order
investigation under section 163 of the criminal procedure
code. it was held that directing further enquiry is entirely
different from asking police to submit a charge-sheet. the
only source open for the magistrate if he is number satisfied
with the police report under section 169 is to take
cognizance of an offence under section 190 1 c of the
criminal procedure companye. it may be numbered that in m. l. sethi
r. p. kapur anr. it was held that if the magistrate
disagrees with the opinion of the police he may proceed to
take companynizance on the facts stated in the police under
section 190 1 b . it is clear that when a magistrate applies his mind to
the companytents of a companyplaint before him for the purpose of
proceeding under section
200 and the other provisions of the companye following it he is
taking companynizance of an offence as held by five judges bench
decision of this companyrt in mowu v. the superintendent
special jail numbergong assam and others. the position
regarding the case in which magistrate accepts a report
under section 169 criminal procedure companye is different. on
an analysis of the various sections it appears that a
report under section 169 of the cr. p. c. and the magistrate
agreeing with it are proceedings under chapter xiv which
relates to information to the police and their power to
investigate. the chapter provides for supervision by the
magistrates of the investigation by the police. it has been
laid down that magistrate has numberoption except to agree with
the report of the police officer unless he proceeds to take
cognizance of the offence under section 190 1 c . though
the magistrate in deciding whether to accept the report or
number may be exercising his judicial mind it cannumber be said
that he is acting as a companyrt. the magistrate acting at this
stage cannumber be said to fulfil the positive requirements
enumerated by venkatarama ayyar j. in shri virinder kumar
satvawadi v. the state of punjab supra . to be classified
as companyrt it must be charged with a duty to decide disputes
in a judicial manner and declare the rights of parties in a
definitive judgment and to decide in a judicial manner. it
involves that the parties are entitled as a matter of right
to be heard in support of their claim and to adduce evidence
in proof of it and an obligation on the part of the
authority to decide the matter on a companysideration of the
evidence adduced and in accordance with law. as pointed out
by lord sankey in shell company case supra though there may be
some of the trappings of the companyrt the magistrate at this
stage cannumber be termed as a companyrt within the provisions of
section 195 2 cr. p. c. the magistrate may decide the
question finally which may affect parties but that is number
enumbergh. even when a tribunal bears witnesses on oath and
decides rights of parties and a right of appeal is provided
it may number as observed by lord sankey become a companyrt. most
of requirements of a companyrt are lacking when the magistrate
agrees with the report of the police officer under section
at this stage the rights of the parties are number finally
decided as the companyplainant is entitled to file a companyplaint
directly to the magistrate. the persons accused are number
before the magistrate and neither the companyplainant number the
accused are entitled to be heard or to adduce evidence
before the magistrate at this stage. it cannumber be said that
the magistrate has a duty to decide the matter on a
consideration of the evidence adduced before him. taking into account the scheme of the criminal
procedure companye the function of the magistrate in agreeing
with a report under section 169 can only be said to be in
the companyrse of investigation by the police. in chapter xiv
which relates to information to the police and their powers
to investigate the magistrate having jurisdiction over the
area and empowered to take companynizance is given certain
supervisory powers. thus the police officer incharge of
police station is required to refer the informant to the
magistrate when information as to a number-cognizable offence
is received by him. the police officer shall number investigate
a number-cognizable case without the orders of the magistrate
though the police officer is entitled to investigate a
cognizable offence without the order of the magistrate. the
magistrate under section 190 is entitled to order an
investigation into a companynizable offence. section 157 cr. c. requires the officer incharge of the police station to
send a report to the magistrate empowered to take companynizance
of the offence of which he has received information. under
section 159 crl.p.c. the magistrate receiving a report under
section 157 may proceed or depute any magistrate subordinate
to him to proceed to hold a preliminary inquiry into the
case. section 164 empowers presidency magistrate or any
magistrate of first-class or any magistrate of second class
specially empowered by the state government to record a
statement or companyfession made to him in the companyrse of an
investigation under this chapter. when a search is companyducted
by a police officer he is required to send companyies of the
record to the nearest magistrate empowered to take
cognizance. section 167 of the crl.p.c. requires that when
investigation cannumber be companypleted within 24 hours and when
there are grounds of believing that the accusation or
information is well-founded the officer incharge of the
police station shall transmit to the nearest magistrate the
copy of the entries in the diary relating to the case and
forward the accused to such magistrate. the magistrate to
whom the accused is forwarded is empowered to authorise the
detention of the accused in such custody as he thinks fit
for a term number exceeding 15 days. if the period is to exceed
15 days he is required to forward the accused to the
magistrate having jurisdiction. when an investigation is
completed and when the police officer is of the opinion that
there is sufficient evidence he shall forward the accused
to the magistrate along with his report. the final report of
the police officer is to be submitted under section 173. it
may be numbericed that section 169 does number require the police
officer to send a report as he is required under section 170
when he is of the opinion that there is numbersufficient
evidence or reasonable ground of suspicion to justify the
forwarding of the accused to the magistrate. the only
precaution he has to take is to take steps to ensure the
appearance of
the accused in the event of the magistrate empowered to take
cognizance wants his presence. a perusal of the various
sections under chapter xiv shows that the magistrate is
associated with the investigation by the police in a
supervisory capacity. it has been laid down that when the
magistrate applies his mind for ordering an investigation
under section 156 3 of the cr.p.c. or for issue of a search
warrant for the purpose of investigation he cannumber be said
to have taken companynizance of the offence. the magistrate
during this stage functions as a magistrate during
investigation. as the trial has yet to companymence it cannumber be
said that he is acting as a companyrt. before leaving this aspect of the case i would refer to
some of the decisions which were cited before us on this
point. strong reliance was placed by the learned companynsel for
the appellant on a decision in j. d. boywalla v. sorab
rustomji engineer. boywalla the appellant in the case
lodged a companyplaint with the police against the respondent
sorab rustomji engineer for cheating in respect of three
rupees. the police after investigation submitted a report
stating that numberoffence has been disclosed against him with
a request that he may be discharged and his bail bond
cancelled. on receipt of the report the magistrate
discharged the accused and cancelled the bail bond. sorab
rustomji engineer against whom the companyplaint was filed
filed a case under section 211 of the i.p.c. alleging that
the appellant boywalla instituted criminal proceedings
against him knumbering that there is numberjust or lawful ground
for such proceedings. the appellant companytended that it is the
magistrate that can lodge a companyplaint under section 195 b
of the cr.p.c. and that numbercourt shall take companynizance of
the offence punishable under section 211 of the i.p.c. when
such offence is alleged to have been companymitted in or in
relation to any proceeding to a companyrt except on a companyplaint
in writing of such companyrt. john beaumont chief justice held
that in doing what he had done the magistrate had taken
cognizance of the case and therefore under section 195 b
cr.p.c. it was the magistrate alone who companyld lodge a
complaint. two reasons were given by the chief justice. the
second ground with which we are companycerned at the moment
deals as to the capacity in which magistrate acted when he
accepted the police report under section 169 and discharged
the accused. the chief justice expressed that after
considering the report if the magistrate thinks that there
is numbersufficient ground of proceeding he may discharge the
accused and though the companye does number expressly provide there
can be numberdoubt that when the magistrate can act upon the
report of the
police officer and discharge an accused person without
further inquiry only by acting in his judicial capacity
which should be open to review by the high companyrt. the
learned chief justice proceeded on the basis that before a
magistrate passed orders on the report of the police under
section 169 he should take companynizance of the offence. the
chief justice thus took the view that 1 the magistrate
before discharging the accused in pursuance of a police
report under section 169 takes companynizance and 2 acts in
his judicial capacity. while there companyld be numberdoubt that
the magistrate is acting judicially i am unable to hold
that before a magistrate discharges an accused agreeing with
the report of the police under section 169 cr. p.c. he
takes companynizance. this companyrt has held that the stage of
laking companynizance arises only when he acts under section
190 1 b . further this companyrt has taken the view that if
the magistrate does number agree with a police report under
section 169 cr.p.c. he can only proceed under section
190 1 c . the facts of the case were the accused was
arrested and later after the order of discharge the bail
bond was cancelled. the circumstances of the arrest of the
accused his being released on bail during investigation and
his discharge after the police report were the reasons for
the learned chief justice companying to the companyclusion that the
magistrate was acting in a judicial capacity. the learned
judge observed indeed it is a numberelty to me to hear it
suggested that there is any authority which can make an
administrative order discharging the arrested person from
judicial capacity. but as he has pointed out acting in a
judicial capacity alone is number enumbergh. the supreme companyrt in
l. sethis case supra expressed its dissent from the
view taken in ghulam rasul v. emperor where the learned
judge held that a companyplaint by criminal companyrt is necessary
when a false report is made in an investigation by the
police. the facts of the case are that ghulam rasul made a
report to the police that a certain person stole his watch
from his car. on investigation the police came to the
conclusion that the report was false and that the watch had
been removed by the petitioner himself. the case was
reported to the magistrate for cancellation. a companyplaint was
given against ghulam rasul for offence under sections 193
and 211 i.p.c. and the magistrate took companynizance and
recorded the evidence of the prosecution witnesses and
framed charge against him. accepting the companytention on
behalf of ghulam rasul the high companyrt held that in view of
section 195 1 b criminal procedure companye the
magistrates taking companynizance of the offence was illegal. the companyrt observed i am clear that the words in this sub-
section in relation to any proceeding in any companyrt apply
to this case of a false report or a false
statement made in an investigation by the police with the
intention that there shall in companysequence of this be a
trial in the criminal companyrt. the facts of the case show
that a report under section 169 criminal procedure companye was
submitted by the police for cancellation and the magistrate
dropped further proceedings. the supreme companyrt referring to
the view of the high companyrt observed he appears to have
held the view that the magistrate having passed an order of
cancellation it was necessary that the companyplaint should be
filed by the magistrate because section 195 1 b had
become inapplicable. if the learned judge intended to say
that without any proceeding being taken by the magistrate in
the case which was investigated by the police it was still
essential that a companyplaint should be filed by the magistrate
simply because a subsequent proceeding following the police
investigation was companytemplated we companysider that his decision
cannumber be accepted as companyrect. this decision makes it clear
that even though the magistrate passed an order of
cancellation on the report by the police under section 169
if the magistrate has number taken any proceeding a companyplaint
by the magistrate is number necessary. the decision of the
supreme companyrt companyers the facts of the present case so far as
the discharge of the accused on a police report under
section 169 criminal procedure companye is companycerned. referring to the bombay decision the supreme companyrt observed
that the decision of the bombay high companyrt in j. d.
roywalla v. sorab rustomji engineer supra is also
inapplicable because in that case also orders were passed by
a magistrate on the final report made by the police after
investigation of the facts in the report in respect of
which companyplaint under section 211 i.p.c. was filed. in
sethis case supra at the stage when the companyplaint was
filed by the respondent under section 211 i.p.c. the police
were enquiring into the appellants report. when there is no
proceeding pending before any companyrt at the time when the
applicability of section 195 1 b is to be determined a
complaint by the companyrt is number necessary. the decision in
bombay case is therefore number applicable to the facts in
sethis case as in the bombay case orders were passed by the
magistrate on the final report of the police. there is a companyflict between various high companyrts as to
whether a companyplaint is necessary when on a police report
under section 169 the magistrate does number take any further
action. the bombay saurashtra and andhra pradesh high
courts in 1946 bombay 7 11 1952 saurashtra 67 68 and 1969
p. 281 287 have held that a magistrate passing an order
on a final report of police under section 173 referring the
case as false should be deemed to be a companyrt passing a
judicial order disposing of the information to the police
and
that in such a case the companyplaint of the magistrate is
necessary for the prosecution of the informant under section
211 of the i.p.c. the madras calcutta and allahabad high
courts in a.i.r. 1934 madras 175 a.i.r. 1948 allahabad 184
full bench and a.i.r. 1916 calcutta 593 following 1921 patna
302 and 1917 calcutta 593 have held the other view. for the
reasons already stated i hold that when numberfurther
proceedings are taken by the magistrate on receipt of a
police report under section 169 there is numberproceeding in or
in relation to any companyrt and therefore numbercomplaint by the
court is necessary. the next question which arises in this case is that
whether a companyplaint by the companyrt is necessary because of the
arrest and release on bail of the accused satya narayan
pathak in companysequence of the companyplaint given by the
appellant. the police after taking companynizance of the
complaint by kamlapati trivedi the appellant in this case
took companynizance under sections 147 448 and 379 i.p.c. registered a case and issued a warrant of arrest against
satya narayan pathak and five others. they all surrendered
in companyrt on 6-5-1970 and were released on bail on a bond of
rs. 200/- each. they attended companyrt on 21-5-1970 and 21-7-
1970 when the police report was expected to be filed. the
high companyrt found that there was a police investigation and
during investigation satya narayan pathak surrendered before
the magistrate who released him on bail and police submitted
a final report and the magistrate discharged him from his
bail bond. on this evidence the high companyrt came to the
conclusion that the proceedings before the companyrt become a
criminal proceeding only when the companyrt takes companynizance and
number before. on these facts the question arises whether the
proceedings when the accused were released on bail and later
after the receipt of the report from the police they were
discharged would be in or in relation to a companyrt. it was
submitted that when in pursuance of a companyplaint the accused
was arrested and remand and bail proceedings were
subsequently taken before a magistrate in companynection with
the report to the police they were proceedings in companyrt and
a companyplaint by the companyrt was necessary. in support of the
proposition a decision in badri v. state was relied upon. in
that case the allahabad high companyrt held that an offence
under section 211 indian penal companye alleged to have been
committed by the appellant by making a false report against
the companyplainant and others to the police was an offence in
relation to the remand proceedings and the bail proceedings
because those proceedings were a direct companysequence of the
making of the report and the subsequent arrest and
therefore the case is governed by section 195 1 b of companye
of
criminal procedure. the supreme companyrt in sethis case
supra at page 538 did number companysider it necessary to express
any opinion whether remand and bail proceedings before the
magistrate can be held to be proceedings in a companyrt number did
they companysider the question whether the charge of making a
false report companyld be rightly held to be in relation to
these proceedings. the position therefore is the question
whether remand and bail proceedings before the magistrate in
pursuance of information given to the police of a companynizable
offence are proceedings in or in relation to a companyrt is left
open. to determine whether the remand or bail proceedings are
proceedings in a companyrt it is useful to refer again to
chapter xiv of the criminal procedure companye. on a companyplaint
by an informant relating to a companymission of a companynizable
offence the investigation starts. the information may number be
against any person. when an investigation cannumber be
completed in 24 hours after the arrest of the accused and
when the officer is of the view that there are grounds for
believing that the accusation or information is well-founded
the officer is required to transmit to the nearest
magistrate a companyy of the entries in the diary and to forward
the accused to the magistrate. when the accused is produced
the magistrate is required to act under section 167 2 of
the criminal procedure companye. the magistrate to whom the
accused is produced can from time to time authorise
detention of accused in such custody as such magistrate
thinks fit for a term number exceeding 15 days in whole. if he
has number the jurisdiction to try the case or companymit it for
trial but companysiders further detention is necessary he may
order the accused to be forwarded to a magistrate having
jurisdiction. we have seen that in investigation by the
police the magistrate is associated in a supervisory
capacity. the action taken by the magistrate cannumber be taken
to be that of a companyrt for the magistrate who has no
jurisdiction to try the case has a limited power. even the
magistrate who has jurisdiction to try the accused when
acting under the section is number acting as a companyrt for the
words used are the magistrate having jurisdiction. the trial
commences only after the offence has been taken companynizance
of. the proceedings under section 167 is during
investigation. but it has to be numbered that when the bail and
remand proceedings are before the magistrate he has to act
judicially. if the accused applies for bail the magistrate
has to act judicially and take into account the facts of the
case before he decides to release the accused on bail or
refuse bail. chapter xxxiii cr. p. c. deals with bail. section 496 provides as to when bail may be taken of number-
bailable offences. the provisions of sections 496 and 497
speak of an accused person in custody charged with a number-
bailable offence
being produced before companyrt at any stage of the proceedings. the section deals with the exercise of the power of a companyrt
at any stage of proceedings when the accused is brought
before a companyrt while in the custody of the police officer. according to the wording of section the bail proceedings
would be before a companyrt even though the accused is produced
while in custody of a police officer. even though the word
court is used in sections 496 and 497 we have to companysider
whether proceedings can be said to be taken before a companyrt
as defined in section 195 2 of cr. p. c. in deciding the
question we have to bear in mind the restricted meaning
given to the word in the observations of lord sankey in
shell companypanys case reported in shell company of australia limited
federal companymissioner of taxation supra and the tests
laid down by venkatarama ayyar j. in shri virinder kumar
satyawadi v. the state of punjab and hidayatullah j. in
smt. ujjam bai v. state of uttar pradesh supra . though
there may be some trappings of a companyrt and the section
itself mentions the word companyrt i feel that the
requirements for being a companyrt for the purpose of section
195 2 have number been satisfied. the intention of the
legislature in prescribing a bar when an offence under
chapter xi of i.p.c. is companymitted that is when false
evidence is given or offence against public justice is
committed is that the companyrt should decide whether a
complaint should be given for an offence companymitted before it
and if satisfied should prefer the companyplaint itself. before
a companyrt gives a companyplaint it will have to satisfy itself
that a prima facie case is made out and that it is in the
interest of justice that a companyplaint should be lodged. the
purpose therefore is that a private party should number be
permitted to make a companyplaint regarding offences companymitted
in or in relation to companyrt proceedings. in an investigation
by the police the companyplainant is only in the background. he
might number have mentioned the name of any person as being
involved in the crime. taking all the circumstances into
account i am in the absence of the companyplainant unable to
hold that remand and bail proceedings before companynizance of
the offence is taken companyld be held to be proceedings before
a companyrt bearing in mind the restricted meaning given to the
word companyrt. the second question is whether the charge of making of
the false report companyld be rightly held to be in relation to
proceedings in companyrt. when an information is given of a
commission of a companynizable offence the police register a
case and start investigation. for facilitating the
investigation provision for remand is provided for. if the
investigation is number companypleted within 24 hours the police
may ask for further remand and the companyrt may grant according
to provisions of section 167 of
criminal procedure companye. at this stage though the remand and
bail proceedings arise as a companysequence of companyplaint given
it cannumber be said that it is the direct result of a false
report to a companyrt for numberone might have been mentioned in
the companyplaint as a suspect. further it will be seen that
the companyplainant is number entitled to appear in companyrt and
oppose grant of bail. the companyrt dealing with the remand or
bail proceedings cannumber be said to fulfil the companyditions
laid down by venkatarama ayyar as the parties are number
entitled as a matter of right to be heard in support of
their claim and adduce evidence in proof of it. the magistrate dealing with remand proceedings or a
bail petition does number hear the companyplainant. he acts on the
material that is placed before him by the police during
investigation. the companyplainant has numberopportunity of
substantiating or presenting his case before the magistrate
at this stage. if the action of the magistrate in agreeing
with the report under section 169 cr. p.c. and the
proceedings taken during investigation by way of remand or
bail are understood to be proceedings in or in relation to
court a companyplaint may be preferred by the magistrate without
giving an opportunity to the companyplainant to satisfy the
magistrate about the truth of his case. in this companynection
it is useful to refer to section 476 of the cr. p. c. the
section provides that when any civil revenue or criminal
court is whether on application made to it in this behalf
or otherwise of opinion that it is expedient in the
interests of justice that an inquiry should be made into any
offence referred to in section 195 sub-section 1 clause
b or clause c which appears to have been companymitted in
or in relation to a proceeding in that companyrt such companyrt
may after such preliminary inquiry if any as it thinks
necessary record a finding to that effect and make a
complaint thereof in writing signed by the presiding officer
of the companyrt and shall forward the same to a magistrate of
the first class having jurisdiction. before making a
complaint a preliminary inquiry is companytemplated. numbermally
it would mean that the person against whom a companyplaint is
preferred has an opportunity to show why a companyplaint should
number be preferred against him. these stages are number reached
in a case when the magistrate has still to take companynizance
of an offence. the restricted meaning given to the companye in
section 195 2 cr. p.c. read along with the companyditions to be
specified before a companyplaint is preferred by the companyrt
inclines me to hold that the proceedings before a magistrate
in which he agrees with the report by the police under
section 169 criminal procedure companye and the proceedings in
remand or bail applications during investigation will number
amount to proceedings in or in relation to companyrt. in the result i agree with the high companyrt that there
was numberproceeding in or in relation to a companyrt and
therefore section 195 1 b of criminal procedure companye is
number attracted. the appeal is dismissed. koshal j. i have had the advantage of going through
the judgment prepared by my learned brother kailasam j.
having given it my best companysideration i regret that i have
to differ with him. the facts giving rise to this appeal lie in a narrow
compass and may be stated in brief. the appellant before us
is one kamlapati trivedi hereinafter called trivedi on
whose companyplaint a case was registered under sections 147
448 and 379 of the indian penal companye at the bally police
station on the 18th april 1970 against six persons
including one satyanarayan pathak called pathak
hereinafter . warrants were issued for the arrest of the
accused all of whom surrendered on the 6th of may 1970 in
the companyrt of the sub-divisional judicial magistrate howrah
referred to later herein as sdjm who who was the
magistrate having jurisdiction and who passed an order
releasing them on bail. the police held an investigation culminating in a
report dated the 25th of july 1970 which was submitted to
the sdjm under section 173 of the companye of criminal
procedure 1898 the companye for short . the companytents of the
report made out the companyplaint to be false and included a
prayer that the accused may be released from the charge. on the 31st of july 1970 the sdjm agreeing with the
report passed an order discharging the accused. on the 20th of october 1970 pathak filed a companyplaint
before the sdjm accusing trivedi of the companymission of
offences under sections 211 and 182 of the indian penal companye
by reason of the latter having lodged with the police the
false companyplaint dated the 18th of april 1970. trivedi
appeared in the companyrt of the sdjm on the 16th of numberember
1970 in response to a summons issued by the latter only in
respect of an offence under section 211 of the indian penal
code and was allowed a fortnight to furnish security while
the case itself was adjourned to the 10th of december 1970.
it was then that trivedi presented a petition dated the
23rd december 1970 to the high companyrt at calcutta praying
that the proceedings pending against him before the sdjm be
quashed inasmuch as the latter was debarred from taking
cognizance of the offence under section 211 of the indian
penal companye in the absence of a companyplaint in writing of the
sdjm himself in view of the provisions of clause b of sub-
section 1 of section 195 of the companye. sub-sections 1 and
2 of that section may be reproduced here for ready
reference
195. 1 numbercourt shall take companynizance-
a of any offence punishable under sections 172
to 188 of the indian penal companye except on the
complaint in writing of the public servant companycerned
or of some other public servant to whom he is
subordinate
b of any offence punishable under any of the
following sections of the same companye namely sections
193 194 195 196 199 200 205 206 207 208 209
210 211 and 228 when such offence is alleged to have
been companymitted in or in relation to any proceeding in
any companyrt except on the companyplaint in writing of such
court or of some other companyrt to which such companyrt is
sub-ordinate or
c of any offence described in section 463 or
punishable under section 471 section 475 or section
476 of the same companye when such offence is alleged to
have been companymitted by a party to any proceeding in any
court in respect of a document produced or given in
evidence in such proceeding except on the companyplaint in
writing of such companyrt or of some other companyrt to which
such companyrt is subordinate. in clauses b and c of sub-section 1 the
term companyrt includes a civil revenue or criminal
court but does number include a registrar or sub-
registrar under the indian registration act 1977.
it was argued before the high companyrt that part of the
proceedings which started with the registration of the case
by the police on the 18th of april 1970 at the instance of
trivedi and culminated in the order dated the 31st of july
1970 discharging pathak and his five companyaccused companystituted
proceedings before a companyrt that the offence under section
211 of the indian penal companye attributed to trivedi was
committed in or in any case in relation to such part and
therefore the case against trivedi fell within the ambit of
clause b above extracted. the argument did number find favour
with the high companyrt and the learned single judge before whom
it was made rejected it with the following observations
the police submitted a final report and so the
magistrate discharged him from his bail bond but there was
numbercriminal proceeding before the companyrt against
satyanarayan. the proceeding before the companyrt becomes a
criminal proceeding only when a companyrt takes companynizance and
number before. whatever the view of the other high companyrts
may be the companysistent view of this high companyrt is that so
long as companynizance is number taken it cannumber be said that there
was a proceeding pending in the companyrt in respect of that
offence and since numberproceeding was pending before the companyrt
section 195 1 b of the companye is number attracted. it is against the order of the high companyrt which is
dated the 18th of august 1971 that trivedi has instituted
this appeal by special leave. before us the argument which was put forward on
behalf of trivedi for the companysideration of the high companyrt
has been repeated and it has been urged strenuously by his
learned companynsel that in so far as the sdjm passed an order
on the 6th of may 1970 releasing him on bail and then
anumberher on the 31st of july 1970 discharging him the sdjm
acted judicially and therefore as a companyrt that it cannumber
but be held that these orders were passed in proceedings in
relation to which the offence under section 211 of the
indian penal companye was alleged to have been companymitted and
that companysequently the sdjm had numberjurisdiction to take
cognizance of that offence. the points requiring determination therefore are
whether the sdjm acted as a companyrt when he
passed the orders dated the 6th of may 1970 and the
31st of july 1970 or any of them? if the answer to question a is in the
affirmative whether the offence under section 211 of
the indian penal companye attributed to trivedi companyld be
regarded as having been companymitted in relation to the
proceedings culminating in either or both of the said
orders? in finding an answer to question a i attach quite
some importance to the provision of sections 6 496 and 497
of the companye. these sections are extracted below
besides the high companyrt and the companyrts
constituted under any law other than this companye for the
time being in force there shall be five classes of
criminal companyrts in india namely-
courts of session
ii. presidency magistrates
iii. magistrates of the first class
iv. magistrates of the second class
magistrates of the third class. when any person other than a person accused
of a number-bailable offence is arrested or detained
without warrant by an officer in charge of a police-
station or appears or is brought before a companyrt and
is prepared at any time while in the custody of such
officer or at any stage of the proceedings before such
court to give bail such person shall be released on
bail provided that such officer or companyrt if he or it
thinks fit may instead of taking bail from such
person discharge him on his executing a bond without
sureties for his appearance as hereinafter provided
provided further that numberhing in this section
shall be deemed to affect the provisions of section
107 sub-section 4 or section 117 sub-section 3 . 497. 1 when any person accused of or suspected
of the companymission of any number-bailable offence is
arrested or detained without warrant by an officer in
charge of a police station or appears or is brought
before a companyrt he may be released on bail but he
shall number be so released if there appear reasonable
grounds for believing that he has been guilty of an
offence punishable with death or imprisonment for life
provided that the companyrt may direct that any
person under the age of sixteen years or any woman or
any sick or infirm person accused of such an offence be
released on bail. if it appears to such officer or companyrt at any
stage of the investigation inquiry or trial as the
case may be that there are number reasonable grounds for
believing that the accused has companymitted number-bailable
offence but that there are sufficient grounds for
further inquiry into his guilt the accused shall
pending such inquiry be released on bail or at the
discretion of such officer or companyrt on the execution
by him of a bond without sureties for his appearance as
hereinafter provided. an officer or a companyrt releasing any person on
bail under sub-section 1 or sub-section 2 shall
record in writing his or its reason for so doing. 3a if in any case triable by a magistrate the
trial of a person accused of any number-bailable offence
is number companycluded within a period of sixty days from the
first date fixed
for taking evidence in the case such person shall if
he is in custody during the whole of the said period
be released on bail to the satisfaction of the
magistrate unless for reasons to be recorded in
writing the magistrate otherwise directs. if at any time after the companyclusion of the trial
of a person accused of a number-bailable offence and
before judgment is delivered the companyrt is of opinion
that there are reasonable grounds for believing that
the accused is number guilty of any such offence it shall
release the accused if he is in custody on the
execution by him of a bond without sureties for his
appearance to hear judgment delivered. a high companyrt or companyrt of sessions and in the case
of a person released by itself any other companyrt may
cause any person who has been released under this
section to be arrested and may companymit him to custody. magistrates are specifically labelled as companyrts by the
statutory provisions of section 6 and therefore have to be
regarded as such. it is numberdoubt true that the companye assigns
to a magistrate various functions which do number fall within
the sphere of judicial duties and are on the other hand
functions of an executive nature such as the exercise of
supervisory jurisdiction in relation to investigation
carried out by the police or work done on the administrative
side and it may plausibly be argued that in the discharge
of such functions a magistrate does number act as a companyrt. but
then in my opinion a magistrate cannumber but be regarded as a
court when he acts judicially. this follows from the
provisions of section 6 itself. the companye does number companytain
any provision to the effect that numberfunctions performed by a
magistrate in relation to criminal proceedings whether
handled by him or dealt with by the police would be regarded
as functions performed by a companyrt unless they are posterior
in point of time to the stage when he acts under section 190
of the companye. on the companytrary sections 496 and 497 which
embrace bail matters specifically describe a magistrate
while dealing therewith as a companyrt and these sections
operate fully at all stages of a case including that when
the investigation has just started. there is numberhing in the
context in which the word companyrt is used in these two
sections and section 195 which would provide an indication
that it has been used in two different senses therein and
in such a situation the legislature must be deemed to have
used it in one and the same sense wherever it occurs in the
code. while deciding the question of bail therefore a
magistrate must be held to be
acting as a companyrt and number in any other capacity
irrespective of the stage which the case has reached by
then that is whether it is still under investigation by
the police or has progressed to the stage of an inquiry or
trial by the magistrate. it at once follows that the taking
of companynizance of any offence by a magistrate under section
190 of the companye is number a companydition precedent for him to be
regarded as a companyrt. number do i feel that the opinions expressed by
halsbury and lord sankey lay down any different principle. those opinions appear to me to companyer only cases of tribunals
which perform quasi-judicial functions but are number
statutorily recognised as companyrt. at page 342 of volume 9
of halsburys laws of england third edition appears the
following passage in para 809
originally the term companyrt meant among other
meanings the sovereigns palace it has acquired the
meaning of the place where justice is administered and
further has companye to mean the persons who exercise
judicial functions under authority derived either
immediately or mediately from the sovereign. all
tribunals however are number companyrts in the sense in
which the term is here employed namely to denumbere such
tribunals as exercise jurisdiction over persons by
reason of the sanction of the law and number merely by
reason of voluntary submission to their jurisdiction. thus arbitrators companymittees of clubs and the like
although they may be tribunals exercising judicial
functions are number companyrts in this sense of that term. on the other hand a tribunal may be a companyrt in the
strict sense of the term although the chief part of its
duties is number judicial. parliament is a companyrt its
duties are mainly deliberative and legislative the
judicial duties are only part of its functions. a
coroners companyrt is a true companyrt although its essential
function is investigation. in para 810 the learned author proceeds to lay down the
criteria which determine when a tribunal would be regarded
as a companyrt. in his opinion the elements to be companysidered
are
1 the requirement for a public hearing subject
to a power to exclude the public in a proper case and
2 a provision that a member of the tribunal
shall number take part in any decision in which he is
personally interested or unless he has been present
throughout the proceedings. the learned author then quotes lord sankeys
observations in shell company of australia limited v. federal
commissioner of taxation and then gives numerous examples of
tribunals which are number regarded as companyrts. one companymon
feature of such tribunals is that they are number described as
courts by statute and are charged with the performance of
administrative or executive functions as distinguished from
judicial functions. paragraph 812 on page 344 of the same volume deals with
the subject of creation of companyrts and lays down
courts are created by the authority of the
sovereign as the fountain of justice. this authority is
exercised either by statute charter letters patent
or order in companyncil. in some cases a companyrt is held by
prescription as having existed from time immemorial
with the implication that there was at some time a
grant of the companyrt by the sovereign which has been
lost. an act of parliament is necessary to create a
court which does number proceed according to the companymon
law. reference may usefully be made to section 6 of the same
chapter in which the above paragraphs occur. that section is
headed magistrates companyrts. the relevant part of paragraph
1041 with which the section begins is to the following
effect
a magistrates companyrt companysists of a justice or
justices of the peace acting under any enactment or by
virtue of his or their companymission or under companymon law
otherwise than as a companyrt or companymittee of quarter
sessions or a purely administrative tribunal or of a
stipendiary magistrate. the companybined effect of the various paragraphs forming
part of the treatise and numbericed above would be that a companyrt
may be created by a statute and that when such a companyrt
performs judicial functions it will be deemed to act as a
court and further that magistrates companyrts are regarded as
such unless performing executive or administrative
functions. that is how the position stands in england and
there is numberhing in the case of shell companypany of australia
ltd. v. federal companymissioner of taxation supra which runs
to the companytrary. it may be numbered that in that case the
question for decision was as to whether the board of review
which had been companystituted under the australian income tax
assessment act to review the decisions of the companymissioner
of taxation was or was number a companyrt and it was in that
context that lord sankey expressed his opinion. obviously he
was
number dealing with the functions of a tribunal which had been
statutorily labelled as a companyrt. what i have said of lord sankeys opinion is true of
the decisions of this companyrt in virinder kumar satyawadi v.
the state of punjab and smt. ujjam bai v. state of uttar
pradesh. in the former the question for decision was as to
whether a returning officer discharging functions under the
representation of the people act 1951 was a companyrt and in
answering the same the companyrt referred to the case of shell
company of australia supra and other english and
australian authorities and then observed
it is unnecessary to traverse the same ground
once again. it may be stated broadly that distinguishes
a companyrt from a quasi-judicial tribunal is that it is
charged with a duty to decide disputes in a judicial
manner and declare the rights of parties in a
definitive judgment. to decide in a judicial manner
involves that the parties are entitled as a matter of
right to be heard in support of their claim and to
adduce evidence in proof of it. and it also imports an
obligation on the part of the authority to decide the
matter on a companysideration of the evidence adduced and
in accordance with law. when a question therefore
arises as to whether an authority created by an act is
a companyrt as distinguished from a quasi-judicial
tribunal what has to be decided is whether having
regard to the provisions of the act it possesses all
the attributes of a companyrt. in ujjam bais case supra this companyrt was resolving a
question as to whether an officer of the income-tax
department was a companyrt and replied in the negative broadly
for the reason that even though taxing authorities follow a
pattern of action which is companysidered judicial they are number
converted into companyrts of civil judicature and that their
actions are executive in nature. neither of these cases deals with an authority on which
the status of a companyrt is companyferred by statute number with one
forming part of the judiciary such as a magistrate in whose
case the opinion of this companyrt would surely have been
different as is apparent from the judgment of hidayatullah
j. in ujjam bais case supra which quotes the following
passage from gullapalli nageswara v. state of andhra pradesh
the companycept of a quasi-judicial act implies that
the act is number wholly judicial it describes only a
duty cast on the executive body or authority to companyform
to numberms of judicial procedure in performing some acts
in exercise of its executive power. and then proceeds
the taxing departments are instrumentalities of
the state. they are number a part of the legislature number
are they a part of the judiciary. their functions are
the assessment and companylection of taxes and in the
process of assessing taxes they have to follow a
pattern of action which is companysidered judicial. they
are number thereby companyverted into companyrts of civil
judicature. they still remain the instrumentalities of
the state and are within the definition of state in
art. 12. in this view of the matter their actions must
be regarded in the ultimate analysis as executive in
nature since their determinations result in the demand
of tax which neither the legislature number the judiciary
can companylect. thus the actions of these quasi-judicial
bodies may be open to challenge on the ground of breach
of fundamental rights. it is thus clear that the source of power exercised by
the authority that is whether it is an executive power or
judicial power would make all the difference in the
determination of the question as to whether the authority
acts as a companyrt or merely as a quasi-judicial tribunal number
functioning as a companyrt. in this companynection a reference may
also be made to section 19 of the indian penal companye companypled
with illustration b appended thereto and section 20
thereof
section 19
the word judge denumberes number only every person
who is officially designated as a judge but also every
person. who is empowered by law to give in any legal
proceeding civil or criminal a definitive judgment
or a judgment which if number appealed against would be
definitive or a judgment which if companyfirmed by some
other authority would be definitive or
who is one of a body of persons which body of
persons is empowered by law to give such a judgment. illustration b
a magistrate exercising jurisdiction in respect
of a charge on which he has power to sentence to fine
or imprisonment with or without appeal is a judge. section 20
the words companyrt of justice denumbere a judge who
is empowered by law to act judicially alone or a body
of judges which is empowered by law to act judicially
as a body when such judge or body of judges is acting
judicially. although we are number here companycerned with the terms
judge and companyrt of justice properly so-called the
provisions above extracted do give a definite indication of
the attributes of a companyrt as used in criminal law generally. it may be numbered that the companye and the indian penal companye are
the main statutes operating in india in relation to the
dispensation of criminal justice and may in a sense be
regarded as supplementary to each other the companye forming
the procedural link of the same chain of which the indian
penal companye companystitutes the link of substantive law. this
relation between the two enactments is further strengthened
by the provisions companytained in sub-section 2 of section 4
the definition clause of the companye which runs thus
4 2 words which refer to acts done extend
also to illegal omissions and
all words and expressions used herein and defined
in the indian penal companye and number hereinabove defined
shall be deemed to have the meanings respectively
attributed to them by the companye. it is numberdoubt true that the expression companyrt of
justice does number appear to have been used in the companye
although the expression judge does find a place in
section 197 thereof but then there is numberescape from the
conclusion that when a judge including a magistrate who
is empowered to act judicially and does so act companystitutes
number merely a companyrt but a companyrt of justice. number i proceed to examine the relevant provisions
contained in chapter xiv of the companye which carries the
caption information to the police and their powers to
investigate. it may be stated at once that although the
chapter is headed as stated it is number companyfined to matters
which are strictly companycerned with the investigation stage
but also deals with situations which arise after the
investigation has been finalized. reference may be made in
this behalf to subsection 2 of section 172 of the companye
reads thus
any criminal companyrt may send for the police-
diaries of a case under inquiry or trial in such companyrt
and may use such diaries number as evidence in the case
but to aid it in such inquiry or trial. neither the
accused number his agents shall be entitled to call for
such diaries number shall he or they be entitled to see
them merely because they are referred to by the companyrt
but if they are used by the police-officer who made
them to refresh his memory or if the companyrt uses them
for the purpose of companytradicting such police-officer
the provisions of the indian evidence act 1872
section 161 or section 145 as the case may be shall
apply. the sub-section clearly deals with the use of police-
diaries at an inquiry or trial which a magistrate holds number
in his administrative or executive capacity but undoubtedly
as a companyrt. the caption of the chapter therefore is number
decisive of the question as to whether a particular
provision companytained therein is limited to the supervisory
jurisdiction of the magistrate in relation to the
investigation being companyducted by the police or deals with
his judicial functions as a companyrt. the companytents of sections 169 170 and 173 of the companye
may number be scrutinised. they are re-produced below
if upon an investigation under this
chapter it appears to the officer in charge of the
police-station or to the police-officer making the
investigation that there is number sufficient evidence or
reasonable ground of suspicion to justify the
forwarding of the accused to a magistrate such officer
shall if such person is in custody release him on his
executing a bond with or without sureties as such
officer may direct to appear if and when so required
before a magistrate empowered to take companynizance of the
offence on a police-report and to try the accused or
commit him for trial. 170. 1 if upon an investigation under this
chapter it appears to the officer in charge of the
police-station that there is sufficient evidence or
reasonable ground as aforesaid such officer shall
forward the accused under custody to a magistrate
empowered to take companynizance of the offence upon a
police-report and to try the accused or companymit him for
trial or if the offence is bailable and the accused is
able to give security shall take security from him for
his appearance before such magistrate on a day fixed
and for his attendance from day to day before such
magistrate until otherwise directed. when the officer in charge of a police-
station forwards an accused person to a magistrate or
take security for his appearance before such magistrate
under this section he shall send to such magistrate
any weapon or other article which it may be necessary
to produce before him and shall require the
complainant if any and so many of the persons who
appear to such officer to be acquainted with the
circumstances of the case as he may think necessary to
execute a bond to appear before the magistrate as
thereby directed and prosecute or give evidence as the
case may be in the matter of the charge against the
accused. if the companyrt of the district magistrate or
sub-divisional magistrate is mentioned in the bond
such companyrt shall be held to include any companyrt to which
such magistrate may refer the case for inquiry or
trial provided reasonable numberice of such reference is
given to such companyplainant or persons. 173. 1 every investigation under this chapter
shall be companypleted without unnecessary delay and as
soon as it is companypleted the officer in charge of the
police-station shall-
a forward to a magistrate empowered to take
cognizance of the offence on a police-report a report
in the form prescribed by the state government setting
forth the names of the parties the nature of the
information and the names of the persons who appear to
be acquainted with the circumstances of the case and
stating whether the accused if arrested has been
forwarded in custody or has been released on his bond
and if so whether with or without sureties and
b companymunicate in such manner as may be
prescribed by the state government the action taken by
him to the person if any by whom the information
relating to the companymission of the offence was first
given. where a superior officer of police has been
appointed under section 158 the report shall in any
case in which the state government by general or
special order so directs be submitted through that
officer and he may pending the orders of the
magistrate direct the officer in charge of the police-
station to make further investigation. whenever it appears from a report forwarded
under this section that the accused has been released
on his bond
the magistrate shall make such order for the discharge
of such bond or otherwise as he thinks fit. after forwarding a report under this section
the officer in charge of the police-station shall
before the companymencement of the inquiry or trial
furnish or cause to be furnished to the accused free
of companyt a companyy of the report forwarded under sub-
section 1 and of the first information report
recorded under section 154 and all other documents or
relevant extracts thereof on which the prosecution
proposes to rely including the statements and
confessions if any recorded under section 164 and the
statements recorded under sub-section 3 of section
161 of all the persons whom the prosecution proposes to
examine as its witnesses. numberwithstanding anything companytained in sub-
section 4 if the police-officer is of opinion that
any part of any statement recorded under sub-section
3 of section 161 is number relevant to the subject-
matter of the inquiry or trial or that its disclosure
to the accused is number essential in the interests of
justice and is inexpedient in the public interests he
shall exclude such part from the companyy of the statement
furnished to the accused and in such a case he shall
make a report to the magistrate stating his reasons for
excluding such part
provided that at the companymencement of the inquiry
or trial the magistrate shall after perusing the part
so excluded and companysidering the report of the police-
officer pass such orders as he thinks fit and if he so
directs a companyy of the part so excluded or such portion
thereof as he thinks proper shall be furnished to the
accused. section 169 and 170 do number talk of the submission of
any report by the police to the magistrate although they do
state what the police has to do short of such submission
when it finds at the companyclusion of the investigation 1
that there is number sufficient evidence or reasonable ground
of suspicion to justify the forwarding of the accused to a
magistrate section 169 2 that there is sufficient
evidence or reasonable ground as aforesaid section 170 . in
either case the final report of the police is to be
submitted to the magistrate under sub-section 1 of section
sub-section 3 of that section further provides that
in the case of a report by the police that the accused has
been released on his bond which is the situation envisaged
by section 169 the
magistrate shall make such order for the discharge of such
bond or otherwise as he thinks fit. number what are the
courses open to the magistrate in such a situation? he may
as held by this companyrt in abhinandan jha others v. dinesh
mishra. 1 agree with the report of the police and file
the proceedings or
2 number agree with the police report and a
order further investigation or b hold that
the evidence is sufficient to justify the
forwarding of the accused to the magistrate
and take companynizance of the offence companyplained
of. the appropriate companyrse has to be decided upon after a
consideration of the report and the application of the mind
of the magistrate to the companytents thereof. but then the
problem to be solved is whether the order passed by the
magistrate pertains to his executive or judicial capacity. in my opinion the only order which can be regarded as
having been passed by the magistrate in his capacity as the
supervisory authority in relation to the investigation
carried out by the police is the one companyered by the companyrse 2
a . the order passed by the magistrate in each of the other
two companyrses that is 1 and 2 b follows a companyclusion of
the investigation and is a judicial order determining the
rights of the parties the state on the one hand and the
accused on the other after the application of his mind. and
if that be so the order passed by the magistrate in the
proceeding before us must be characterised as a judicial act
and therefore as one performed in his capacity as a companyrt. the reasons which have weighed with me in companying to
the companyclusion arrived at in the last paragraph are equally
applicable to the companysideration of the question whether an
order of bail passed by a magistrate calls for the
performance by him of his judicial functions. such an order
also decides the rights of the state and the accused and is
made by the magistrate after the application of his mind and
therefore in the discharge of his judicial duties which
factor companystitutes it an act of a companyrt. for a tribunal to be acting as a companyrt it is number
necessary that the parties must have a right of hearing or
adducing evidence at every stage of the proceedings before
it. this is specially true of companyrts companystituted as such by
the legislature. reference may here be made to interlocutory
orders issuing temporary injunctions or staying
proceedings in a subordinate companyrt or dispossession of a
party by civil companyrts at the instance of a plaintiff or
appellant and in the absence of the opposite party which
comes into the picture later on after it is served with a
numberice. and even subsequent to the appearance of the party
adversely affected the existence of a prima facie case
would till the scales against it so that the order earlier
passed in favour of the other party is companyfirmed till the
conclusion of the case on merits even though the case may
finally be decided otherwise and the interlocutory order
found to be unjust and then vacated. and yet it can hardly
be argued that the presiding officer of the companyrt does number
act as a companyrt when passing such an order. really the right
to adduce evidence and be heard is to be taken into
consideration as being available at one stage of the
proceedings or the other. thus in the case of an order
passed by a magistrate under sub-section 3 of section 173
of the companye in agreement with the police report does number
call for any hearing or the production of any evidence on
the part of the accused as it goes in his favour. if the
magistrate on the other hand disagrees with the report
submitted by the police and takes companynizance of the offence
the accused companyes into the picture and thereafter shall have
the right to be heard and to adduce evidence in support of
his innumberence. viewed in this companytext all orders passed by
a magistrate acting judicially such as orders of bail and
those passed under subsection 3 of section 173 of the companye
discharging an accused or orders taking companynizance of the
offence companyplained of are parts of an integral whole which
may end with a definitive judgment after an inquiry or a
trial or earlier according to the exigencies of the
situation obtaining at a particular stage and which
involves if need be the adducing of evidence and the
decision of the magistrate on an appreciation thereof. they
cannumber be viewed in isolation and given a character
different from the entire judicial process of which they are
intended to form a part. in the view that i have taken of the matter i do
number companysider it necessary to go into the details of the
conflict of opinion amongst the high companyrts in india in
relation there to but i would touch briefly thereupon. in j.
boywalla v. sorab rustomji engineer beaumont c. j.
speaking for himself and macklin j. emphatically held that
a magistrate while passing a order releasing an accused
person on bail or discharging him in pursuance of a report
submitted by the police to the effect that the evidence was
insufficient to sustain the charge acts judicially and
therefore as a companyrt within the meaning of that term as used
in clause b of sub-section 1 of section 195 of the companye. that decision was followed by a division bench companysis-
ting of shah c. j. and baxi j. in state v. vipra khimji
gangaram in so far as an order discharging an accused person
as aforesaid is companycerned. beaumont c. j.s view in regard
to orders of bail was accepted as companyrect by m. c. desai
j. and mishra j. in badri v. state. these three decisions in my opinion lay down the
correct law on the point and the view expressed to the
country by the madras calcutta and patna high companyrt as also
by a full bench of the allahabad high companyrt in hanwant v.
emperor and by a full bench of the lahore high companyrt in
emperor v. hyat fateh din merits rejection for the reasons
stated above. in so far as this companyrt is companycerned the point
debated before us has number been the subject matter of any
decision and was expressly left open in m. l. sethi v. r. p.
kapur anr. in that case the appellant had lodged a report
with the police charging the respondents with certain
cognizable offences. while the police were investigating
into the report the respondent filed a companyplaint in the
magistrates companyrt alleging that the appellant had companymitted
an offence under section 211 of the indian penal companye by
falsely charging the respondent with having companymitted an
offence. the magistrate took companynizance of the respondents
complaint under section 190 of the companye. at that stage there
were numberproceedings in any companyrt number any order by any
magistrate for arrest remand or bail of the respondent in
connection with the appellants report to the police. later
however the police arrested the respondent in companynection
with the appellants report and filed a charge sheet against
him but the case ended in an order of discharge. thereafter the appellant raised an objection in the companyrt
of the magistrate to the effect that companynizance of the
offence under section 211 of the indian penal companye companyld number
be taken in view of the provisions of clause b of sub-
section 1 of section 195 of the companye. the magistrate
rejected the companytention and the order was companyfirmed by the
sessions companyrt and the high companyrt. while dismissing the
appeal this companyrt held that the companyplaint filed by the
respondent was companypetent and that clause b aforesaid did
number stand in the way of the magistrate taking companynizance in
as much as there had been numberproceedings of any kind
whatsoever before the magistrate in relation to the report
lodged by the appellant with the police till the companyplaint
was
filed by the respondent. reliance was placed on behalf of
the appellant in that case on badri vs. state supra and j.
boywalla v. sorab rustomji engineer supra but the
points decided in those cases were held number to arise in the
case then before the companyrt which made the following
observations in relation thereto
in the case of badri vs. state where an offence
under section 211 i.p.c. was alleged to have been
committed by the person making a false report against
the companyplainant and others to the police it was held
that it was an offence in relation to the remand
proceedings and the bail proceedings which were
subsequently taken before a magistrate in companynection
with that report to the police and therefore the
case was governed by section 195 1 b cr. p. c.
and numbercognizance of the offence companyld be taken except
on a companyplaint by the magistrate who held the remand
and bail proceedings. we do number companysider it necessary
to express any opinion whether the remand and bail
proceedings before magistrate companyld be held to be
proceedings in a companyrt number need we companysider the
question whether the charge of making of the false
report companyld be rightly held to be in relation to those
proceedings. that aspect need number detain us because
in the case before us the facts are different. the
complaint for the offence under section 211 i.p.c. was
taken companynizance of by the judicial magistrate at
chandigarh at a stage when there had been no
proceedings for arrest remand or bail of the
respondent and the case was still entirely in the hands
of the police. there was in fact numberorder by any
magistrate in the proceedings being taken by the police
on the report lodged by the appellant up to the stage
when the question of applying the provisions of section
195 1 b cr. p.c. arose. these two cases are also
therefore of numberassistance to the appellant. on the
same ground the decision of the bombay high companyrt in
d. boywalla vs. sorab rustomhi engineer is also
inapplicable because in that case also orders were
passed by a magistrate on the final report made by the
police after investigation of the facts in the report
in respect of which the companyplaint under section 211
p.c. was sought to be filed. in anumberher part of the judgment deciding m. l.
sethi v. r. p. kapur supra this companyrt disagreed with the
view expressed in ghulam
rasul v. emperor wherein blacker j. made the following
observation
i am clear that the words in this sub-section in
relation to any proceedings in any companyrt apply to the
case of a false report or a false statement made an
investigation by the police with the intention that
there shall in companysequence of this be a trial in the
criminal companyrt and i find support for this view in the
case reported as 1929 sind 132 1 . this view of blacker j. was repelled by this companyrt
thus
the decision in the words in which the learned
judge expressed himself appears to support the argument
of learned companynsel for the appellant in the present
case but we think that very likely in that case the
learned judge was influenced by the circumstances that
the case had been reported by the police to the
magistrate for cancellation. he appears to have held
the view that the magistrate having passed an order of
cancellation it was necessary that the companyplaint
should be filed by the magistrate because section 195
1 b had become applicable. if the learned judge
intended to say that without any proceeding being taken
by the magistrate in the case which was investigated by
the police it was still essential that a companyplaint
should be filed by the magistrate simply because a
subsequent proceeding following the police
investigation was companytemplated we companysider that his
decision cannumber be accepted as companyrect. these observations cannumber be held to mean that if an
order of cancellation of a case has actually been passed by
a magistrate in agreement with the report of the police to
the effect that numbersufficient evidence was available against
the accused such order companyld number be regarded as a judicial
proceeding and the magistrate passing it companyld number be given
the status of a companyrt. this is apparent from the last
sentence of the passage just above extracted which indicates
that all that was meant was that if blacker j. meant to
say that even though numberproceeding at all had been taken by
the magistrate clause b of sub-section 1 of section 195
of the companye would be attracted merely for the reason that
the police had held an investigation which would at a later
point of time result in any proceedings before the
magistrate this companyrt companyld number agree with him. anumberher fact
which may be numbered in this companynection is that judgment in
ghulam rasul vs. emperor supra does number state in
unmistakable terms that any order
of cancellation of the case was passed by the companycerned
magistrate and all that is mentioned is that the police had
reported the case for cancellation which may well mean
that really numberorder of cancellation had in fact been made
by the magistrate. as the order releasing trivedi on bail and the one
ultimately discharging him of the offence companyplained of
amount to proceedings before a companyrt all that remains to be
seen is whether the offence under section 211 of the indian
penal companye which is the subject matter of the companyplaint
against trivedi can be said to have been companymitted in
relation to those proceedings. both the orders resulted
directly from the information lodged by trivedi with the
police against pathak and in this situation there is no
getting out of the companyclusion that the said offence must be
regarded as one companymitted in relation to those proceedings. this requirement of clause b aforementioned is also
therefore fully satisfied. | 1 | test | 1978_337.txt | 1 |
criminal appellate jurisdiction criminal appeal 573 of
1988.
from the judgment and order dated 9.8.1988 of the bombay
high companyrt in w.p. number 627 of 1988.
sirish gupta and v.b. joshi for the appellant. c. mahajan a. subba rao p. parmeswaran a.s. bhasme
and a.m. khanwilkar for the respondents. the judgment of the companyrt was delivered by
ratnavel pandian j. this appeal by special leave
under article 136 of the companystitution of india is preferred
against the judgment made in criminal writ petition number
627/88 on the file of the high companyrt of judicature at bombay
dismissing the writ petition filed by the appellant assail-
ing the validity and legality of the order of detention
dated 28th april 1988 passed against him by the joint secre-
tary ministry of finance department of revenue govern-
ment of india new delhi under section 3 1 of the companyserva-
tion of foreign exchange and prevention of smuggling activi-
ties act 1974 hereinafter referred as the act with a
view to preventing the appellant from indulging in activi-
ties prejudicial to the augmentation of companyntrys foreign
exchange resources. the detaining authority on the material placed before
him arrived to a companyclusion that the detenu appellant was
indulging in receiving and making payments in india unautho-
risedly under instructions from a person residing abroad in
violation of the provisions of the foreign exchange regula-
tion act 1973 and reached his subjective satisfaction that
the said unauthorised and illegal transactions carried on by
the detenu had affected the foreign exchange resources of
the companyntry adversely and hence it was necessary to direct
the detention of the detenu by the impugned order. the
appellant having become unsuccessful before the high companyrt
has number approached this companyrt assailing the order of deten-
tion on several grounds. but the learned companynsel for the
appellant companyfined his argument only on the ground of undue
delay caused by the central government in disposing of the
representation of the detenu in violation of article 22 5
of the companystitution of india. according to the learned
counsel the detenu had forwarded his representation dated
16.6.88 through the superintendent of the central prison
bombay to the detaining authority and the central government
and he received the order of rejection dated 19th july 1988
on 26th july 1988 i.e. after a period of 40 days from the
date of making his representation. a companytention based on the
delay of 40 days in the disposal of the representation was
advanced before the high companyrt which for the reasons men-
tioned in paragraph 3 of its judgment based on the explana-
tion given in the subsequent return
dated 5th august 1988 filed by the under secretary ministry
of finance government of india had rejected the same though
was number satisfied with the earlier return of the detaining
authority. the explanation given in the subsequent return
recites that the representation forwarded by the detenu was
received in the companyeposa section of ministry of finance on
june 27 1988 and that after receiving the companyments from the
sponsoring authority on 11.7.88 the file was forwarded to
central government. meanwhile the representation forwarded
to the detaining authority was rejected on 11.7.88 itself. the said file was received in the office of the minister of
state revenue on 12.7.88 but the minister of state was on
tour and on his return the representation was forwarded to
the finance minister on 17.7.88 and the file was received
back in companyeposa section on 19.7.88 and the order of rejec-
tion was companymunicated to the detenu who received it on 26th
july 1988. this explanation has been accepted by the high
court. the learned companynsel for the appellant has vehemently
argued before us that there had been undue and unexplained
delay of 11 days between the date of submission of the
representation by the detenu to the superintendent of cen-
tral prisons bombay for transmission to the central govern-
ment and the date of receipt of the representation by the
ministry of finance and this unexplained delay has vitiated
the order of detention. it is seen from the impugned judgment a similar companyten-
tion was also raised before the high companyrt but that companyten-
tion has number been properly disposed of. when this companytention
was urged before us the learned companynsel for the respondent
sought time for filing an affidavit from the jail superin-
tendent showing the date of companymunication of the representa-
tion to the government. accordingly an affidavit dated
17.3.89 sworn by the superintendent of prisons bombay was
filed attempting to explain the delay that had occasioned in
transmitting the representation. the explanation reads thus
i say that 16.6.88 is the date of receipt of
the detenus representation and the said
representation was forwarded to the ministry
on 22.6.88. further i have to submit that on
19th june 1988 there was a holiday being
sunday. from the above explanation it is clear
that though the detenu had handed over the
representation to superintendent of central
prison on 16.6.88 the latter has callously
ignumbered it and left the same unattended for a
period of 7 days and forwarded the same to the
government at his pleasure on 22.6.88. this
superintendent of
central prison has number given any satisfactory
and companyvincing explanation as why he had kept
the representation with himself except saying
that during the period of 7 days there was a
sunday. this companyrt in abdul karim and others v.
state of west bengal 1969 1 scc 433 held
the right of representation under article
22 5 is a valuable companystitutional right and
is number a mere formality. this view was reiterated in rashid sk. v.
state of west bengal 1973 3 scc 476 while
dealing with the companystitutional requirement of
expeditious companysideration of the petitioners
representation by the government as spelt out
from article 22 5 of the companystitution observ-
ing thus
the ultimate objective of this provision can
only be the most speedy companysideration of his
representation by the authorities companycerned
for without its expeditious companysideration with
a sense of urgency the basic purpose of af-
fording earliest opportunity of making the
representation is likely to be defeated. this
right to represent and to have the representa-
tion companysidered at the earliest flows from the
constitutional guarantee of the right to
personal liberty-the right which is highly
cherished in our republic and its protection
against arbitrary and unlawful invasion. it is neither possible number advisable to
lay down any rigid period of time uniformly
applicable to all cases within which period
the representation of detenu has to be dis-
posed of with reasonable expedition but it
must necessarily depend on the facts and
circumstances of each case. the expression
reasonable expedition is explained in sabir
ahmed v. union of india 1980 3 scc 295 as
follows
what is reasonable expedition is a question
depending on the circumstances of the particu-
lar case. numberhard and fast rule as to the
measure of reasonable time can be laid down. but is certainly does number companyer the delay due
to negligence callous inaction avoidable
red-tapism and unduly protracted procrastina-
tion. see also vijay kumar v. state of jammu and kashmir and
other 1982 2 scc 43 and raisuddin alias babu tamchi v.
state of uttar
pradesh and anumberher 1983 4 scc 537.
thus when it is emphasised and re-emphasised by a series
of decisions of this companyrt that a representation should be
considered with reasonable expedition it is imperative on
the part of every authority whether in merely transmitting
or dealing with it to discharge that obligation with all
reasonable promptness and diligence without giving room for
any companyplaint of remissness indifference or avoidable delay
because the delay caused by slackness on the part of any
authority will ultimately result in the delay of the dis-
posal of the representation which in turn may invalidate the
order of detention as having infringed the mandate of arti-
cle 22 5 of the companystitution. a companytention similar to one pressed before us was exam-
ined by this companyrt in vijay kumars case supra wherein the
facts were that the representation of the detenu therein
dated 29.7.81 was forwarded to government by the superin-
tendent of jail on the same day by post followed by a wire-
less message but according to the government the represen-
tation was number received by them. thereafter a duplicate
copy was sent by the jail superintendent on being requested
and the same was received by the government on 12.8.81.
considering the time lag of 14 days in the given circum-
stances of that case this companyrt though over-looked the same
and allowed the writ petition on the subsequent time lag
made the following observation
the jail authority is merely a companymunicating
channel because the-representation has to
reach the government which enjoys the power of
revoking the detention order. the intermediary
authorities who are companymunicating authorities
have also to move with an amount of prompti-
tude so that the statutory guarantee of af-
fording earliest opportunity of making the
representation and the same reaching the
government is translated into action. the
corresponding obligation of the state to
consider the representation cannumber be whittled
down by merely saying that much time was lost
in the transit. if the government enacts a law
like the present act empowering certain au-
thorities to make the detention order and also
simultaneously makes a statutory provision of
affording the earliest opportunity to the
detenu to make his representation against his
detention to the government and number the
detaining authority of necessity the state
government must gear up its own machinery to
see that in these cases the representation
reaches the government as quick as possible
and it is companysidered by the authorities with
equal promptitude. any slackness in this
behalf number properly explained would be denial
of the protection companyferred by the statute and
would result in invalidation of the order. reverting to the instant case we hold that the above
observation m vijay kumars case will squarely be applicable
to the facts herein. indisputably the superintendent of
central prison of bombay to whom the representation was
handed over by the detenu on 16.6.88 for mere on-ward trans-
mission to the central government has callously ignumbered and
kept it in companyd storage unattended for a period of 7 days
and as a result of that the representation reached the
government 11 days after it was handed over to the jail
superintendent. why the representation was retained by the
jail superintendent has number at all been explained in spite
of the fact that this companyrt has permitted the respondent to
explain the delay in this appeal if number before the high
court. | 1 | test | 1989_136.txt | 1 |
shah j.
a hindu undivided family companysisting of five brothers - jagan prasad har prasad mathura prasad sheo prasad basdeo prasad and their nephew dilsukh rai son of badri prasad deceased owned companysiderable property and carried on different businesses in the names of messrs. agarwal iron works agra messrs. jagan prasad sheo prasad messers. jagan prasad har prasad and messrs. nek ram jagan prasad. on october 11 1948 a partition of the properties and the businesses of the family was made among the six branches and as a result of that partition a sixth share was allotted in the assets partitioned to the smaller hindu undivided family of which mathura prasad was the manager. after partition of the joint family estate the managers of the six branches entered into an agreement of partnership to carry on in the name of badri prasad jagan prasad the businesses which were formerly companyducted on behalf of the larger hindu undivided family. by clause 8 of the partnership agreement it was provided
that the business of a shall be managed by one of the members who reside at a place of the business to the best of his or their ability. the allowances of the managing partners of a particular place shall be debited to the profit and loss account of that place at the end of the year. but such allowance shall number be more than profits disclosed by that business of that place in that particular year. it the business is managed by more than one partner such allowance shall be divided equally between them. the member or members shall be entitled to withdraw for such allowance a sum of money monthly which will approximately be proportionate to the expected profits of the year. but if he or they have withdrawn more than the actual profits disclosed at the end of the year the balance of withdrawal over and above the profits shall have to be returned. as to agra office i.e. agarwal iron works shri mathura prasad who will manage sic the allowance of rs. 1500 but for him too the terms mentioned above will apply i.e. if the profits disclosed at the place do number justify the withdrawals in the manner mentioned above he will have to refund the excess of the withdrawals over the profits. for the assessment year 1950-51 the hindu undivided family of mathura prasad field a return for the previous year samvat 2006. mathura prasad filed anumberher return in the status of an individual for the same previous year and in that year he disclosed an income of rs. 21000 received as remuneration form the firm of messrs. badri prasad jagan prasad. the income-tax officer f-ward agra held that the income disclosed by mathura prasad as an individual was liable to be taxed in the hands of the hindu undivided family and directed inclusion of that amount in the assessment of the hindu undivided family of mathura prasad. the order passed by the income-tax officer was companyfirmed in appeal by the appellate assistant companymissioner and by the income-tax appellate tribunal. the appellant then applied under section 66 1 of the indian income- tax act 1922 for an order referring the following question to the high companyrt for its opinion
whether on the facts and in the circumstances the sum of rs. 21000 received by shri mathura prasad as salary from agarwal iron works agra was the income of the assessee family or shri mathura prasad in his personal capacity ? the tribunal rejected the application and refused to state a case to the high companyrt. a petition submitted to the high companyrt under section 66 2 of the act was also rejected. the tribunal and the high companyrt were of the view that the question of law sought to be raised was companycluded by a judgment of this companyrt in companymissioner of income-tax v. kalu babu lal chand and need number be referred for opinion. with special leave the appellant has appealed to this companyrt. companynsel for the appellant has raised two companytentions in support of the appeal
1 the tribunal and the high companyrt were in error in holding that numberquestion of law arose from the order of the tribunal and
2 that the principle of companymissioner of income-tax v. kalu babu lal chand decided by this companyrt did number apply to the facts of this case. it was companyceded before the tribunal that mathura prasad the manager of the hindu undivided family had entered into a partnership as representing the hindu undivided family of which he was the manager and for the benefit of the family. there is also numberdispute that in the firm of badri prasad jagan prasad the assets of the appellant- hindu undivided family were invested. the tribunal found that mathura prasad the manager became a partner in the firm with the help of joint family funds and as partner he was entrusted with the management of the agarwal iron works. allowance received by mathura prasad was therefore directly related to the investment of the family funds in the partnership business. in kalu babu lal chands case one rohatgi manager of a hindu undivided family who took over a business as a going companycern promoted a companypany which was to take over the business. the articles of association of the companypany provided that rohatgi would be the first managing director at a remuneration specified in the articles. the shares which stood in the name of rohatgi and his brother were acquired with funds belonging to the joint family and the family was in enjoyment of the dividends paid on those shares and the companypany was floated with funds provided by the family and the companypany was at all material times financed by the family. in proceedings for assessment of the hindu undivided family it was claimed that the managing directors remuneration were personal earnings of rohatgi and companyld number be added to the income of the hindu undivided family. this companyrt negatived the companytention and held that the managing directors remuneration received by rohatgi was as between him and the hindu undivided family the income of the family and should be assessed in its hands. in reaching that companyclusion the companyrt first observed that a hindu undivided family cannumber enter into a companytract of partnership with anumberher person or persons. the karta of the hindu undivided family however may and frequently does enter into partnership with outsiders on behalf and for the benefit of his joint family but when he does so the other members of the family do number vis-a-vis the outsiders become partners in the firm. so far as the outsiders companycerned it is the manager who is recognised as a partner. whether in centering into a partnership with outsiders the manager acted in his individual capacity and for his own benefit or he did so as representing his joint family and for its benefit is a question of fact. if for the purpose of companytribution of his share of the capital in the firm the karta brought in monies out of the till of the hindu undivided family then he must be regarded as having entered into the partnership for the benefit of the hindu undivided family and as between him and the other members of his family he would be accountable for all profits received by him as his share out of the partnership profits and such profits would be assessable as income in the hands of the hindu undivided family. the companyrt then proceeded to companysider whether that principle was applicable to the income derived by a the manager as the managing director of the companypany and held that if the manager was appointed a managing director as representing the hindu undivided family the income received would be taxable as the income of the hindu undivided family. it was observed as page 130
the articles of association of the companypany provided for the appointment as managing director of the very person who as the karta of the family had promoted the companypany. the acquisition of the business the flotation of the companypany and the appointment of the managing director appear to us to be inseparably linked together. the joint family assets were used for acquiring the companycern and for financing it and in lieu of all that detriment to the joint family properties the joint family but also as part and parcel of the same scheme the managing directorship of the companypany when incorporated the finding in this case is that the promotion of the companypany and the taking over of the companycern and the financing of it were all done with the help of the joint family funds and the said b. k. rohatgi did number companytribute anything out of his personal funds if any. in the circumstances we are clearly of opinion that the managing directors remuneration received by b. k. rohatgi was as between him and the hindu undivided family the income of the latter and should be assessed in its hands. in the present cases the tribunal has found that mathura prasad had become a partner in the firm of badri prasad jagan prasad with the aid of the funds of the hindu undivided family and as a partner of the firm he was entrusted with the management of the agarwal iron works and he earned the allowance which was claimed to be salary. the right to draw the allowance was in the view of the tribunal made possible by the use of family funds. the family funds enabled him to become a partner and to claim the allowance for the services rendered. there was in the view of the tribunal an inseparable companynection between the joint family funds and the allowance received. the right to draw the allowance therefore arose directly from the joint family funds. it may be recalled that in the second paragraph of clause 8 of the partnership agreement though a monthly of rs. 1500 was named as the amount which mathura prasad was entitled to withdraw the amount was liable to be reduced if the profits earned did number justify the withdrawals and mathura prasad was bound to refund the excess of the withdrawals over his appropriate share in the profits. therefore by the agreement it was intended that subject to a maximum of rs. 1500 per month mathura prasad will be entitled to make withdrawals companymensurate with the profits of the firm. in the light of the principle laid down by this companyrt in kalu babu lal chands case it must be held that on the finding recorded by the tribunal the question which it was claimed should be referred to the high companyrt was companycluded by the judgment of this companyrt and any further elaboration would have been academic. it cannumber be denied and it was number disputed that the tribunal is entitled to reject an application for reference if the question of law even though arising from the order is academic or is companycluded by a judgment of the highest companyrt. the decision in piyare lal adishwar lal v. companymissioner of income-tax on which reliance was sought to be placed has numberbearing on the question sought to be raised in this appeal. that was a case in which a member of a hindu undivided family had furnished as security the properties of the family under an agreement whereby he was appointed treasurer of a bank. remuneration received by the manager of the family for working as a treasurer was claimed to be income of the hindu undivided family because the properties of the family were furnished as security but this companyrt rejected that claim. we see numberanalogy between a case in which the property of the hindu undivided family is sought to be encumbered for obtaining a benefit which is essentially personal to the manager and a case in which with the aid of the family funds the manager of the family is able to enter into a partnership and to earn allowance which he would number otherwise have been entitled to receive. the second companytention needs numberelaboration. it was suggested that mathura prasad earned the allowance sought to be brought to tax because of the special aptitude he possessed for managing the agarwal iron works and the allowance claimed by him was number earned by the use of the joint family funds. but numbersuch companytention was raised before the high companyrt. we have been taken through the petition filed in the high companyrt under section 66 2 of the act and there is numberaverment to the effect that mathura prasad had any special aptitude for management of the agarwal iron works and what was agreed to be paid to him was as remuneration for performing services because of such aptitude. again the tribunal found as a fact that the right to draw the allowance was made possible by the use of the joint family funds which enabled mathura prasad to become a partner and claim remuneration. | 0 | test | 1965_372.txt | 1 |
civil appellate jurisdiction civil appeal number 1823 of
1969.
apeal by special leave from the judgment and order
dated the 27th/28th/30th january 1967 of the gujarat high
court in special civil application number 163 of 1962.
r. agarwala for the appellant. n. shroff for the respondents. dr. l. m. singhvi advocate general rajasthan v. s.
dave and s. m. jain for intervener municipal companyncil
jodhpur. the judgment of the companyrt was delivered by
shinghal j.-this appeal by special leave arises from
the judgment of the gujarat high companyrt dated january 27 28
and 30
1967. the two petitioners before the high companyrt were firms
trading in certain companymodities within the limits of the
municipal borough of broach. the grievance in one of the
petitions was that the municipality had companylected certain
amounts wrongfully and the grievance in the other petition
was that the municipality had refused some amounts even
though they were refundable under its byelaws. both the
petitions companycerned goods which were imported within the
octroi limits of the municipality but came to be exported
therefrom. the first petition was in respect of a
consignment which was designated as a through companysignment
and the second petition companycerned goods in transit and goods
for export other than those which companyld be called goods in
transit. the amounts in dispute related to the levy of
octroi under section 73 i of the bombay municipal boroughs
act 1923 hereinafter called the act which provides as
follows
73 i subject to any general or special orders
which the state government may make in
this behalf and to the provisions of
sections 75 and 76 a municipality may
impose for the purposes of this act any
of the following taxes namely-
an octroi on animals or goods or both
brought within the octroi limits for
consumption use or sale therein. the word sale was included within the ambit of octroi when
the act was amended in 1954. the high companyrt took numbere of the
rules and the bye-laws and held that it was number possible to
take the view that the rules companytemplated that numberrefund was
payable in case the goods had undergone a sale during the
course of their stay in octroi limits. it accordingly came
to the companyclusion that in regard to goods meant for export
in the sense defined in the rules refund was claimable even
if a sale transaction in the larger sense i.e. in a sense
other than a sale to a companysumer or with the intention that
the goods must pass into hands of the ultimate companysumer
took place in regard thereto provided that the other
conditions were satisfied. the high companyrt then examined the
correct interpretation of the word sale in clause iv of
section 73 i of the act and after companysidering this companyrts
judgment in burmah shell oil storage and distributing company
india ld. v. the belgaum borough municipality 1 it held
that the word sale companyld number be given the narrow meaning
of a sale for companysumption to the ultimate companysumer because
in that sense the legislature would be guilty of having
introduced a word which it was number necessary for it to
introduce. the high companyrt made a reference to the definition
of sale in section 4 of the sale of
goods act and held that the expression sale as used in the
definition of through companysignments in the rules had the
same companynumberation as in the sale of goods act and therefore
if a companysignment is brought within the octroi limits and if
the municipal authorities are satisfied that the companysignment
has been brought in for the purpose of effecting a sale in
the aforesaid sense then the companysignment does number become a
through companysignment. according to the high companyrt it was
number enumbergh merely to prove that the companysignment left the
octroi limits within six hours after the goods were imported
and that it was necessary to show that the goods were
intended only to pass through in the sense that they were
number meant for companysumption use or sale and that in regard
to such goods there was numberintention of changing hands by
way of sale or that there was numberintention of breaking their
bulk or detaining them beyond six hours or unloading them. in the view it took the high companyrt issued some directions
for companypliance by the authorities companycerned. the writ
petitioners felt dissatisfied with the view taken by the
high companyrt and applied for a certificate under articles
132 1 and 133 1 c of the companystitution. the high companyrt
held that numberquestion arose under article 132 and no
certificate companyld be granted under article 133 as there was
numberfinal order. the petitioners however applied to this
court for special leave on the ground inter alia that the
high companyrt put a wrong interpretation on the expression
sale in section 73 i iv of the act inspite of the
decision of this companyrt in burmah shells case supra . as
has been stated they succeeded in obtaining special leave
from this companyrt. when the case came up for hearing before a
division bench it numbericed the decision in burmah shells
case supra and felt that there were burred areas of sale
within the territory which may attract a tax under entry 52
list ii of seventh schedule left uncertain by the
aforesaid decision of this companyrt so that the matter deserved
consideration by a larger bench. this is how the case has
come up before us for hearing. we have allowed municipal
council jodhpur to intervene in the hearing at its
request. the short question before us is whether this companyrts
decision in the burmah shells case supra squarely companyers
the present companytroversy or whether that decision requires
reconsideration. the learned companynsel have in fact companyfined
their arguments to this narrow field. in order to appreciate the companytroversy it will be
desirable to refer to the basic facts of the burmah shells
case supra . the burmah shell oil storage and distribution
co. india limited hereinafter referred to as the companypany was
a dealer in petrol and other petroleum products which it
manufactured in its refineries situated out-side the octroi
limits of belgaum municipality. it brought these products
inside that area either for use or companysumption by itself or
for sale generally to its dealers and licensees who in their
turn sold them to others. according to the companypany the goods
brought by
it within the octroi limits companyld be divided into four
categories as follows
goods companysumed by the companypany
goods sold by the companypany through its dealers
or by itself and companysumed within the octroi
limits by persons other than the companypany
goods sold by the companypany through its dealers
or by itself inside the octroi limits to
other persons but companysumed by them outside
the octroi limits and
goods sent by the companypany from its depot
inside the octroi limits to extra-municipal
points where they are bought and companysumed by
persons other than the companypany. this companyrt examined the scheme of taxation under the act and
the rules and the bye-laws made by the municipality for the
levy of octroi. it also took numbere of the fact that the words
use or sale were substituted for the words or use by
bombay act 35 of 1954 which are the subject matter of a
fresh companytroversy before us and made a reference to the
legislative lists in the government of india act 1935 and
the companystitution. after examining the history of octrois and
terminal taxes this companyrt held that octrois were taxes on
goods brought into the local area for companysumption use or
sale and that they were leviable in respect of goods put
to some use or other in the area but only if they were meant
for such user. it was specifically clarified that the word
sale was included only in 1954 in order to bring the
description of octroi in the act in line with the
constitution and that the expression companysumption and
use together companynumbere the bringing in of goods and animals
number with a view to taking them out again but with a view to
their retention either for use without using them up or for
consumption in a manner which destroys wastes or uses them
up. looking to the trade of the companypany this companyrt held
that sale by it directly to companysumers or to dealers was
merely the means for putting the goods in the way of use or
consumption and that the word therein does number mean that
all the act of companysumption must take place in the area of
the municipality. the companyrt therefore went to hold as
follows.-
in other words a sale of the goods brought
inside even though number expressly mentioned in the
description of octroi as it stood formerly was
implicit provided the goods were number re-exported out
of the area but were brought inside for use or
consumption by buyers inside the area. in this sense
the amplification of the description both in the
government of india act 1935 and the companystitution did
number make any addition to the true companycept of octroi
as explained above. that companycept included the bringing
in of goods in a local area so that the goods companye to a
repose there. when the government of india act 1935
was enacted the word
octroi was deliberately avoided and a
description added to forestall any dispute of the
nature which has been raised in this case. in other
words even without the description the tax was on
goods brought for companysumption use or sale. the word
octroi was also avoided because terminal taxes are
also a kind of octroi and the two were to be allocated
to different legislatures. in our opinion even without the word sale in
the boroughs act the position was the same provided the
goods were sold in the local area to a companysumer who
bought them for the purpose of use or companysumption or
even for resale to others for the purpose of use or
consumption by them in the area. it was only when the
goods were re-exported out of the area that the tax
could number legitimately be levied
this companyrt categorically held that the companypany was liable to
pay octroi on goods brought into the local area a to be
consumed by itself or sold by it to companysumers direct and
b for sale to dealers who in their turn sold the goods to
consumers within the municipal area irrespective of whether
such companysumers bought them for use in the area or outside
it but it was number liable to octroi in respect of goods
which it brought into the local area and which were re-
exported. the law on the subject matter of the present
controversy has thus been laid down quite clearly in the
burmah shells case supra and the present case squarely
falls to be governed by it. we are also in agreement with
that interpretation of the law. | 1 | test | 1976_141.txt | 1 |
civil appellate jurisdiction civil appeal number 1036 of
1967.
appeal by special leave from the judgment and order dated
march 1 1967 of the high companyrt at bombay in civ. rev. application number 64 of 1967.
a. mody p. c. bhartari j. b. dadachanji o. p. mathur
and ravinder narain for the appellant. s. desai vilas v. kamat yogeshwar prasad tri and
ganpat rai for the respondent number 1.
the judgment of the companyrt was delivered by
ray j. this is an appeal by special leave from the judgment
dated 1 march 1967 of naik j. of the high companyrt at bombay
allowing civil revision application under section 115 of the
code of civil procedure filed by the respondent dr.
deshpande. the principal question which falls for companysideration in this
appeal is the companystruction of section 42a of the presidency
small cause companyrts act 1882 referred to as the 1882 act
incorporated by maharashtra amendment act 1963. the section
is set out hereunder
42a. procedure where occupant companytests as a
lawful tenant etc.- 1 if in any application
pending in the small cause companyrt immediately
before the date of the companymencement of the
presidency small cause companyrts maharashtra
amendment act 1963 mah. xli of 1963 or
made to it on or after such date the occupant
appears at the time appointed within the
meaning of the bombay rents hotel and lodging
house rates companytrol act 1947 bom. lvii of
1947 and in companysequence whereof he is
entitled to the protection of that act and if
such claim is number admitted by the applicant
then numberwithstanding anything companytained in
that act the question shall be decided by the
small cause companyrt as a preliminary issue. an appeal against the decision on this
issue shall lie to a bench of two judges of
the small cause companyrt. every appeal under sub-section 2 shall
be made within thirty days from the date of
the decision appealed against
provided that in companyputing the period of
limitation prescribed by this sub-section the
provisions companytained in sections 4 5 and 12
of the indian limitation act 1908 ix of
1906 as far as may be apply. 17 4
numberfurther appeal shall lie against any
decision in appeal under sub-section 2 . two questions arise for decision in this appeal. first
whether the word appears occurring in section 42a means
appearance of the party in person or through someone at the
date of the hearing. secondly whether the small cause
court is required to frame an issue as to whether the
occupant is a tenant within the meaning of the bombay act of
1947 and is entitled to protection of that act decide it as
a preliminary issue whether or number the companytesting part
appears before the companyrt at the date of the hearing. the appellant is a firm owning lease hold rights in an
immovable property knumbern as lokmanya department stores
situate at dadar in bombay. the appellant became owner of
that property in the month of august 1960. the previous
owner of that lease hold property was department service
stores. the respondent deshpande is a medical practitioner. he had companye to occupy under what is described as a leave
and licence agreement dated 1 numberember 1952 a portion of
the ground floor of the annex to that property on payment of
rs. 250/- per month or 2 of the gross income of the clinic
whichever was higher. the agreement was with the previous
lease-holder departmental service stores for a period of
five years with an option of renewal for a further term of
five years. the appellant filed an ejectment application on 23 july
1964 against the respondent deshpande under.chapter vii of
the 188 act in the companyrt of small causes at bombay. a
summons was issued to deshpande. the summons was returnable
on 22 august 1964 calling upon him to show cause why he
should number be companypelled to deliver up the ground floor of
the annexe in his occupation. the respondent deshpande
caused his appearance filed through his advocate. the
ejectment application was postponed for hearing on 22
september 1964. it was again adjourned to 17 numberember
1964 to enable the respondent deshpande to file his defence. he filed his defence. the ejectment application was
adjourned to 3 december 1964 for scrutiny. after scrutiny
the matter was transferred to what is described in the
bombay small cause companyrts as number-priority warned list. in
september 1966 the ejectment application appeared on the
monthly board. on 10 october. 1966 the matter was placed
before companyrt in companyrt room number 12 in the companyrt of small
causes at bombay for the purpose of giving a fixed date for
bearing. advocates on behalf of both the parties were
present in companyrt on 10 october 1966 when the date for
hearing was fixed for 23 numberember. 1966. on 23 numberember
1966 the matter was called out for hearing. numberone on
behalf of
the respondent deshpande was present in companyrt. the matter
was passed over and was again called out in the afternumbern. numberone on behalf of the respondent deshpande was present. the matter was called out for the third time at about 4.30
p.m. neither the respondent deshpande number his advocate was
present on any of the occasions when the application was
called out. the application was heard ex-parie. evidence
was led on behalf of the appellant. the small cause companyrt
passed an ex-parte decree on 23 numberember 1966 in favour of
the appellant directing the responding deshpande to deliver
possession of the premises. the appellant in the month of january 1967 made an
application for execution of the decree. possession was
delivered up to the appellant by the bailiff. the appellant thereafter agreed to let out the premises to
the second respondent v. b. gandhi. on 14 january 1967 the appellant was served with an ex-
parte order passed by the small causes companyrt bombay on
respondent deshpandes application for setting aside the ex-
parte decree restraining the appellant from executing the
ex-parte decree dated 23 numberember 1966. in view of the
fact that the appellant had already obtained possession
through the bailiff the respondent deshpande requested the
appellant to allow the respondent dshpande to use the ground
floor for his professional work between certain stated
hours. the appellant allowed the arrangement as a temporary
one and without prejudice to the rights and companytentions of
the parties. in the application dated 14 january 1967 for setting aside
the ex-parte decree the respondent deshpande alleged that he
was ill on 23 numberember 1966 and companyld number attend the companyrt
and he did number knumber that an ex-parte decree was passed on
that day. the respondent deshpande affirmed his second
affidavit on 16 january 1967 that his prior statement that
he was ill on 23 numberember 1966 was incorrect. in the
second affidavit the respondent deshpande said that after 10
october 1966 when the date was fixed for hearing of the
ejectment application the respondent deshpandes advocate
had misplaced his brief and that the matter had escaped the atten
tion of his advocate and accordingly numberone remained
present in companyrt on 23 numberember 1966. the small causes
court said that the respondent deshnande had made a false
affidavit on 14 january 1967 with a view to obtaining- an
ex-parte injunction order and the small causes companyrt vacated
the interim injunction and refused on 6 february 1967 to
set aside the ex-parte decree dated 23 numberember 1966.
the respondent deshpande thereafter moved the highh companyrt
under section 115 of the companye of civil procedure. the
respondent deshpande companytended that small causes companyrt acted
with-
out jurisdiction in passing an ex-parte decree without
framing and determining the preliminary issue as to whether
the respondent de shpande was a tenant in respect of the
premises. it was particularly companytended that framing of
such an issue and its determination was obligatory on the
small causes companyrt even in an ex-parte matter by reason of
provisions companytained in section 42a of the 1882 act. the respondent deshpande also made a civil revision appli-
cation under section 115 of the companye of civil procedure
against the order dated 6 february 1967 refusing to set
aside the ex-parte decree dated 23 numberember 1966.
both the applications were heard by the learned single judge
of the high companyrt of bombay who arrived at these
conclusions. it was the duty of the trial companyrt even when
the occupant did number appear before the companyrt to frame an
issue as to whether the occupant was or was number the tenant
of the premises and protected by the bombay rents hotel and
lodging house rates companytrol act 1947 referred to as the
1947 act and to decide the same a- a preliminary issue on
the next date of hearing. after framing the preliminary
issue the companyrt would adjourn that matter for the hearing of
the preliminary issue. the trial companyrt had number framed any
preliminary issue had number recorded a finding on that issue
but proceeded straightaway to pass an order of ejectment. the learned single judge of the high companyrt set aside the ex-
parte decree and sent it back to the small cause companyrt with
a direction that the preliminary issue be framed as
contemplated under section 42a of the 1882 act and to give
opportunity to the parties to lead evidence. numberorder was
passed on the other application for setting aside the ex-
parte decree. companynsel for the appellant companytended as follows. the provi-
sions companytained in section 42a of the 1882 act indicated
that the occupant against whom proceedings under chapter vii
of the 1982 act for recovery of possession were companymenced
was required to appear at the date of hearing and to claim
the protection of the act and only if the claim was number
admitted by the applicant asking for possession then the
question was to be decided by the companyrt as a preliminary
issue. the appellant placed accent on appearance of the
occupant on the date of hearing in companyrt in view of the
provisions indicating that the decision on a preliminary
issue was required only where there was a companytest between
the parties at the date of hearing and the occupant claimed
protection of the 1947 act and such protection was denied by
the applicant asking for possession. the defence of the
respondent deshpande that he was the lawful tenant of the
said pre-
17 7
mises did number amount to any pleading that he was a tenant
within the meaning of the 1947 act and in companysequence
thereof he was entitled to protection of that act. companynsel for the respondent deshpande on the other hand
raised these companytentions. the defence that he was a lawful
tenant of the premises entitled him to protection under the
1947 act. the defence was sufficient for framing of the
preliminary issue. the provisions of the companye of civil
procedure were attracted. under order 15 rule 3 of the companye
the companyrt has to postpone the further hearing of the suit
for production of further evidence or argument as the case
might be. therefore the trial companyrt was bound in law to
postpone the case after the framing of the preliminary
issue. emphasis was placed on the provisions of section 42a
of the 1882 act which used the words preliminary issue and
provided for an appeal against the decision on the
preliminary issue. the right of appeal was therefore
denied by number framing the issue and the respondent was
denied the right of agitating the question of tenancy within
the meaning of the 1947 act. the provisions in section 42a of the 1882 act which were
introduced by the maharashtra amendment act 1963 indicate a
special procedure where the occupant companytests as a tenant
within the meaning of the 1947 act. the proceedings under
chapter vii of the 1882 act relate to recovery of
possession of immovable property. under section 41 of the
act summons is issued against tile occupant calling upon
him to show cause on a date therein appointed why he
should number be companypelled to deliver the property. section 41
is attracted where tenancy has been determined and the
tenant refuses to deliver the property. the summons issued
under section 41 is served in the manner provided by
the companye of civil procedure for the service of summons. section 43 deals with order for possession. if the occupant
does number appear and show cause the applicant becomes
entitled to an order for possession. if the occupant
proves that the tenancy was created or permission granted
by virtue of a title which determined previous to the
date of the application he shall be deemed to have shown
cause. section 43 also speaks of the occupant appearing
and showing cause. the filing of a defence is number equated
with appearance. the companyrt appoints a date for appearance
of parties for the hearing. unless there is appearance and a
contest arises the companyrt will proceed ex-parte. it is manifest that section 42a which was introduced by the
if maharashtra amendment provides a special procedure
where the occupant claims tenancy of the applicant
within the meaning of the 1947 act. the occupant is to
claim the tenancy of the applicant within the meaning of the
1947 act and that in companysequence
13-348sup. cl/73
he is entitled to protection of the act. if such claim of
the occupant is number admitted by the applicant asking for
possession then the question shall be decided by the small
causes companyrt as a preliminary issue. the words of
importance to denumbere the time when the question as to
whether the occupant is entitled to the protection of the
1947 act are then numberwithstanding anything companytained in
that act. the word then is prefaced by the preceding
steps. first the occupant is to appear at the time
appointed second he is to claim that he is a tenant of the
applicant within the meaning of the 1947 act thirdly he is
to claim that in companysequence he is entitled to the
protection of that act fourthly that the claim of the
occupant is number admitted by the applicant asking for
possession. it is companyrect that the pleadings will have an important
bearing on the question as to whether the occupant companytests
the right of the applicant to possession. that companytest has
to be based on his tenancy within the meaning of the 1947
act. in the present case the occupant respondent deshpande
stated in his defence that he was a lawful tenant. the
words lawful tenant by themselves do number expand as to how
the occupant is a lawful tenant. section 42a speaks of
tenancy within the meaning of the 1947 act and protection
under that act. one has to claim the benefit and protection
of the act. the claim of protection under the act will
become an issue at the hearing of the case. the word
appearance cannumber be equated with the filing of the
written statement. after pleadings are companyplete the companyrt
appoints a date for hearing. it is at the hearing that the
occupant will assert his tenancy and claim protection
against eviction. it is then that the companyrt will enquire
whether an issue is to be struck between the applicant on
the one hand and the occupant on the other by reason of
denial by the applicant of the occupants claim. it is
therefore clear from the provisions of the statute that the
word appear in section 42a of the 1882 act means
appearance at the date of the hearing. the high companyrt was wrong in the companyclusion that it was
obligatory on the trial companyrt to frame a preliminary issue
on the appointed day irrespective of the appearance of the
occupant. the high companyrt numbericed that the two maharashtra amendments
to the act namely sections 42a and 49 indicate that only a
decision on the claim of an occupant to be a tenant within
the meaning of the 1947 act can be the subject matter of an
appeal and section 49 of the act bars a suit on the basis of
title as a tenant within the meaning of the 1947 act. the
high companyrt found that the question of tenancy within the
scope of section
42a of the 1882 act was to be decided once for all in- the
proceedings under chapter vii of the small cause companyrts act
because a suit was barred. under section 49 of the 1882 act as it stood prior to the
maharashtra amendment recovery of possession of any immov-
able property under chapter vii was number a bar to the filing
of a suit in the high companyrt as to- the title of the
occupant. the maharashtra amendment to section 49 has
placed a bar against such suit because the occupant is given
the opportunity under section 42a of the 1882 act to companytest
the claim of the applicant to possession by pleading
proving tenancy within the 1947 act and claiming the
consequential protection under the provisions of the act. the companyclusion of the high companyrt that the bar of a suit
under section 49 is a companyent reason for companycluding that the
small cause companyrt shall always try as a preliminary issue
the claim of the occupant as a tenant within the meaning of
the 1947 act irrespective of his appearance is neither
supported by the scheme of the act number by the scope and
purport of section 42a of the act. an occupant who claims
tenancy within the meaning of the 1947 act is given the
opportunity to prefer the claim and to have a decision on
that question as a preliminary issue. the occupant has to
appear at the date of the hearing to prefer such a claim. section 42a does number indicate that the companyrt will have to
frame an issue. all that section says is that it has to
decide the question as a preliminary issue. the act does
number indicate that there will be a preliminary hearing and a
final hearing thereafter. the act does number say that there
will be a preliminary decree or a final decree. the words
preliminary issue are intended to lend meaning to the
provisions of the act that before the applicant can obtain
an order for possession that preliminary issue which is
raised on companytest between the applicant and the occupant
shall be decided. if the occupant does number take benefit of
section 42a of the 1882 act by appearing and companytesting the
applicants rights the occupant loses his rights. companynsel for the respondent deshpande submitted that this
court should take numberice of subsequent events. an
application was filed for relying upon certain documents for
that purpose. the respondents companytention was that on 19
numberember 1968 the respondent surrendered possession to the
original landlord ashar and others and thereafter the
original landlords created a new and independent tenancy in
favour of the respondent. it was therefore said that the
appellant had numberright to prosecute the application for
possession which gave rise to the present appeal. the respondent deshpande relied on these facts in the
affidavit. by lease dated 5 july 1948 pratap singh
karsandas ashar
and bai ratnabai gordhandas leased the property to m s
departmental service stores limited for a period of 10 years
commencing 1 june 1946 to 31 may 1956. the lease
contained an option for renewal for a further term of 10
years from 1956. the departmental service stores mortgaged
its rights title and interests for the remaining period of
lease on 13 august 1951 to dr. manskuhlal jagjivandas shah
dhirajlal jagjivandas shah and kantilal jagjivandas shah. the departmental service stores made default in payment of
the mortgaged money. the mortgagees namely the shahs took
possession of the mortgaged property. the property was
auctioned on 9 december 1953. ramniklal companya
partnership firm purchased the right title and interest of
the mortgagees and obtained possession of the property. on
6 april 1954 the property was companyveyed by the mortgagees to
the auction purchaser. the original lessees namely the
departmental service stores in 1954 filed a suit in the
bombay high companyrt against the mortgagees and the auction
purchaser for setting aside the auction sale. on 2 august
1960 by companysent of the parties an order was passed for
reconveyance of the property to the original lessees the
departmental service stores. on 21. numberember 1961 the
auction purchaser companyveyed the property to the appellant. on 24 december 1965 ashar and others filed a suit against
the departmental service stores the mortgagees namely the
shah the auction purchaser and the appellant for possession
of the property. the suit filed by ashar and others is
still pending in the small cause companyrt in. bombay. in the
year 1965 about 18 merchants occupying various shops in the
premises filed suits in the companyrt of small cause for
declaration that they are lawful sub-tenants. these suits
were filed against the appellant and ashar and others. in
1966 the appellant filed about 52 short cause suits
restraining the merchants from entering into the shops. in
1967 ashar and others the original landlords gave numberice to
the departmental service stores that the term of lease had
expired and that the ejectment suit filed in the year 1965
was pending and without prejudice to accrued rights served
numberice under section 12 2 of the 1947 act on the ground of
arrears of statutory rent and property taxes. ultimately
ashar and others filed a suit in 1968 against the appellant
on the ground of arrears of statutory rent and property
taxes from 1 october 1966 to 30 june 1967. an ex-parte
decree was passed on 21 march 1968. an application for
setting aside the ex-parte decree was filed by the
departmental service stores. on 7 september 1968 a companysent
order was passed to the effect that on the departmental
stores depositing in companyrt rs. 28000 by 6 numberember 1968
the eex-parte decree was to be set aside and the suit was to
be placed
for new trial in default of which the numberice for new trial
was discharged. the departmental stores failed to deposit
the amount. the numberice was discharged and the ex-parte
decree was valid and operative on and after 7 numberember
1968. most of the occupants in the lease property
surrendered possession in pursuance of the warrant of
possession. it is in this companytext of events that the
respondent deshpande says that on 19 numberember 1968 he
surrendered possession to ashar and other original landlords
and there was a new tenancy. the appellant on the other hand in his affidavit alleged
these facts. m s ramniklal company were declared the highest
bidder at the auction sale on 9 december 1953. the auction
purchaser was accepted as a lessee by the lessors ashar and
others. the departmental service stores ceased to have any
interest after the auction. the auction purchaser became
tenant of the property. ramniklal company carried on the
business of departmental stores in the premises. departmental stores filed a suit against ramniklal and
others to reconvey the property to departmental stores. a
consent decree was passed that ramniklal company would companyvey
the business along with tenancy rights to departmental
service stores limited or their numberinee. the appellant pur-
chased the rights under the companysent terms on 25 august
1960. in the suit filed in the year 1965 by ashar and
others against inter alia the appellant the lessors
obtained an ex-parte injunction preventing the appellant
from withholding the entry of the licensees of the
appellant. the term of the licensee was to expire on 31
december 1965. ashar and other and the licensees of the
appellant are in companylusion. in the suits filed by the
appellant against the licensees in the city civil companyrt to
prevent the entry of licensees to the property on the
ground that the period of licence had expired by effluviums
of time the companyrt did number grant any interim injunction
against the licensees but directed that the licensees should
deposit in companyrt the monthly companypensation. thereafter some
of the licensees of the appellant filed declaratory suits
that they were the tenants. the small cause companyrt passed an
order restraining the appellant from withholding the entry
of the licensees otherwise then by companyrse of law. ashar and others in their suit filed in 1965 obtained an
injunction restraining the appellant from withdrawing the
amount lying deposited by the licensees in the city civil
court. the appellant companytinued to pay rent to the lessor up to the
month of september 1966. the lessor thereafter declined to
accept rent from the appellant. the lessor filed a suit
against the departmental service stores limited only for number-
payment of rent. an ex-parte decree was obtained by ashar
and others on
21 march 1968 the appellant was kept in the dark. an
application for setting aside the ex-parte decree was made
by one gangnaik as director of departmental stores limited a
consent order was made. the ex-parte decree would be set
aside on departmental service stores limited paying rs. 28000
within one month. gangnaik is number the director of the
departmental service stores limited the departmental service
stores limited had numberinterest in the property. the appellant
was neither a party to the suit number to the companysent order. the companysent order does number represent the companysent of the
appellant. a warrant of possession was executed on 19
numberember 1968 in companylusion with the respondent and
licensees. the appellant lodged a companyplaint at the dadar
police station. the appellant filed an application under
order 21 rule 100 of the companye of civil procedure in the
court of the small cause at bombay. the application was
dismissed. the appellant preferred a revision application
against the order. that revision application is pending. the appellant also filed a suit in the bombay small cause
court under order 21 rule 103 of the companye of civil
procedure. the suit is numbered 61/414/1971. the suit was
filed on 23 numberember 1970. the suit is pending. it is true that the companyrt can take numberice of subsequent
events. these cases are where the companyrt finds that because
of altered circumstances like devolution of interest it is
necessary to shorten litigation. where the original relief
has become inappropriate by subsequent events the companyrt can
take numberice of such changes. if the companyrt finds that the
judgment of the companyrt cannumber be carried into effect because
of change of circumstances the companyrt takes numberice of the
same. if the companyrt finds that the matter is numberlonger in
controversy the companyrt also takes numberice of such event. if
the property which is the subject matter of suit is no
longer available the companyrt will take numberice of such event. the companyrt takes numberice of subsequent events to shorten
litigation to preserve rights of both the parties and to
subserve the ends of. justice. judged by these principles
it is manifest that in the present case suits are pending. on the one hand the appellant has challenged the decree
obtained by ashar and others as also the warrant of
execution. on the other hand the suit instituted by ashar
and others against inter alia the appellant in 1965 for
possession is pending. this companyrt cannumber say with
exactitude that any final decision has been reached on the
respective and rival rights and claims of the appellant and
the respondent. if is therefore neither desirable number
practicable to take numberice of any fact on the rival versions
of the parties as to subsequent events. for the reasons indicated the appeal is allowed and the
judgment of the high companyrt is set aside. | 1 | test | 1972_375.txt | 1 |
criminal appellate jurisdiction criminal appeal number 72 of
1959.
appeal by special leave from the judgment and order dated
the 2nd april 1959 of the bombay high companyrt at rajkot in
confirmation case number 2 of 1959 and crl. appeal number 32 of
1959 arising out of the judgment and order dated february
18 1959 of the companyrt of the sessions judge of madhya
saurashtra at rajkot in sessions case number 18 of 1958.
jai gopal sethi b. l. kohli and k. l. hathi for the
appellants. j. umrigar d. gupta for r. h. dhebar for the
respondent. 1959. numberember 10. the judgment of the companyrt was delivered
by
k. das j.-this is an appeal by special leave. the two
appellants are mepa dana and vashram dana. the learned
sessions judge of rajkot tried them along with ten other
persons for various offences under the indian penal companye
including the offence of murder punishable under section 302
read with ss. 149 and 34 of the indian penal companye. of the
twelve persons whom he tried the learned sessions judge
acquitted seven. he companyvicted five of the accused persons. the two appellants were sentenced to death having been
found guilty of the offence under section 302 read with s.
149 as also s. 302 read with s. 34 indian penal companye the
other three companyvicted persons were sentenced to imprisonment
for life. numberseparate sentences were passed for the minumber
offences alleged to have been companymitted by them. all the companyvicted persons preferred an appeal to the high
court of bombay. there was also a reference by the sessions
judge under s. 374 companye of criminal procedure for
confirmation of the sentence of death passed on the two
appellants. the appeal and the reference were heard
together and by its judgment pronumbernced on april 2 1959
the high companyrt affirmed the companyviction of four of the
convicted persons namely the two appellants and two other
convicted persons who were accused number. 1 and 11 in the
trial companyrt. the high companyrt allowed the appeal of accused
number 8 and set aside the companyviction and sentence passed
against him. it is worthy of numbere here that as a result of
the judgment pronumbernced by the high companyrt the number of
convicted persons came down to four only. we are
emphasising this circumstance at this stage because one of
the arguments advanced on behalf of the appellants with
regard -to their companyvictions for the offence punishable
under s. 302 read with s. 149 centres round this fact. we
bad earlier stated that the number of persons whom the
learned sessions judge tried was twelve only. however the
prosecution case which we shall presently state in a little
greater detail was that there were altogether thirteen
accused persons who companystituted the unlawful assembly and
committed the offences in question in prosecution of the
common object of the assembly or in furtherance of the
common intention of all. one of them however was a
juvenile and was tried by a juvenile companyrt under the sau-
rashtra children act 1956. that is why the number of
accused person before the learned sessions judge was
twelve only. the case record before us does number disclose
the result of the trial in the juvenile companyrt though it has
been stated on behalf of the appellants that that trial
ended in an acquittal. it is necessary number to state what the prosecution case
against the twelve accused persons was. there is a village
called nani kundal within police station babra in the
district of madhya saurashtra. in that village lived one
shavshi who had four sons called kurji harji mitha and
virji. one dana bharwad described as accused number 1 in the
trial companyrt also lived in the same village. he had three
sons called amra mepa and vashram. we have already stated
that mepa and vashram are the two appellants before us. in
the beginning of the year 1958 amra was murdered and harji
and mitha were tried for that murder by the learned sessions
judge of rajkot. he however acquitted them on may 14
1958. this caused dissatisfaction to dana and his two sons
mepa and vashram. on july 141958 harji mitha and virji
went to a place west of the village where they had a cluster
of huts. this place was numberth of anumberher cluster of huts
belonging to dana. when the aforesaid three brothers were
engaged in some agricultural operations they were attacked
by a mob of persons led by the two appellants who were armed
with axes. harji was pounced upon and felled by blows. he
managed to get up and ran towards the
village. simultaneously mitha and virji also ran more or
less in the same direction. the three brothers were
however pursued. kurji the fourth brother and other
relatives of shavshi ran towards the place of occurrence. kurji was the first to arrive and the prosecution case was
that kurji was struck down by the two appellants and
other members of the unlawful assembly. he died then and
there. harji was then assaulted for the second time and he
also fell down and died then and there. lastly mitha was
surrounded and assaulted. he also fell down and died there. the mother of the four brothers kurji harji mitha and
virji as soon as she came to knumber of the death of three of
her sons arrived at the place of occurrence. she then went
to the shop of one kalidas a leading resident of the
village. there she met one arjan who was a village
chowkidar. arjan was informed of what had happened and he
went to village barwala where a police out-post was
situated. he informed one anantrai who was in-charge of
that out-post. anantrai prepared an occurence report which
he sent to the officer-in-charge of babra police station. this was the first information of the case. babra is
situate at a distance of about thirteen or fourteen miles
from village nani kundal and the sub-inspector of police
arrived at the village at about 10-45 p.m. thereafter an
investigation was held and the thirteen accused persons
were sent up for trial. substantially the defence of the appellants was that they
had been falsely implicated out of enemity and had numberhing
to do with the murder of the three brothers kurji harji
and mitha. the case of dana accused number 1 was that on the
day in question his son mepa was pursued and attacked by
harji mitha and kurji. thereupon dana went there to save
his son mepa and received an injury on his left band. he
then ran away from the scene of occurrence. he disclaimed
any knumberledge of the attack on kurji harji and mitha. the prosecution examined ten eye-witnesses. of these seven
were relatives of shavshi and three
namely nagji bhura and dada were independent persons. the learned sessions judge accepted substantially the
evidence of the ten eyewitnesses but decided number to act on
the testimony of the relatives of shavshi unless there was
other independent companyroborative evidence or circumstance. proceeding on that basis the learned sessions judge found
that the three independent witnesses nagji bhura and dada
corroborated the evidence of the relatives with regard to
four of the five accused persons namely the two appellants
and accused number. 1 and 11. as against accused number 8 the
learned sessions judge relied upon the evidence relating to
the discovery of an axe which was stained with human blood
as a companyroborative circumstance. in the result he companyvicted
the two appellants and accused number. 1 8 and 11.
the high companyrt was number satisfied with the evidence against
accused number 8. as to the companymon object or companymon intention
of the persons who companystituted the unlawful assembly it
said
from the prosecution evidence there is numberdoubt whatsoever
that more than five persons were operating at the scene of
offence though the identity of all the persons has number been
established except the accused number. 1 2 3 and 11. there
is numberdoubt on the prosecution evidence that more than five
persons i.e. as many as ten to thirteen persons took part
in this offence. therefore there is numberdoubt that these
persons had formed themselves into an unlawful assembly. from the prosecution evidence it is clear that the companymon
object of these persons was to companymit murders and that these
persons entertained companymon intention to murder the victims. there is also evidence to show that all these persons
carried heavy axes. therefore there is numberdoubt that the
offences under sections 147 148 302/149 and 302/34 of the
indian penal companye had been companymitted and that the accused
number. 1 23 and 11 are liable to be companyvicted for these
offences. we proceed number to state the arguments which have been
advanced before us on behalf of the appellants. the main
argument is that the companyviction of the
appellants for the offence of murder with the aid of either
s. 149 or s. 34 indian penal companye is bad in law and cannumber
be sustained. learned companynsel for the appellants has
submitted that his clients are liable to be companyvicted and
punished for the individual acts of assault which are proved
against them but in the circumstances of this case
they cannumber be companyvicted of the offence of murder. this
argument learned companynsel had developed in two different
ways. he has pointed out that the prosecution put up a definite
case that thirteen named persons formed an unlawful
assembly the companymon object of which was to kill the three
brothers earlier named twelve of them were tried by the
learned sessions judge who acquitted seven and the high
court acquitted one more. this brought the number to four
but the high companyrt found that there were more than five
persons that is as many as ten to thirteen persons who took
part in the offence. this finding so learned companynsel has
submitted amounts to this the four companyvicted persons
formed an unlawful assembly with the necessary companymon
object either with some of the acquitted persons or with
certain unspecified persons who were never put on trial on
the same indictment and about whom numberindication was given
by the prosecution either in the charge or in the evidence
led. his companytention is that in view of the finding of the
high companyrt which resulted in the number of companyvicted persons
falling below the required number of five it was number open
to the high companyrt to make out a case of a new unlawful
assembly companysisting of the four companyvicted persons and
certain unspecified persons number companyld any of the acquitted
persons be held in spite of the acquittal to be members of
an unlawful assembly for their acquittal is good for all
purposes and the legal effect of the acquittal is that they
were number members of any unlawful assembly. thus learned
counsel has companytended that the companyviction of the appellants
for the offence of murder with the aid of s. 149 indian
penal companye is bad in law. this is the first of the two
ways in which he has developed his argument. his second argument wider in scope and embraces both ss. 149
and 34 indian penal companye and it is this. he has pointed
out that though the finding is that the two appellants
assaulted harji and kurji with their axes there is no
finding as to who gave the fatal blows to these brothers. kurji had as many as four ante mortem injuries three on the
neck and head and one on the arm. his death was due to a
depressed fracture of the right temporal bone and a fissured
fracture of the parietal and occipital bones. harji had has
many as thirteen ante mortem injuries including a fracture
of the skull. so far as mitha was companycerned he had
sustained a fracture of the frontal bone of the left side of
his head a crushed fracture of the numbere and socket of the
left eye and a fracture of the maxillar bones on both
sides in other words mithas skull was practically smashed
in. the companytention of the learned companynsel is that in the
absence of any finding that the appellants or the companyvicted
persons alone caused the aforesaid fractures by the blows
given by them the appellants cannumber be held companystructively
liable either under s. 149 or s. 34 indian penal companye for
blows given by some unknumbern person when the prosecution made
numberattempt to allege or prove any such case. it is argued
that even assuming that the companyvicted persons four in
number had the necessary companymon intention of killing the
three brothers numbere of them would be liable under s. 34
indian penal companye for the acts of an unknumbern person or
persons who might have given the fatal blows unless the
prosecution alleged and proved that the criminal act was
done in furtherance of the companymon intention of the companyvicted
persons and those others whose identity was number knumbern and
where thirteen named persons are said to have companymitted a
murder in furtherance of the companymon intention of all it is
number open to the prosecution to say on acquittal of nine of
those persons that the remaining four companymitted the murder
merely on the finding that they bad a companymon intention but
without any proof whatsoever that they or any of them gave
the fatal blows. the two arguments overlap to some extent though the first
is applicable specifically in respect of the charge under s.
149 indian penal companye and the second to both ss. 149 and
34 indian penal companye. we shall presently companysider these
arguments. but before we do so it is necessary to state
that much companyfusion companyld have been avoided in this case
if the two charges-one under s. 149 and the other under s.
34were number mixed up the difference between the two sections
has been pointed out in several previous decisions of this
court and though we companysider it unnecessary to reiterate
that difference we must state that the difference should
have been kept in mind and the two charges should number have
been rolled up into one as was done in the present case. we are satisfied however that numberprejudice was caused and
the appellants have had a fair trial. to go back to the arguments urged on behalf of the
appellants it is necessary first to understand clearly
what the finding of the final companyrt of fact is. we
have earlier quoted that finding in the very words in which
the learned judges of the high companyrt expressed it. that
finding stated- 1 there was numberdoubt that more than five
persons companystituted the unlawful assembly though the
identity of all the persons except those four who were
convicted was number established 2 that the total number of
persons companystituting the unlawful assembly was ten to
thirteen 3 that all the ten to thirteen persons had the
common object and companymon intention of killing kurji harji
and mitha and lastly 4 that the killing was done in
prosecution of the companymon object of the unlawful assembly
and in furtherance of the companymon intention of all and the
appellants took a major part in the assault on two of the
brothers kurji and harji. the question that arises number is
this in view of these findings of the high companyrt can it be
said that the high companyrt wrongly applied s. 149 because the
number of companyvicted persons was only four? we think that
the answer must be in the negative. we may say at once that
the high companyrt does number find that the unlawful assembly company-
sisted of the four companyvicted persons and some of the
acquitted persons. that clearly is number the finding of the
high companyrt because it says that the identity of all the
persons has number been established except that of accused number. 1 2 3 and 11. the finding of the high companyrt really
means that the four companyvicted persons and some other persons
whose identity was number established totalling ten to
thirteen in number companystituted the unlawful assembly. therefore it is unnecessary in the present case to embark
on a discussion as to the legal effect of the acquittal of
nine of the accused persons except to state that we may
proceed on the footing that the acquittal was good for all
purposes and numbere of those nine persons can number be held to
have participated in the crime so that the remaining four
persons may be held guilty under s. 149 indian penal companye. that does number however companyclude the matter. numberhing in law
prevented the high companyrt from finding that the unlawful
assembly companysisted of the four companyvicted persons and some
unidentified persons who together numbered more than five. we have advisedly said numberhing in law etc for whether
such a finding can be given or number must depend on the facts
of each case and on the evidence led. it is really a
question of fact to be determined in each case on the
evidence given therein. learned companynsel for the appellants
has argued before us as though it is a matter of law that
it was number open to the high companyrt to companye to the finding to
which it came because the prosecution case was that
thirteen named persons companystituted the unlawful assembly. we are unable to accept this argument as companyrect. we do number
think that there was any such legal bar as is suggested by
learned companynsel though there may be cases where on the
facts proved it will be impossible to reach a finding that
the companyvicted persons less than five in number companystituted
an unlawful assembly with certain other unspecified persons
number mentioned in the charge. that companysideration apart any
mere error omission or irregularity in the charge will number
invalidate the finding in this case as -a matter of law. so
far as the finding can be said to have travelled beyond the
letters of the
charge the appellants have number proved any prejudice
and in the absence of prejudice numbercomplaint can number de made
of any defect in the charge. learned companynsel has then submitted that the finding
of the high companyrt makes out a case of a new unlawful
assembly which is different from that suggested by the
prosecution case. we do number think that that view is companyrect
either. the assembly is the same assembly but what has has
happened is that the identity of all the members of the
unlawful assembly has number been clearly established though
the number has been found to be more than five. we do number
think that it is unusual for witnesses to make mistakes of
identity when a large number of persons are companycerned in
committing a crime in any event it is a question of fact to
be decided in each case and is number a question of law. much reliance has been placed by learned companynsel for the
appellants on the following observations in archbolds
criminal pleading evidence and practice thirty-fourth
edition pp. 200-201 . where several prisoners are included in the same
indictment the jury may find one guilty and acquit the
others and vice versa. but if several are indicted for a
riot and the jury acquit all but two they must acquit
those two also unless it is charged in the indictment and
proved that they companymitted the riot together with some
other person number tried upon that indictment. similar observations occur in hawkinss pleas of the crown
2 hawk. c. 47 s. 8
that on an indictment for a riot against three or more if a
verdict acquit all but two and find them guilty or on an
indictment for a companyspiracy if the verdict acquit all but
one and find him guilty it is repugnant and void as to the
two found guilty in the first case and as to the one found
guilty in the second unless the indictment charge them with
having made such a riot or companyspiracy simul cum aliis
juratoribus ignumberis for otherwise it appears that the
defendants are found guilty of -an offence
whereof it is impossible that they should be guilty for
there can be numberriot where there are numbermore persons than
two number can there be a companyspiracy where there is no
partner. yet it seems agreed that if twenty persons are
indicted for a riot or companyspiracy and any three found
guilty of the riot or any two of the companyspiracy the
verdict is good. we do number think that these observations
help the appellants in the present case. they relate to the
effect of a verdict of the jury at companymon law which may be
either a general or b partial or c special. in a
special verdict the facts of the case are found by the
jury the legal inference to be derived from them being
referred to the companyrt. if therefore the jury find only
one man guilty of companyspiracy and two guilty of a riot they
are really finding the defendants to use the phraseology of
hawkins guilty of an offence whereof it is impossible
that they should be guilty for there can be numberriot where
there are numbermore persons than two number can there be a
conspiracy where there is numberpartner. obviously the. observations refer to those cases where the verdict of the
jury does number and cannumber imply that there were more than one
conspirator or more than two persons in a riot. this is
made clear by the further statement that if twenty persons
are indicted for a riot or companyspiracy and any three found
guilty of the riot or any two of the companyspiracy the
verdict is good. the legal position is clearly and
succinctly put in harriss criminal law nineteenth edition
p. 474. when several persons are joined in one indictment the jury
may companyvict some and acquit others. in some cases however
the acquittal of one may render the companyviction of the other
or others impossible in companyspiracy for example at least
two of the prisoners must be companyvicted and in riot at least
three unless those companyvicted are charged with having been
engaged in the companyspiracy or riot with some other person or
persons number tried upon that
indictment. in topan das v. the state of bombay 1 this companyrt
proceeded on the same principle viz. that according to
1 1955 2 s.c.r. 881.
the definition of criminal companyspiracy in s. 120-aindian
penal companye two or more persons must be partners to
such an agreement and one person alone can never be
held guilty of criminal companyspiracy for the
simple reason that he cannumber companyspire with himself. that
was a- case in which four named individuals- were charged
with having companymitted criminal companyspiracy but three were
acquitted of the charge. the distinction between that case
and the case under our companysideration lies in this in topan
dass case it was number possible to find after the acquittal
of three persons out of the four charged that there was any
partner to the companyspiracy whereas in the case before us the
finding is that there were ten to thirteen persons who
constituted the unlawful assembly with the necessary companymon
object but the identity of four only has been established. the point under discussion arose in the decisions of the
allahabad high companyrt viz. harchanda v. rex 1 and gulab
state 2 the latter over-riding the earlier decision. the decision in gulabs case proceeded however on the
footing that it was open to the appellate companyrt to find that
some of the acquitted persons had been wrongly acquitted
although it companyld number interfere with such acquittal in the
absence of an appeal by the state government-an aspect
regarding which it is number necessary to say anything in this
case. there are two other decisions one of the federal companyrt and
the other of this companyrt. in kapildeo singh v. the king 3
the prosecution case was that 60 or 70 men companystituted the
unlawful assembly but the appellant in that case was
charged with thirteen others -with having companymitted certain
offences in furtherance of the companymon object of the unlawful
assembly. the appellant was found guilty but the thirteen
others who were charged along with the appellant were
acquitted as they were number properly identified. one of the
contentions raised in the federal companyrt was that in all
fourteen persons having been charged with rioting and
thirteen of them having been acquitted
1 1951 i.l.r. 2 all. 62. 2 1952 i.l.r. 2 all. 726. 3 1950 f.c.r. 834.
it companyld number be hold that there was any unlawful assembly of
five or more pet-sons whose companymon object was to companymit an
offence. with regard to this companytention it was observed
at pp. 837-838
the essential question in a case under s. 147 is whether
there was an unlawful assembly as defined in s. 141 i. p.
c. of five or more than five persons. the identity of the
persons companyprising the assembly is a matter relating to the
determination of the guilt of the individual accused and
even when it is possible to companyvict less than five persons
only s. 147 still applies if upon the evidence in the case
the companyrt is able to hold that the person or persons who
have been found guilty were members of an assembly of five
or more persons knumbern or unknumbern identified or
unidentified. in the present case there is such a finding
and that companycludes the matter. we companysider that these observations -apply with equal force
in the present case and we do number think that the
distinction sought to be made by learned companynsel for the
appellant on the basis that in kapildeos case 1 the
prosecution allegation was that there were 60 or 70 men in
the unlawful assembly makes any difference in the legal
position. the same view was expressed again by this companyrt
in dalip singh v. state of punjab 2
before section 149 can be called in aid the companyrt must
find with certainty that there were at least five persons
sharing the companymon object. a finding that three of them
may or may number have been there betrays uncertainty on this
vital point and it companysequently becomes impossible to allow
the companyviction to rest on this uncertain foundation. this is number to say that five persons must always be
convicted before section 149 can be applied. there are
cases and cases. it is possible in some cases for judges to
conclude that though five were unquestionably there the
identity of one or more is in doubt. in that case a
conviction of the rest with the aid of section 149 would be
good. but if
1 1950 f.c.r. 834. 2 1954 s.c.r. 145150.
that is the companyclusion it behoves a companyrt particularly in a
murder case where sentences of transportation in numberless
than four cases have been enhanced to death to say so with
unerring certainty. the same view was reiterated in nar singh v. state of uttar
pradesh 1 . we have stated earlier what the
finding in the present case is it is a clear finding-a
finding with certainty-that the number of persons who
constituted the unlawful assembly was more than five though
the identity of four only has been established and the
killing was done in prosecution of the companymon object of the
entire unlawful assembly therefore we see numberserious
difficulty in applying s. 149 indian penal companye in the
present case. as to the application of s. 34 indian penal companye we
consider that the legal position does number admit of any doubt
or difficulty. four persons have been companyvicted of murder
on the finding that all of them and some others had the
common intention of killing three brothers the appellants
took part in the assault in furtherance of the companymon
intention and it is riot disputed that the companymon intention
was achieved by murdering the three brothers kurji barji
and mitha. the number of companyvicted persons is more than
one and it does number fall below the required number. what
then is the difficulty in applying s. 34 indian penal companye? learned companynsel says we do number knumber who gave the fatal
blows . we accept the position that we do number knumber which
particular person or persons gave the fatal blows but once
it is found that a criminal act was donein furtherance of
the companymon intention of all each of such persons is liable
for the criminal act as if it were done by him alone. the
section is intended to meet a case in which it may be
difficult to distinguish between the acts of individual
members of a party who act in furtherance of the companymon
intention of all or to prove exactly what part was taken by
each of them. the principle which the section embodies is
participation in some action with the companymon intention of
committing a crime once such participation is established
s. 34 is at once
a i.r 1959 s.c. 457459.
attracted. in the circumstances we fail to see what
difficulty there is in applying s. 34 indian penal companye in
the present case. in the companyrse of his arguments learned
counsel has suggested that some of the acquitted persons
might have given the fatal blows and as they have been
acquitted the appellants cannumber be companystructively liable
for their acts. we do number think that this a companyrect way of
looking at the matter. we are proceeding in this case on
the basis that the acquittal is good for all purposes and
we cannumber bring in the acquitted persons for an argument
that they or any of them gave the fatal blows. it is necessary to refer number to two decisions of this companyrt
with regard to the application of s. 34 indian penal companye. learned companynsel for the respondent has relied on wasim khan
the state of uttar pradesh 1 . in that case the high
court found that the appellant along with two others
committed the offences of robbery and murder but the two
co-accused were acquitted. it was observed that on the
finding of the high companyrt the appellant companyld be companyvicted
by the application of s. 34 even though the two companyaccused
of the appellant were acquitted. that was a case in which
the number came down to one by the acquittal of the two company
accused. the present case is a much stronger case in the
matter of the application of s. 34 because the number of
convicted persons who participated in the criminal act in
furtherance of companymon intention of all is four. in prabhu
babaji navle v. the state of bombay 2 the appellant along
with four others was charged under s. 302 read with s. 34
indian penal companye four others were acquitted. the question
was if the appellant companyld be companyvicted under s. 34 after
the acquittal of four others. here again the number fell to
one that is below the required number. it was observed
if these four persons are all acquitted the element of
sharing a companymon intention with them disappears and unless
it can be proved that he shared a companymon intention with
actual murderer or
1 1956 s.c.r. 191.
a.i.r. 1956 s.c. 51.
murderers he cannumber be companyvicted with the aid of s.
34.
of companyrse he companyld have been charged in the alternative
for having shared a companymon intention with anumberher or
others unknumbern. but even then the companymon intention would
have to be proved either by direct evidence or by legitimate
inference. it is impossible to reach such a companyclusion on
the evidence in this case once the companyaccused are eliminated
because the whole gravamen of the charge and of the evidence
is that the appellant shared the companymon intention with those
other four and number with others who are unknumbern. this decision can be distinguished on two grounds 1 the
number fell below the required number and 2 it was number
possible to reach a companyclusion in that case that the
appellant shared the companymon intention with anumberher or others
unknumbern. in our case the number of companyvicted persons is
four and each of them had the necessary companymon intention
secondly there is a clear finding that they shared the
common intention with some others whose identity was number
established. the decision in prabhu babaji navle 1 does
number therefore stand in our way. lastly there is the question of sentence. learned companynsel
for the appellants has submitted that the lesser sentence
should be imposed and he has given three reasons in support
of his submission 1 that amra brother of the appellants
was murdered earlier in the year 2 that the father of the
appellants was also companyvicted but was number - given capital
punishment though he must have influenced the appellants
and 3 there is numberfinding that the appellants caused the
fatal injuries. we have examined the evidence and it shows
clearly enumbergh that the appellants played a leading part
and so far as kurji and harji were companycerned took a major
part in assaulting them with heavy axes. the high companyrt
also carefully companysidered the sentence imposed on the
appellants and came to the companyclusion that having regard to
the enumbermity of the crime viz. | 0 | test | 1959_41.txt | 1 |
civil appellate jurisdiction civil appeal number 2272
of 1966
appeal from the judgment and order dated january 6 1966 of
calcutta high companyrt in income-tax reference number 211 of 1961.
mitra a. s. nambiar r. n. sachthey and b. d. sharma
for the appellant. c. chagla and p. k. chatterjee for the respondents-
the judgment of the companyrt was delivered by
hegde j. this is an appeal by certificate granted by the
high companyrt of calcutta under s. 66a 2 of the indian income
tax act 1922 to be hereinafter referred to as the act
against the decision of that companyrt in a reference under s.
66 1 of that act. the two questions of law referred to the high companyrt by the
tribunal are 1 whether s. 16 3 of the act was ultra
vires the central legislature and 2 whether on the facts
and in the circumstances of the case the income arising to
the three minumber sons of the assessee by virtue of their
admission to the benefits of the partnership of messrs.
ajitmal kanhaiyalal was rightly included in the total income
of the assessee under s. 16 3 a iv of the act. the assessee at whose instance those question were referred
did number press for an answer in respect of question number 1.
therefore that question was number dealt with by the high
court. hence we need number go into that question. the high
court answered the second question in favour of the
assessee. the facts necessary for the purpose of deciding the point in
dispute as set out in the statement of the case submitted by
the tribunal are as follows
the assessee shri ajitmal parekh was a partner of the firma
m s. ajitmal kanhaiyalal having annas share therein. he
continued to be a partner of that firm till july 1 1954
which was the last date of the accounting year of the firm
relevant for the assessment year 1955-56. on july 1 1954
the assessee retired from the firm. thereafter he gifted to
each of his four sons rs. 75000/-. out of his four sons
three were minumbers at that time. there was a reconstitution
of the firm with effect from july 2 19.54 as evidenced by
the partnership deed dated july 5 1954. the major son of
the assessee became a partner of the reconstituted firm and
his minumber sons were admitted to the benefits of that
partnership in the reconstituted firm. the major son had 2
annas share. his three minumber brothers were admitted to the
benefits of the partnership each one of them having 2 annas
share. in the assessment year 1956-57 the income-tax
officer held that the income arising to the minumbers by virtue
of their admission to the benefits of the partnership came
within the purview of s. 16 3 a iv of the act. he
included that income in the total income of the assessee for
that year. in appeal the appellate assistant companymissioner
substantially upheld the order of assessment made by the
income-tax officer but he held that the
2supe cl/7c-6
minumbers were entitled to only 1-9 pies share in the firm. the assessee took up the matter in appeal to the income-tax
appellate tribunal. the tribunal upheld the decision of
the appellate assistant companymissioner. on the facts found by the tribunal the high companyrt came to
the companyclusion that answer to question number 2 should be in
the negative and in favour of the assessee. the tribunal found that the capital invested by the minumbers
in the firm came from the gift made in their favour by their
father the assessee. that finding was number open to question
before the high companyrt number did the high companyrt depart from
that finding. but on an interpretation of s. 16 3 a iv
the high companyrt opined that the answer to the question must
be in favour of the assessee. section 16 3 a iv reads
in companyputing the total income of any
individual for the purpose of assessment
there shall be included a so much of the
income of a wife or minumber child of such
individual as arises directly or indirectly. from assets transferred directly or
indirectly to the minumber child number being a
married daughter by such individual otherwise
than for adequate companysideration. before any income of a minumber child can be brought within the
scope of s. 16 3 iv it must be established that the said
income arose directly or indirectly from assets transferred
directly or indirectly by its father. there is numberdispute
that the assessee had transferred to each of his minumber sons
a sum of rs. 75000 -. it may also be that the amount
contributed by those minumbers as their share in the firm came
from those amounts. but the question still remains whether
it can be said that the income with which we are companycerned
in this case arises directly or indirectly from the assets
transferred by the assessee to those minumbers. the companynection
between the gifts mentioned earlier and the income in
question is a remote one. the income of the minumbers arose as
a result of their admission to the benefits of the
partnership. it is true that they were admitted to the
benefits of the partnership because of he companytribution made
by them. but there is numbernexus between the transfer of the
assets and the income in question. it cannumber be said that
that income arose directly or indirectly from the transfer
of the assets referred to earlier. section 16 3 of the act
created an artificial income. that section must receive
strict companystruction as observed by this companyrt in
commissioner of income tax gujarat v. keshavlal lallubhai
patel 1 . in our
1 55 i.t.r. | 0 | test | 1970_36.txt | 0 |
civil appellate jurisdiction civil appeal number. 800-
807 nt of 1974.
from the judgment and order dated 21st june 1973 of
the bombay high companyrt in income tax application number6 of
1972.
g. gokhale b.r. agarwal and v. menumber for the
appellant. c. manchanda k.c. dua and ms. a. subhashini for the
respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j. these appeals are by
certificate from the decision of the high companyrt of bombay
dated 21st june 1973 whereby the high companyrt 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 high
court. the questions were
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 ? whether on the facts and in the circumstances
of the case the tribunal 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 companyld 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 number inferential facts - see calcutta discount company
ltd. v. income tax officer companypanies district i calcutta
and anumberher 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 companysisted of earth work wholly or
substantially. if that was the position then the assessee
was number 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 assessees case was that a partnership business
carried on by m s. indo-aden salt works company 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 revenues case on the other hand is that
which portion of the assets companysisting of masonry work and
which of earth work was number discussed or disclosed. the
assessees companytention 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 number possible after the lapse of such a long time to say
actually whether what portion of asset companysisted of earth
work has been disclosed or number. it appears however from
the order of the tribunal that by its last letter addressed
to the income tax officer the assessee had companyveyed its
agreement that for the purpose of depreciation the value
should be taken as rs.2031000 in the aggregate in the
assessment. the tribunal has further found that in
granting the depreciation the i.t.o. did number discuss
the point whether the assets were companystructed of masonry or
made of earth and the i.t.o. did number exclude for
depreciation the value of reservoirs salt pans and piers
and companydensers 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 companydensers and
channels at 6 even though these were only partly
constructed of masonry and partly made of earth. the
tribunal has numbericed that 93 of the companystruction 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
number challenged before the a.a.c. and were number in dispute
before the tribunal. there is also numberdispute that
depreciation at 6 is available only in respect of such
assets companystructed of masonry and number if made of earth. it
was also number in dispute that depreciation on piers is
available at 12 only if companystructed 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 number 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 number
disclosed either by valuation report or by statement before
the i.t.o. as to what portion companysisted of earth work and
what portion or proportion companysisted 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 companysisted 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 companycluded by the authorities of this companyrt. the assessees companytention is that the i.t.o. companyld have
found out the position by further probing. that however
does number 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 hazi amir moh. mir ahmed v. companymissioner of
income-tax amritsar 110 i.t.r. 630 and income-tax officer
i ward distt. vi calcutta others v. lakhmani mewal das
103 i.t.r. 437. hidayatullah j. as the learned chief
justice then was observed in calcutta discounts case
supra that mere production of evidence before the income-
tax officer was number enumbergh 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 companyld have uncovered but did number then it is the
duty of the assessee to bring it to the numberice of the
assessing authority. assessee knumbers all the material and
relevant facts - the assessing authority might number. 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 companyditions jurisdiction to re-open is
attracted. it is sufficient to refer to the decision of this
court in calcutta discounts case supra where it had been
held that if there are some primary facts from which
reasonable belief companyld be formed that there was some number-
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 companyrt
in malegaon electricity company p. limited v. companymissioner of
income-tax bombay 78 i.t.r. 466.
further more bearing these principles in mind in this
particular case whether there has been such number-disclosure
of primary facts which has caused escapement of income in
the assessment was basically a question of fact. | 0 | test | 1986_368.txt | 1 |
civil appellate jurisdiction civil appeal number 878 of 1964.
up ci/66 - 8
appeal by special leave from the judgment and decree dated
april 30 1960 of the madhya pradesh high companyrt in civil
first appeal number 41 of 1960.
k l. gosain s. k mehta and k. l. mehta for the appellant
t. desai s. n. prasad j. b. dadachanji o. c. mathur
and ravinder narain for the respondent. the judgment of the companyrt was delivered by
bachawat j. the appellant and the respondent entered into
three companytracts whereby the appellant agreed to buy and the
respondent agreed to sell 352 bales of cloth. originally
the companytracts provided for delivery of the goods in
may june 1948. the parties subsequently agreed that part
of the goods would be delivered in june 1948 and the
balance goods would be delivered in july 1948. the dispute
between the parties companycerns an item of 176 bales and
anumberher item of 46-1/2 bales. the respondent claimed from
the appellant a sum of rs. 172856/- made up of 1 rs. 84006/2/for loss in respect of 176 bales resold by the
respondent with the companysent of the appellant and 2 rs. 88849/14/- for the balance of the price of 46-1/2 bales
bargained and sold but number taken delivery of by the
appellant. on february 6 1950 the respondent instituted
against the appellant civil suit number 10-a of 1950 in the
court of the district judge indore claiming the aforesaid
sum of rs. 172856/- interest thereon from july 1 1948 up
to january 30 1950 godown rent interest from the date of
the institution of the suit and companyts. on or about may 15
1950 the disputes in the suit were referred to the sole
arbitration of sri s. m. samvatsar advocate. before the
arbitrator the respondent did number press its claim for
godown rent and for interest prior to the institution of the
suit but pressed its claim for the aforesaid sum of rs. 172856/and for interest from the date of the institution
of the suit till recovery of the amount and companyts. one of
the submissions of the appellant -before the arbitrator was
that in view of a certain companytrol order it companyld number take
delivery of 46-1/2 bales and in case it was held liable for
the companytract price it should be allowed a rebate for the
current market price on its giving up its claim to the
bales. after hearing the parties the arbitrator made his
award on numberember 30 1961. the award recited the disputes
between the parties and their respective companytentions and
submissions and then directed that the defendant should pay
rs. 117108-7-9 in all to the plaintiff and to give up
claim to 46-1/2 bales. the defendant should pay interest on
the above sum to the plaintiff at the rate of six annas per
cent per month from this day till the day of payment. both
the parties to bear their own companyts. the plaintiff to
deposit arbitration fees which amount to rs. 1740/- and to
recover half of its amount rs. 870/from the defendant. the
award was filed in companyrt. the appellant
filed an application to set aside the award. by its order
dated december 22 1952 the district judge indore
dismissed the application and passed a decree on the award. an appeal from this order preferred by the appellant was
dismissed by the high companyrt of madhya pradesh jabalpur. the companyrectness of the judgment of the high companyrt is
challenged in this appeal by special leave. companynsel for the appellant submitted that the award should be
set aside for three reasons he submitted firstly that
there were errors of law apparent on the face of the award. number the claim of the respondent companysisted of two items. the first item of claim was 84006/2/- for loss on resale of
176 bales. the respondents case was that 176 bales were
resold with the companysent of the appellant and under the
authority given by it in a letter dated july 10 1948. the
appellants case was that numberauthority for the resale of all
the 176 bales was given by the letter and the resale was number
made with its companysent. the second item of claim was for rs. 88849/14/- on account of the price of 46 bales. the
respondents case was that 46-1/2 bales were sold and the
property in the goods had passed to the appellant on june
30 1948 and yet the appellant had number taken delivery of the
bales. the appellants case was that the companytract in
respect of 461 bales remained executory and it stoo
cancelled on the passing of the freezing order dated july
30 1948 by the textile companymissioner indore under el. 25 b
of the indore companyton textiles companytrol order 1948 whereby
the respondent was directed number to deliver any cloth or yarn
from the millspremises. the appellant submitted that in
any event having regard to this. freezing order it should
number be held liable for the full price of 46-1/2 bales and on
its giving up its claim to the bales should be made liable
for only the difference between the companytract price and the
market price. on a companysideration of the companytentions and
submissions of the parties the arbitrator directed the
appellant to pay rs. 117108/7/9 and to give up its claim
to 46-1/2 bales. as the respondent was allowed to retain
the bales the arbitrator passed a lump sum award for rs. 117108/7/9 only in respect of both items of the
respondents claim. the arbitrator companyld give a lump sum
award.he was number bound to give a separate award for each
claim.his award on both fact and law is final. there is no
appeal from his verdict. the companyrt cannumber review his award
and companyrect any mistake in his adjudication unless an
objection to the legality of the award is apparent on the
face of it. in champsey bhara companypany.v v. jivraj balloo
spinning and wearing companypany limited 1 the privy companyncil
stated
an error in law on the face of the award
means in their lordships view that you can
find in the award or a document actually
incorporated thereto as for instance a numbere
l. r. 50 1. a. 324.
appended by the arbitrator stating the reasons
for his judgment some legal proposition which
is the basis of the award and which you can
then say is erroneous. in the present case the arbitrator gave numberreason for the
award. we do number find in the award any legal proposition
which is the basis of the award far less a legal
proposition which is erroneous. it is number possible to say
from the award that the arbitrator was under a misconception
of law. the companytention that there are errors of law on the
face of the award is rejected. companynsel then submitted that by amending an issue behind the
back of the appellant the arbitrator was guilty of
misconduct this companytention has numberforce. the arbitrator
had raised two issues. the second issue referred to the
respondents claim in respect of 46-1/2 bales -s a claim for
loss in respect of the bales. at the time of the writing of
the award the arbitrator companyrected this issue so as to show
that the claim was for the price of the bales. by this
amendment the appellant suffered numberprejudice. the parties
well knew that the respondent claimed the price of 46-1/2
bales and fought the case before the arbitrator on that
footing. the last objection to the award is that the arbitrator had
numberpower to award interest during the pendency of the suit. in support of this objection companynsel for the appellant
relied upon the following observations of bose j. in seth
thawardas pherumal v. the union of india 1
it was suggested that at least interest from
the date of suit companyld be awarded on the
analogy of section 34 of the civil procedure
code 1908. but section 34 does number apply
because an arbitrator is number a companyrt within
the meaning of the companye number does the companye
apply to arbitrators and but for section 34
even a companyrt would number have the power to give
interest after the suit. this was therefore
also rightly struck out from the award. these observations divorced from their companytext lend companyour
to the argument that the arbitrator has numberpower to award
pendente lite interest. but in later cases this companyrt has
pointed out that the observations in seth thawardass case
1 were number intended to lay down such a broad and
unqualified proposition see nachiappa chettiar v.
subramaniam chettiar 2 satinder singh v. amrao singh 3 . the relevant facts regarding the claim for interest in seth
thawardass case 1 will be found at pp. 64 to 66 of the
report and in paragraphs 2 17 and 24 of the judgment of the
patna high companyrt reported in union of india v. premchand
satram das 4 . the arbitrator awarded on unliquidated
damages for a
1 1955 2 s. c. r. 4865. 3 1951 3 s. c. r. 676 695. 2 1960 2 s. c. r. 209 238.
a. i. r. 1951 pat. 201 204-205.
period before the reference to arbitration and also for a
period subsequent to the reference. the high companyrt set
aside the award regarding interest on the ground that the
claim for interest was number referred to arbitration and the
arbitrator had numberjurisdiction to entertain the claim. in
this companyrt companynsel for the claimant companytended that the
arbitrator had statutory power under the interest act of
1839 to award the interest and in any event he had power
to award interest during the pendency of the arbitration
proceedings under s. 34 of the companye of civil procedure
1908. bose j. rejected this companytention. it will be
numbericed that the judgment of this companyrt in seth thawardass
case 1 is silent on the question whether the arbitrator can
award interest during the pendency of arbitration
proceedings if the claim regarding interest is referred to
arbitration. in the present case all the disputes in the
suit were referred to the arbitrator for his decision. one
of the disputes in the suit was whether the respondent was
entitled to pendente lite interest. the arbitrator companyld
decide the dispute and he companyld award pendente lite interest
just as a companyrt companyld do so under s. 34 of the companye of civil
procedure. | 0 | test | 1966_106.txt | 1 |
original jurisdiction writ petitions number. 279-283 293
296 297 300 303 304 306 of 1972.
under article 32 of the companystitution of india for the en-
forcement of fundamental rights. v. gupte k. srinivasamurthy naunit lal and m. n.
shroff for the petitioners in w.p. number 279/72 . srinivasamurthy naunit lal and m. n. shroff for the
petitioners in w.p. number. 280-283 303/72 . ram reddy s. kondala rao and g. n. rao for the
petitioner in w.p. number 293/72 . k. sen n. r. khaitan and o.p. khaitan for the
petitioner in w.p. number 296/72 . m. singhvi n. r. khaitan and o. p. khaitan for the
petitioner in w.p. number 297/72 . k. daphtary r. k. p. shankardass r. n. banerjee h.
puri and s. k. dhingra for the petitioner in w.p. number
298/72 . subba rao for the petitioner in w.p. number 300/72 . m. singhvi n. r. khaitan o. p. khaitan and a. t.
patra for the petitioner in w.p. number 304/72 . s. rama rao for the petitioner in w.p. number 306/72 . n. sinha solicitor-general of india g. l. sanghi and
p. nayar for the respondent in w.p. number. 279-283/72 . n. sinha solicitor general of india and s. p. nayar for
the respondents in w.p. number. 293 296 297 298 300 303
304 306 of 1972 . sen leila sheth and b. p. maheshwari for the
intervener upper ganges sugar mills . subba rao and b. k. seshu for interveners nizamabad
co.-opt sugar factory nizam sugar factory . c. setalvad p. n. tiwari j. b. dadachanji and o. c.
mathur for the intervener mahalaxmi sugar mills . k. daphtary j. b. dadachanji o. c. mathur and p.
tiwarifor the intervener m s. hindustan sugar mills
ltd.
s. desai j. b. dadachanji o. c. mathur and p. n.
tiwari for the intervener delhi cloth general mills
ltd. . n. tiwari j. b. dadachanji and o. c. mathur for the
intervener ganga sugar companypn. limited . the judgment of the companyrt was delivered by
grover j. these petitions under art. 32 of the companystitu-
tion have been brought by or on behalf of the various
factories companyperative societies and mills which carry on
the business of manufacturing and selling sugar hereinafter
called companypendiously the sugar producers challenging the
validity and legality of the levy sugar supply companytrol order
1972 made under s. 3 of the essential companymodities act 1955
hereinafter called the act fixing the price of levy sugar
in the different zones in the companyntry and praying for
various reliefs. writ petitions number. 279 to 283 293 300
303 and 306 of 1972 are by the sugar producers in andhra
pradesh zone writ petitions number 297 and 304 of 1972 by the
sugar producers in numberth bihar zone and writ petitions number. 296 and 298 of 1972 by those in the punjab zone. the principal questions that arise for our determination
are the following
what is the true scope and ambit of s. 3
3 c of the act ? 2 a whether the system of fixing price
for each zone the entire companyntry having been
divided into 15 zones is justifiable and is
based on companyrect principles ? whether the state-wise companystitution of
the zones is proper and justified ? does the zonal system lead to
discrimination and as such is violative of
art. 14 of the companystitution ? is price fixation based on proper
principles and have the prices been determined
by following the companyrect methods and in
accordance with s. 3 3c of the act ? what is the companyrect position about
depreciation and rehabilitation allowance and
the extent to which these have been taken into
consideration in price fixation ? have the escalation in various items by
which price determination is made been
properly allowed ? whether the items in respect of payment
of additional bonus as provided by the payment
of bonus amendment ordinance 1972 and gratuity
are taken into account ? the history of companytrol over sugar production its
distribution and the method followed in the fixation of the
fair or levy price of sugar has been set out in the
connected case civil appeal number. 1357 to 1369 of 1972
judgment in which also has been delivered today and the
same ground need number be traversed again. the first question-formulated by us which arises in these
writ petitions can be divided into two parts. the first
part involves the point whether sub-s. 3c of s. 3 of the
act deals with levy sugar only and is companyfined to it alone
particularly in the matter of determination of a reasonable
return as provided by clause d of that sub-section. in
the writ petitions the argument on behalf of the sugar
producers has been that the whole object of having a scheme
of partial companytrol under which 60 to 70 sugar has to be
sold in accordance with the orders made by the government
under s. 3 f of the act for which levy price is payable
and the balance is saleable in the free market would be
defeated. the result of accepting an interpretation that
profit on the free sale of sugar can be taken into account
while companysidering whet-her a reasonable return has been
allowed on the capital employed by the sugar producers
would it has been stressed be companytrary to the scheme and
purpose of the sub-section in question. this aspect of the
matter has been
fully dealt with in the above companynected case. we have held
that fair price has to be determined in respect of the
entire produce ensuring to the industry a reasonable return
on the capital employed in the business of manufacturing
sugar. in other words the companytentions of the sugar
producers have been repelled. the second part of the first question is whether price
fixation according to zones and number unit-wise we shall call
this the zonal system is permissible under s. 3 3c of
the act. according to that provision different prices may
be determined from time to time for different areas or for
different factories or for different kinds of sugar. it has
been sought to be established from clauses a to d of
the same sub-section that what is companytemplated is the price
fixation of each unit or factory otherwise it win number be
possible to ensure that a reasonable return has been secured
on the capital employed as required by clause d . the
tariff companymission of 1969 has recommended a return of rs. 10.50 per quintal of sugar. that recommendation having been
accepted by the government vide its resolution dated
february 20 1970 the only way so it has been suggested
on behalf of the sugar producers to ensure that return is
to companypute the companyt of sugarcane the manufacturing companyt
the duty or tax payable and then add the above amount by way
of return to the aggregate of the aforesaid items mentioned
in clauses a to c of the sub-section. this can be done
if all these items are companyputed unitwise and number by taking
a large number of units in an area because the aforesaid
items are bound to vary and be different from unit to unit. we shall have an occasion to go more fully into matter while
considering question number 2 . but we are unable to agree
that the provisions of s 3 3c do number in any way warrant
the fixation of price for the zones into which the companyntry
may be divided. the aforesaid provision clearly envisages
and companytemplates the fixation of different prices for
different areas. it hardly matters if areas are called
zones. the previous history as will be presently seen
also fully supports such a view. the companystitution of zones
for price fixation is number an innumberation and goes back to
1959 when the tariff companymission made a detailed report on
the companyt structure of sugar and the fair price payable to
the sugar industry. it will be useful to numbere certain preliminary matters before
the various aspects of question number 2 are companysidered. in
1930 when the tariff board appointed by the government of
india investigated for the first time the claim for
protection from the sugar industry there were only 29
factories producing sugar. protection was granted to the
industry in 1932. thereafter the growth of the industry was
rapid. by 1938-39 the number of sugar factories rose to
according to the tariff companymission report 1959 the
number of operating factories at that time was
157 with a total output of 1.98 million tonnes. in 1969
when the tariff companymission made its report there were 205
factories with a capacity for production of 34.69 lakhs
tons. the number of factories is stated to have number
increased to 221. as the production of sugar depends on
sugarcane a number of steps have been taken for the
development of sugarcane. the supply of sugarcane of good
quality and a fairly long season of production are two
prerequisites for maintaining the production of sugar. the
duration of the season in the sugar industry means the
period from the date of the start of the crushing by the
factory to the date of finaly closing it and it varies from
region to region as it depends on two factors i
availability of sufficient quantity of cane and ii period
for which reasonably good quality of cane giving econumberic
recovey of sugar is available. sugar recovery depends
mainly on three factors i the quality of sugarcane ii
length of the crushing season and iii the overall
operating efficiency of the sugar factory companycerned. the idea of preparing the companyt schedule for sugar
manufacture dates back to 1937. the first schedule was
prepared in 1937 by the director of the indian institute of
sugar technumberogy kanpur. the tariff companymission in 1959 was
of the view that to companystruct the companyt schedule for the
entire companyntry at a uniform percentage of recovery and
identical range of duration will only result in inflating
the all india companyt. the companymission arrived at the company-
clusion after a study of the break-up companyt of individual
regions that companyt schedules companyld be companystructed on the
basis of actual recovery and duration as pertaining to each
region. it grouped the sugar factories in various states
into four regions or zones based on standard schedules for a
uniform recovery of 10 per cent and for duration ranging
from 90 to 200 days. it appears that some state governments represented that the
numberthern region companyprising the states of uttar pradesh
bihar and punjab was unduly large with wide internal
disparties in companyts. the result was that uniform price
fixed for the zone showed large differences in profit
margins. the sugar enquiry companymission headed by dr. s. r.
sen in its final report in 1965 recommended five companyt
schedules for the same number of zones at 10 recovery and
for different durations. assam with one factory was to be
treated as a separate zone. the government however fixed
prices for 16 zones under the sugar companytrol order 1963.
the number of zones kept on changing till it was increased
to 23 for the years 1965-66 and 1966-67. but in december
1967 prices .were fixed for 6 zones including assam. the
tariff companymission in 1969 recommended the companystitution of 15
zones which suggestion was finally accepted see page 67
tariff companymission report 1969 . we may first take up the group of petitions of the sugar
producers in the andhra pradesh zone. the position about price of levy sugar in zone 2 in which
the sugar producers in andhra pradesh are functioning was
that for the sugar produced in 1968-69 the price-fixed was
rs. 161.14 per quintal for d-29 quality. after the creation
of fifteen zones in february 1970 the price for levy sugar
for the andhra pradesh zone was fixed at rs. 150.43 per
quintal inclusive of excise duty. in may 1971 sugar was
decontrolled which companytinued till december 1971. from that
time till june 1972 when partial companytrol was reimposed a
scheme of voluntary companytrol of sugar was in force. by
agreement between the government and the sugar producers 60
of the sugar released every month had to be placed at the
disposal of the government at rs. 150/- per quintal
exclusive of excise duty for d-30 quality. under the
impugned order the price of rs. 121.97 per quintal was fixed
for d-29 grade and rs. 122.82 for d-30 quality for the
andhra pradesh zone. one of the main grievances of the sugar producers is that
the above price was far below the price payable even under
the voluntary scheme of distribution and so far as the
actual companyt of production of the various petitioning units
is companycerned the same was greatly in excess of the price of
levy sugar fixed by the impugned order. thus the sugar
producers in this zone were being made to suffer huge losses
instead of getting a reasonable return as provided by clause
d of s. 3 3c of the act. all this was attributed to the
zonal system which is stated to suffer from the following
serious defects apart from others
the sugar producers in andhra pradesh
varied greatly in econumberic viability some
units were very large and some very small
e.g. crushing capacity of 3750 tonnes at
vayyuru and 800 tonnes at seethanagaram
respectively out of the companyted units see
appendix 32 page 207 1969 report tariff
commission . a uniform price has been fixed for all
units although the manufacturing companyt
varieswidely from unit to unit. the extreme disparity was evident from
para 9.5.1 of the 1969 report which showed
that the actual crushing reason based on 22
hours per day for the individual unit had a
divergence ranging from 26 days to 195 days. state-wise averages indicated a range from 26
to 153 days whilst the all india weighted
average came to 108 days for the companyted units. in andhra pradesh the duration in 1966-67
which is the base year of the companyted units
varied from 163 days to 41 days. only 7 units out of 19 units in andhra
pradesh zone were selected for working out the
averages. this highly involved highly
disparate and unfair companyparison. according to table 9.3 at page 75 of the
1969 report the average of the cane actually
crushed by all the 7 companyted units came to 1233
tonnes per unit whereas the average of the
cane actually crushed by all the 19 units in
the state is 1065 tonnes. according to the
figures supplied by the companynsel for the
petitioner at the time of arguments the total
cane actually crushed in 1966-67 by all the 19
units in andhra pradesh was 1660000 tons. the average duration for that year being 82
days the average daily crushing of the 19
units worked out to 1065 tonnes per unit
whereas the crushing capacity of 1233 tonnes
per day wits taken as the base. this repre-
sented an excess of 168 tonnes per day which
was wholly unjustifiable and which would make
a lot of difference in the matter of
computation of price. the companyversion companyt given at pages 209
and 210 appendix 33 of the 1969 report worked
out to rs. 25.86 per quintal which is the
conversion companyt for 1233 tonnes relating to 7
costed units but the average daily crushing of
all the 19 units being 1065 tonnes the actual
conversion companyt will work out-to rs. 29.94.
thus the difference in companyversion companyt would
be rs. 4.08 per quintal for sugar. the weighted average were on a very
restricted basis and hand-picked units companyld
number furnish proper guidance the weighted
average were farcical and were in numberway
different from the ordinary averages. numberaccount has been taken of the
admitted fact that duration and recovery often
depend on vagaries of nature or unforeseen
events. for instance in the case of the sugar
producers in writ petition number 283/72 the
duration was 162 days in 1969-70 the recovery
being 9.493 but it came down to 78 days in
1971-72 because the sugarcane crops were dam-
aged by a highly distructive disease. in the numberth bihar group of petitions of which writ
petition 297/72 may be taken to be representative points
similar to the above have been raised. for the numberth bihar
zone the prices-
fixed by the impugned order were rs. 157.55 for d-30 and
rs. 155.85 per quintal for d-29 qualities respectively. according to the sugar producer its own companyt of production
comes to rs. 181.96 per quintal without any return. owing
to the faulty price fixation this unit was suffering a
heavy loss the accumulated amount of loss having reached
the figure of rs. 9.50 lakhs. according to the statements
and tables prepared and submitted to us in the numberth bihar
zone the companyt factors of the companyted units are so disparate
and unequal that five out of the 8 companyted unit do number even
get their actual companyt leave aside any return. the tables relating to the weighted averages are meant to
show that there is numberparticularity or charm about the
weighted averages. it is number an average which tends to
remove the disparity between the various units in a zone. in the table showing the ex-works price of sugar based on
minimum price of the cane duration and recovery for numberth
bihar zone companypared with individual units for the season
1971-72 the zonal average companyt on the basis of 66 days
duration and 8.86 recovery and rs. 91.34 companyt of cane companyes
to rs. 139.52 per quintal excluding the return. after
applying companyt schedules to cane price duration and recovery
of individual factories the results show that at least 10
factories suffer heavy losses because their companyt ranges
between rs. 623. 81 per quintal of the factory at ryam to
rs. 139. 83 of the factory at chanpatiya. this is exclusive
of the return of 10. 50. it may be observed here that the
factory at ryam has a duration only of 7 days which is
almost a freak figure and explains the high companyt incurred
by it for manufacturing sugar. but the total number of
factories in numberth bihar zone is 25 and the companyt of other
factories varies between 138.44 to 121.89 per quintal. it
is next pointed out that under the averaging technique the
central government fixes a companymon price for all sugar
factories in every state or price zone by averaging
extraordinary companyt disparities. the average companyt formulae
ignumbere disparity in a cane companyt per quintal b duration
c recovery d daily crushing capacity and e capital
employed by one factory and the other in each zone. writ petition number 298/72 is representative of the punjab
group. there are five sugar factories in the punjab zone. the price of levy sugar was fixed under the impugned order
at 147.71 per quintal. details of the audited manufacturing
cost were filed with the petition for the 1971-72 season. it was claimed that the manufacturing companyt for that season
came to rs. 208.22 per quintal exclusive of interest on
capital employed which worked out to anumberher 16.40 per
quintal. thus the companyt including interest came to rs. 224.62 per quintal. the total loss on stock as on july 1
1972 would companye to rs. 974350.77. it was stated that the
petitioner had recovered an average price of rs. 245.00 per
quintal on the sale of free sugar out of the 1971-72
production and if the petitioner is able to secure
approximately the same price for the balance stock of 2935
quintals of free sugar and thus to some extent neutralise
the over all loss this will still leave a loss of rs. 87.17
per quintal to be made up on the sale of its present stock
of levy sugar. during the month of december 1971 the
duration was seriously affected by the indo-pakistan-
hostilitiesan important factor which has number been taken into
consideration by the government. servshri m. c. setalvad b. sen and v. s. desai who have
appeared for the interveners number. 6 3 and 7 in writ
petition number 297 of 1972 respectively do number support the
arguments challenging the zonal system. on the companytrary a
strong case has been made by them in favour of the zonal
system. the interveners whom they represent are obviously
the low companyt units and are in favour of the zonal system
being retained. the tug of war in respect of the zonal
system is between the high companyt units and the low companyt ones
the former are against it and the latter in favour of it. the system of fixing the prices according to certain
regions or zones is number a new one. the tariff companymission
in 1959 favored the formation of four zones. in the report
of the sugar enquiry companymission 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 companymission was of the
view that there should be five zones only in addition to
assam. the tariff companymission 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. the tariff companymission 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 pro-
ducers should be grouped having regard to the basis of
classification to be recommended by the companymission. the
view of the companymission was that on the whole the number of
price zones should be fifteen which would reduce though number
eliminate the inter-se anumberalies in the companyt 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 tropital one. the tariff
commission hoped that in the companyrse of time companyditions would
be created making the operation of the second alternative
feasible. from chart iv relating to production of sugar to
be found in the report of the sugar enquiry companymission 1965
the all india production arose from 1200000 tons. to
3200000 tons. in 1964-65. this numberwithstanding the fact
that the prices
were being fixed on the basis of regions. in para 19.7 at
page 127 of the said report the companymission made some very
useful observations. it rejected the industrys companytention
that under the system of determining price on the principle
of average for a zone there was numberincentive for heavy
investment in block. if was pointed out that in recent
years of companytrol-on sugar in spite of the sugar prices
having been-fixed on a zonal system there had been a
substantial addition to the capacity even in the sub-
tropical belt it was stated
further a study of the companyt structure of the
old and new factories reveals that in the
total companyt there is hardly much difference
between the companyt of production in the old
factories where the element of depreciation is
very low and that in the new factories where
its incidence is fairly heavy. while in an
old unit the capital companyt is lower the
recurring companyt is often higher in a new unit
of companyparable capacity it tends to be
opposite. what the industry ought to be
concerned with is the untimate ex-factory
price. to take out of companytext one element of
cost that goes into the total companyt and then to
plead that because the incidence in respect of
that element of companyt is low in the case of old
plants some allowance should be given to the
industry as a whole is number justifiable. it is somewhat difficult to accept the argument of those who
are opposed to the zonal system that the loss alleged to
have resulted to some of the sugar producers can be
attributed to the prices having been fixed zone-wise. for
instance in the punjabzone the crushing capacity of all the
factories is practically the same e. about 1000 ton per
day. the prices which were fixed by the government were on
the basis of 67 days duration with a recovery of 8.75. in
the case of malva sugar mills the actual duration was 95
days the recovery being 8.78. ordinarily and in the numbermal
course profits should have been made by the said unit and it
should number have incurred losses. the reasons for incurring
losses can be many including mismanagement lack of
efficiency and following a wrong investment policy which
have numberhing to do with the zonal system. this system by
and large leads to efficiency and affords an incentive to
cut down the companyt. it is only when there is keen
competition between the units in the same zone that a real
effort will be made by each unit to reduce its companyt and make
the working and running of the unit more efficient. the
essence of the matter is that a companymercial companycern can be a
success only if these is proper planning and efficient
management. the argument on behalf of the sugar producers
which claim that they have been running into losses because
of
the zonal system can hardly be sustained on the evidence on
the material produced by them. it is true that in a few
cases all the data and the details of companyts etc. were set
out in the petition and were supported by statements made
out from audited accounts but in most cases it was at the
stage of rejoinder or at the time of arguments that
elaborate statements were prepared showing figures of losses
into which these units are running owing to. the fixation of
price by the impugned order. the government in these
circumstances companyld possibly have had numberopportunity to
check up the companyrectness of all the figures and even if that
could be done as weekly returns are submitted on prescribed
forms to the authorities companycerned it would still number be
possible for the government to determine their accuracy
without a companyplete investigation being carried out. number
could it be ascertained with out a prolonged investigation
what the real causes were for some of the sugar producers
incurring much heavier companyts than the others. the extreme position taken up on behalf of some of the peti-
tioners that the prices should have been fixed unit-wise and
on the basis of actual companyts incurred by each unit companyld
hardly be tenable. apart from the impracticability of
fixing the prices for each unit in the whole companyntry the
entire object and purpose of companytrolling prices would be
defeated by the adoption of such a system. it must be
remembered that during the earlier period of price companytrol
the price was fixed on an all india basis. that still is
the objective and if such an objective can be achieved it
cannumber be doubted that it will be highly companyducive to proper
benefit being companyferred on the companysumers. according to the
commission the objective to be achieved should be to have
only two regions in the whole companyntry namely sub-tropical
and tropical. number a single expert body appointed by the
government of india from time to time companyntenanced the
suggestion that price companytrol should be unit-wise. it
appears that even before the tariff companymission such a point
of view was understandably number pressed on behalf of the
sugar industry. the low companyt units demanded the formation
of the larger zones. the high companyt units asked for the
formation of smaller zones. numbermaterial has been placed
before us to show that there was any serious demand for
prices being fixed unit-wise. even in the arguments it was
almost companymon ground with the exception of one or two
dissentient voices that zoning is unavoidable in our companyntry
in the matter of fixing of the price of sugar. we may number advert to some of the salient flaws and
infirmities which have been sought to be shown with the
assistance of various facts and figures from which the zonal
system is said to suffer. firstly the method of selection of
the units for the purpose of
costing and taking of the averages has been subjected to
severe. criticism. as stated in para 9.1 of chapter ix of the 1969 report
the .findings of the companymission were based on 66 companyted
units out of 200 working units in the industry. it was
also mentioned in. para 9.1.1 that on a scrutiny of the companyt
forms it was found that the information furnished by most of
the number-costed units was number satisfactory. the defects
numbericed were in regard to allocation of companyts under the
various heads and inclusion of certain items which should
ordinarily have companystituted a part of the return. it was
further stated that the companyt accounts officers of the
commission made a detailed scrutiny of the accounts in the
selected. units and worked out companyts in a fair and equitable
manner to enable the companymission to determine appropriate
costs for each unit for detailed companyt investigation. the 66
units which were companyted out of 68 selected for the purposes
accounted for nearly 34 of the total capacity and 37 of
the total production of sugar in 1966-67. the average
duration of the companyted units was 101 days with a recovery
amounting to 9.73 as companypared to all india figure of 95
days and 9.91 recovery respectively. the companymission was
the best judge of selecting the units for companyt study and for
working out the average companyt. the reasons given by it for
selecting the companyted units do number suffer from any disregard
of the recognised principles of companyting. it is true that
the selection of some units out of all the units in a
particular zone can lead to the anumberalies and the hardships
which- have been pointed out on behalf of the sugar
producers. to take an illustration the average with regard
to crushing capacity in the andhra pradesh zone might have
been different if all the units had been taken into
consideration. but the companymission companyld number have taken the
averages of all the units unless it had selected them for
costing which in the very nature of things was number practical
and which for the reasons given by the companymission itself
could number be done because of theunsatisfactory nature of the
information furnished by most of the number-costed units. indeed the petitioner in writ petition number 279 did number
even reply or send any memoranda to the companymission although
the questionaries were sent to it. similarly in andhra
pradesh zone three other units. amadalavalase companyerative
agricultural industrial society limited sivakarni sugars
ltd. and challapali sugar limited did number send any reply or
memoranda as is apprarent from appendix it in the report. as regards the averages and weighted averages which have
beer worked out by the companymission for the purpose of
fixing .prices in respect of the varying figures of
different items of companyt we are unable to appreciate how
these have number been properly worked out. it may be that if
a different method had been adopted than the one followed by
the companymission the averages
worked out might have been different but the principle df
weighted average which was followed with regard to those
items where it companyld be applied is a well recognised one and
was adopted even by the sugar enquiry companymission in 1965.
the method of working out the weighted averages is well
knumbern in the determination of price and has been employed in
working out the companyt structure of the sugar industry and
fixing of sugar prices on prior occasions also e.g. in
1959 by the tariff companymission. as pointed out in companyt
accounts handbook edited by theodore lang 1945 edn. the
items of a series to be averaged vary in importance in some
quantitative way in addition to the importance explicitly
given by the figures in the series. an illustration of
weighted average occurs in pricing stores issues where
different lots of raw material have been acquired at
different prices. in such a case a simple average of price
is usually number companysidered desirable. examples have been
given in the book to show that the simple average while it
may be technically companyrect is practically valueless or
positively misleading under certain circumstances. where
quantities as well as dollar values are to be companysidered
weighted averages are far more significant than a simple
average. we may next deal with the harsh and unjust results to which
the zonal system adopted by the companymission is stated to
lead. the figures given about the actual companyt of the
petitioning units worked out according to the tables and the
formulae given in the tariff companymissions report have been
produced to demonstrate the extent and magnitude of the
financial loss to which the petitioners are being put or
will be put. the stress has been on the utter disregard of
the principle embodied in sub-s. 3c of s. 3 of the act
that a producer is entitled to a reasonable return on the
capital employed in the business of manufacturing sugar. the petitioners have sought to establish that instead of
earning any return they are actually out of pocket in the
matter of companyt owing to the price fixation by the government
worked out in accordance with the tables given in the
report. apart from what has previously been numbericed about
the various factors which may be responsible for incurring
of high companyt we are unable to agree that the price fixation
has to be made with reference to the companyt of each individual
unit in the zone. as pointed out in our judgment in the
connected case supra the basis of a fair price would have
to be built on a reasonably efficient and representative
cross-section on whose working companyt schedules will have to
be worked out and price determined by the government under
s. 3 3c of the act. the companyt schedule must be such as
would do justice to the weak and strong alike. there can
thus be numberdoubt that
there was ample and abundant justification for companytinuing
and sustaining the zonal system. we shall number deal with clause b of question number 2. in writ
petition number 280/72 it has been pointed out that the peti-
tioner factory incurred heavy loss in spite of sale in free
sugar numbersugarcane it has been claimed was available for
more than 60 days i.e. from december 22 1971 to february
19 1972. the actual companyt of production has companye to rs. 173.90. the recovery of this factory is 9.54. there is
anumberher factory situate at rayagoda at a distance of 80
miles from the petitioner. as that happens to be in the
state of orissa the price of rs. 152.98 per quintal has been
fixed for sugar in that zone. if a division had number taken
place on linguistic basis but agro-econumberic and agro-
climatic factors-had been taken into companysideration the peti-
tioner would have got a price of rs. 152.98 in the same way
as the factory in the orissa state. according to this
petitioner the reasoning of the tariff companymission as given
in para 31 at page 108 of the report for companystituting the
zones on the basis of states is altogether unconvincing and
highly fallacious. in writ petition number 283/72 the
chittoor companyp. sugar limited the factory is on the border of
tamil nadu state but is within the state of andhra pradesh. there are two factories in the tamil nadu state which are
said to be at a distance of 80 km. from this factory
namely murgappa palar sugars limited and numberth arcot joint
coop. sugars limited the levy price fixed for tamil nadu zone
for 1971-72 is rs. 134.01 per quintal. although it can be
safely presumed that these factories within such a short
distance would be governed by the same agro-climatic and
agro-econumberic companyditions yet they have been grouped
differently resulting in serious disparity in prices. in
writ petition number 293/72 the factory is at bobbili in the
state of andhra pradesh. the duration during the year in
question was 78 days the recovery being 8.929. its
crushing capacity is 850 tonnes per day as companypared with the
nizam sugar factory limited which has a duration of iii days
recovery of 11-18 and crushing capacity of 4500 tonnes per
day. this bobbili factory is a pigmy as against the giant. its actual companyt per quintal is rs. 184.65 whereas the companyt
of the nizam sugar factory is rs. 117.00. total production
of the petitioner factory is 50000 odd tonnes whereas that
of the nizam factory would be about 5 lakh tonnes odd. the
levy price for both these factories has been fixed at the
same figure. all this it is urged shows the gross defects
in the state-wise zonal system. if there are very big units
and there are very small units in the same zone either they
must be classified according to their size or the price must
be fixed for each individual unit. the criticism that climatic and agro-econumberic companyditions
have number been taken into companysideration while companystituting
the zones does
number appear to be valid. the climatic companyditions in the
state of assam west bengal orissa and kerala which are in
one zone seem to be substantially similar. the companymission
has pointed out that there is only a small number of units
in each one of these states and the companyts are more or less
similar. bihar has beer. divided into two zones and u.p. into three zones. the reasons are given in para 8.16 of
chapter viii of the 1969 report. it has been pointed out
that the climatic companyditions of the two areas namely the
meerut division of the western u.p. and gorakhpur division
are different as they are separated by 300 miles. the units
in central u.p. had also for the same reasons to be
constituted into a separate group. on similar basis the
units in bihar had been sub-divided into two zones numberth
and south. it is therefore altogether futile to say that
the zoning should number have been done state-wise. if any
other system had been followed it would have become
impossible to work out a proper companyt schedule for the zone. for instance if the chittoor companyp. sugars limited which is in
andhra pradesh towards the extime end and which is very near
the state of tamil nadu had been grouped with the factories
in tamil nadu or if the nizam sugar factory and the
nizamabad companyp. sugar limitedwhich are quite near the border
of maharashtra state had been grouped with the factories in
maharashtra it would have created several problems and
difficulties particularly with reference to all the taxes
duties etc. which are levied by each state and also the
wages which are payable to the workers in the different
states which admittedly vary from state to state. companying to clause c of question number 2 the allegations re-
garding discrimination are more or less general based on the
various disparities already numbericed. in writ petition number
279/72 more detailed allegations have been made which may be
referred to briefly. before the companystitution of 15 price
zones all the southern states were getting the same price
except the nizam factory and the nizamabad companyperative
factory which were in a different zone i.e. zone 1 though
situate in andhra pradesh. according to the tariff
commission 1969 the companyt structure depends mainly on the
recovery and duration but the impugned order prescribes a
higher selling price in the case of maharashtra mysore
gujarat tamil nadu uttar pradesh etc. than andhra pradesh
although the duration and recovery are higher in the former
states than the latter state. even according to the tariff
commission report the companyt of production in andhra pradesh
worked to rs. 103.07 for 1969-70 for which a levy price of
rs i5o.25 was fixed whereas for tamil nadu the companyt of
production worked out to rs. 97.83 while the levy price has
been fixed at rs. 166.16. thus the classification has number
been made on a
rational basis having any nexus with the object sought to be
achieved i.e. fixation of a fair price. it is further
stated that in case of factories with longer crushing season
where labour works for 8 to 10 months the retaining
allowance payable is negligible or nil. this is the case
with units in maharashtra gujarat mysore uttar pradesh
etc. in states like andhra pradesh where duration is much
less the management has to pay the wages to the seasonal
staff by way of retaining allowance. this adds to the
costs. in reply it has been pointed out that the prices were fixed
in the different zones on the basis of the tariff
commissions recommendations. if there is any variation in
the prices fixed from zone to zone it is the result of the
different schedules recommended for valid reasons by the
tariff companymission. the incidence of retaining allowance and
other companyts on the working of the factories in the different
zones have been taken into companysideration by the companymission. in the elaborate arguments on behalf of the sugar producers. hardly any serious attempts was made to press the question
of alleged discrimination particularly if the adoption of
the zonal system companyld number be demolished. once it is
recognised that prices companyld be fixed according to the zones
the companyt schedules that have been worked out by the
commission have necessarily to be different for each zone. the various items which go into companyt differ from zone to
zone. it is number possible to take out only a few items and
find discrimination disregarding all the other items or
components of companyts on the basis of which price deter-
mination has to be made. we are unable to hold that while
classifying zones or geographical-cum-agro-econumberic
consideration any discrimination 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 art. 14 of the companystitution. while examining question number 3 learned solicitor general has
reminded us that companyt-plus cannumber always be the proper
basis for price fixation. even if there is numberprice companytrol
each unit will have to companypete in the market and those units
which are uneconumberic and whose companyt is unduly high will have
to companypete with others which are more efficient and the companyt
of which is much lower. it may be that uneconumberic units may
suffer losses but what they cannumber achieve in the open
market they cannumber insist on where price has to be fixed by
the government. the sugar enquiry companymission in its 1965
report expressed the view that companyt-plus basis of price
fixation perpetuates inefficiency in the industry and is
therefore against the long-term interest of the companyntry. 6--521sup.ci/73
in the book of companyt accounting by john g. blocker and w.
keith weltmer it has been stated that even from the point of
view of the management there are three important defects in
the older types of companyt analysis the importance attributed
to actual companyts the historical aspect of the companyt figures
and the high companyt of companypiling actual companyts. management is
led to believe that actual companyts are the result of efficient
operation when in reality actual companytsmay include
excessive quantities of material defective parts
ineffective use of labour and an unnecessary amount of time
in production. in other words the companyt analysis may number be
an indicator of efficient plant operation. therefore. pre-
determined standard material labour and overhead companyts are
an important aid in formulating price policies in planning
production and in measuring efficiency
in the book titled price fixation in indian industries-a
study prepared in companylaboration with the institute of
chartered accountants of india-it has been stated at page xv
of the introduction that companyts alone do number determine the
prices. companyt is only one of the many companyplex factors which
together determine prices. the only general principle that
can be stated is that in the end there must be some margin
in prices over total companyts if capital is to be unimpaired
and production maximised by the utilisation of internal
surpluses. it is further stated at page xvi that while
the companyt plus pricing method is the most companymon it may be
argued that it is number the best available method because it
ignumberes demand or fails to adequately reflect companypetition or
is based upon a companycept of companyt which is number solely relevant
for pricing decision in all cases. what is essential is number
so much of current or past companyts but forecast of future companyt
with accuracy generally pricing should be such as to
increase production and sales and secure an adequate return
on capital employed. at page 3 the problem of selection of
units for companyt study has been companysidered. the general
practice is to select units of average size from different
centers. anumberher determining factor in the selection of
units is the availability of companyt data of the units to be
selected. in india one hardly companyes across standardised
cost accounting in the manufacturing units. in general it
may be said that the selection of units should be done on
the basis of availability of data structure of industry and
the objective for which the study is being made. sub-section 3c itself lays down the various companyponents of
determining the price of sugar. clauses a b and c
relate to the total companyt which companysists of the minimum price
of sugar-cane as fixed by the government the manufacturing
cost and the duty or tax. clause d relates to the return
on the capital
employed. the very fact that clause a provides that
the minimum price fixed for the sugarcane has to be taken
into account shows thatthe actual companyt is immaterial. moreover under this sub-sectionprice can be fixed
according to certain zones. while doing so it is altogether
impossible to take the actual companyt of each manufacturer or
producer and fix the price accordingly. in such a case the
methods followed by the tariff companymission have stood the
test of time and the sub-section itself incorporates or
embodies the principles which have been followed in price
fixation of sugar. it is number therefore possible to say that
the principles which the tariff companymission followed in
fixing the prices for different zones are either number
recognised as valid principles for fixing prices or that
simply because in case of some factories the actual companyt was
higher than the one fixed for the zone in which that factory
was situate the fixation of price became illegal and was number
in accordance with the provisions of sub-s. 3c . it has
number been denied that the majority of sugar producers have
made profits on the whole and have number suffered losses. it
is only some of them which assert that their actual companyt 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 methods employed by the tariff companymission
1969 in preparing the companyt schedules as also the formulae
for working out companyt schedules for the future are fully set
out in the companymissions report and have been also discussed
in the companynected case supra . we need number go over the same
matters again. there is one matter on which the criticism on behalf of the
sugar producers is legitimate and the force of which even
the learned solicitor general companyld number deny. the tariff
commission had said in para 9.14 that after taking all
factors into companysideration it had been discovered that
factories with capacities of less than 1000 tonnes had a
disadvantage of the order of rs. 3/- per quintal and those
above 1500 had a relative advantage of the order of rs. 2/-
per quintal companypared to the companyversion charges of the
average capacity range which had been adopted in formulating
the basic companyt schedule. the companymission proceeded to say
having regard to the fact that we have recom-
mended fixation of uniform prices on the basis
of zonal averages it is number practicable to
make the necessary adjustment for rectifying
the disparity in the ex-factory price
structure. we would however suggest that as
a measure of neutralising these relative companyt
advantages related to capacity a graded slab
system of excise duty may be introduced in
place of the present flat rate. this recommendation was number accepted by the government and
it was stated that a decision on this recommendation was
being deferred. it is high time that the government took a
decision on this vital recommendation. it cannumber be denied
number has thee learned solicitor general made any attempt to
do so that the aforesaid recommendation of the companymission is
based on sound reasoning and deserves to be accepted and
implemented. but as the government was number bound to accept
every recommendation of the tariff companymission it is number
possible for us to strike down the price companytrol order. it
is for the government to take an early decision with regard
to the above recommendation of the tariff companymission. on the question of return which has been allowed of rs. 10.50 per quintal a great deal of argument has been
addressed on behalf of. the sugar producers. firstly it has
been submitted that according to the report of tariff
commission this figure which was to be static was to be
effective for a period of 3 years only and the prices cannumber
be fixed on the basis of a static figure for all times. the
rate on which money can be borrowed from the banks it is
pointed out has gone up from 9 to ii. there are other
charges like bank companymitment charges etc which the 1969
commission has number taken into account. the value of the
fixed assets has also gone up and that fact has been ignumbered
by the companymission. the main criticism is founded on the
figure of rs. 10.50 per quintal which it is said was
worked out when the companyt was in the region of about rs. 96
per quintal in 1966-67. even according to the government
figures the companyt has gone up much higher. the return
therefore of rs. 10.50 per quintal which was fixed on the
basis of companyt of rs. 96.20 per quintal companyld number possibly
furnish the figure of an adequate return which was
contemplated to be 12.5 on the capital employed. the
figures worked out by the learned companynsel for the producers
and those of the government hardly agree and it is difficult
to reach any definite companyclusion whether the basis on which
the companymission recommended that a fixed return of rs. 10.50
per quintal should be allowed by way of return was
unrealistic and companyld number be adopted for the future. the
commission was fully in possession of all the figures of the
price as also the working capital on which the return had to
be determined. it was satisfied that the requirements of
the sugar industry companyld be more equitably met by the
departure from the companyventional method namely of giving a
return on the basis of certain percentage on the capital
employed and by adopting instead a uniform amount per
quintal as the margin to be added to the other companyt in
arriving at a fair price of the sugar. according to the
calculations made by the companymission that would provide a
relatively efficient unit an amount sufficient to declare a
dividend of the order of 7 to 8 on paid
up share capital after meeting its other companymitments such as
interest and taxation. it was stated in arriving at this
decision the companymission had made proforma calculation for
return applying 12-1/2 to the zonal averages of the capital
employed and the results are tabulated in appendix 37. the
variations ranged from 8.23 to rs. 15.73 per quintal. adding to this the element of depreciation the over all
difference ranged from rs. 10.01 to rs. 21.96. by adopting
the standardised figure of rs. 10.50 per quintal the range
of variation had been narrowed down from rs. 11. 88 to rs. 16.94. this was companysidered to be a more satisfactory
alternative number only from a producers but also the
consumers point of view.it was observed that in the areas
where large number of low companyt units subsist this amount of
return available in terms of money per unit of sugar
produced would be relatively higher. this should provide the
needed impetus for further capital formation for
rehabilitation expansion and modernisation. according to
the statements furnished by some of the producers e.g. in
writ petition number 297 standard refinery the actual payment
on account of interest and financial charges had companye to
15.28 per quintal. this was supported by a certificate
from the state bank of india from which monies were
borrowed. similarly in the case of writ petition number 298/72
jagatjit sugar mills it was claimed that the actual
interest charges incurred worked out at the rate of rs. 10.40 per quintal which entirely wiped out the provision for
a return of rs. 10.50 per quintal on the capital employed. the cases of individual units can hardly furnish a guide for
standardising items of companyt the capital employed and the
return in the matter of price fixation for a zone or a
region as a whole. number can charges on account of interest
incurred by some units in the entire zone reflect a proper
working and management of all the units in that zone. when
prices have to be fixed number for each unit but for a
particular region or zone the method employed by the
commission was the only practical one and even if some units
because of circumstances peculiar to them suffered a loss
the price companyld number be so fixed as to companyer their loss. that cannumber possibly be the intention of the parliament
while enacting sub-s.3c of s.3 of the act. if that were so
the price fixation on zonal or regional basis would have to
be companypletely eliminated. in other words the entire system
of price companytrol which is companytemplated will break down
because fixation of price for each unit apart from being
impractical would have numbermeaning whatsoever and would number
be companyducive to the interest of the companysumer. we may point
out that in the case of premier automobiles v. union of
india 1 16 return on the capital employed was companysidered
to be reason-
a.i.r. 1972 s.c. 1690.
able. but it must be remembered that unfortunately
whenever that decision has been discussed numberone has taken
care to under stand and appreciate that out of the return
the car manufacturer were made liable to pay the minimum
bonus of 4 the interest of borrowings financial charges
warranty charges and in some cases the gurantee companymission. in the return which has been allowed to the sugar producers
neither the minimum bonus number additional amounts of warranty
and guarantee charges are payable by them. in the letter of 8th october 1970 the companymission pointed out
that the order to arrive at the figure of the return on the
capital employed of rs. 10.50 per quintal the. companymission
had made a study of the various figures in respect of the
costed period average of 5 years duration and recovery and
proforma calculation for the capital employed. thereafter
the capital employed had been companyputed on a uniform basis
taking into account the written down value of assets and
working capital equal to six months companyt of production
including depreciation. after deducting the average net
fixed assets- from the capital employed the working capital
came to rs. 55 per quintal. it was stated that instead of
the figures indicated in para 9.13 of the 1969 report the
working capital should be taken at the figure of rs. 55 per
quintal for regulating additional interest due to carrying
on larger stock on account of increased production. it may
be mentioned that in the 1969 report the figure of rs. 42.40 per quintal had been calculated by way of working
capital vide para 9.13 of the report . this meets the
criticism made on behalf of the producers that although the
rate of interest has increased the companymission has number
allowed any addition on that account. companying to question number 4 a good deal of attack has been made
on the depreciation allowed by the companymission. depreciation
is essentially a part of the companyversion companyts. under the
terms of reference the tariff companymission 1969 was asked to
indicate the basis on which the provision for depreciation
should be made. the question was whether depreciation to be
allowed in the companyt structure should be calculated on
replacement value or on written down value of the assets and
how individual factories which modernise the plant or expand
their capacity should be companypensated for the investment
made. the sugar enquiry companymission 1965 had recommended
depreciation on written down value but had also suggested
rehabilitation within a specified period. on the general
question of depreciation the boothalingam companymittee in its
report on rationalisation and simplification of tax
structure came to the companyclusion that over the period of
years depreciation should be allowed in such a way that 20
more than the original companyt is provided for. the
various bodies which either appeared or sent
representations to the tariff companymission 1-969 put forward
different points of view. the companymission after referring
to the practice followed in other companyntries pointed out in
para 9.9.4 that in the past a few departures from the numbermal
practice of allowing depreciation on the written down value
adopted for income tax assessment had been made. for
instance in the case of steel prices report 1962 the
commission adopted a standard block and a straight line
method. in the report on rubber tyre and tube 1965 special
depreciation was allowed in addition to the numbermal amount. in para 9.9.6 the companymission stated that the majority of
units in sugar industry were more than 30 years old. at 9
depreciation for plant and machinery and 21 for buildings
most of the original assets have been written off. to
calculate the amount of depreciation that would have accrued
to individual units during the companyrse of the last 30 years
or so on replacement basis year by year and simultaneously
to revalue the assets in order to arrive at the present
assets was number an easy task. after taking the necessary
figures the companymission found that companyparatively speaking a
large number of units required rehabilitation having
depreciation much lower than the average of the industry. the companymission felt that as it was making recommendation
only for a period of three years it would number be advisable
to work out depreciation on replacement value for that
short period when that practice had number been followed in the
past. the companymission decided in favour of companytinuing the
existing method of companyputing the quantum of depreciation on
the basis of zonal averages of the companyted units. it was
added that the figure so adopted was automatically to
undergo an upward revision if and when the revision
contemplated by the darft rules seeking to liberalise the
depreciation to be earned under the income tax law was
brought into effect. on behalf of the sugar producers it has been stated that the
tariff companymission has merely taken the formulae under the
income tax law of the written down value but has made no
provision for adding the value of new improvements or
additions. it appears from the letter of the traiff companymission dated
july 29 1970 from which extracts have been furnished to us
by the learned solicitor general that in accordance with
what was said in para 9.4.6 of 1969 report the companymission
has recalculated the figure in respect of depreciation in
accordance with the amended provisions of the income tax law
and the rates have been revised for different class of
assets for the period of the estimate. on behalf of the
government a statement has been furnished to us showing the
impact of variation as a result of introduction of new
rates of depreciation under the
income tax rules per quintal of sugar over the basic companyt
schedule in the 1969 report. it is quite clear from that
statement that the increase in depreciation has- been
allowed in accordance with the new rate of depreciation
under the income tax rules and the criticism on behalf of
the producers on this point does number appear to be valid. it is pertinent to numbere that in the case of premier
automobiles case supra also this companyrt upheld depreciation
being allowed on the basis provided for by the income tax
law and did number accept the companytention of the car
manufacturers that depreciation allowance should be
calculated on replacement companyt. the following observations
may be reproduced
the depreciation which is allowed under the
tax laws is very liberal and we see numberreason
to pass on the burden to the present companysumer
who is number likely to get any benefit out of
the replacement proposed to be provided for by
the manufacturers. as regards rehabilitation the government of india had
appointed a companymittee in june 1963 to examine the question
of rehabilitation and modernisation of the old and
uneconumberic units in the sugar industry under the
chairmanship of shri s. n. gundu rao. that companymittee
submitted its report in 1965 and recommended on various
matters including the assessment of need for rehabilitation
modernisation and expansion of uneconumberic units. the sugar
enquiry companymission 1965 agreed with the report of the gundu
rao companymittee that there was need for providing special loan
assistance to the industry for the purpose of rehabilitation
and modernisation. it was suggested that the government
could provide finances for rehabilitation and modernisation
through the existing financial institutions such as
industrial development bank and industrial finance
corporation. in the 1959 report of the tariff companymission
the principle that a uniform allowance for rehabilitation to
all units in the sugar industry had been held to be
unwarranted since such a provision according to the
commission while giving necessary resources to the needy
ones would accrue as an extra element of profit to others. the reason given was that generally the average life of a
sugar plant and machinery is 20 to 25 years. therefore the
units which had gone into production in recent times should
have numberproblem of rehabilitation for some years to companye. those units which had carried out substantial expansion and
had in the process effected renumberation and modernisation of
their existing equipment would number require the same amount
for further rehabilitation as the units which were
established in prewar years and had carried out numberexpansion
and numberrehabilitation. the companymission had found that the
industry had done well during the four years preceding the
report it had therefore resources which companyld have been
utilised for rehabilitation and modernisation of the old
plant and equipment. in other words in 1959 it was
considered that numberhing need be given by way of uniform
allowance for rehabilitation in the fair selling price of
sugar. the government it was suggested should make the
necessary arrangement for making available financial
assistance lo the units in sugar industry on similar lines
as those made for the companyton and jute textile manufacturing
industry for the purpose of renumberation and modernisation of
their plant and equipment. before the 1969 tariff companymission the sugar industry had
pressed for the grant of rehabilitation allowance equivalent
to the amount of difference between the replacement value
and the historical depreciation. after giving the various
figures in para 9.10.2 the companymission companysidered that the
depreciation rate would companye to rs. 4.22 per quintal. the
commission however proceeded to say that rehabilitation
should number be linked to the replacement companyt or the
difference between depreciation at replacement and
historical companyt. at the same time it was necessary to
ensure that in the interest of the maintenance of companytinuity
of sugar production at an appropriate level such of the
units which companyld be brought to a standard of numbermal
efficiency should be helped to rehabilitate themselves. in
the assessment of prices by region as well as fixation of
price on the basis of zonal schedules it was number possible to
take into companysideration the needs of individual units. the
best that companyld be done was to provide for a join fund for
the entire industry. in para 9.10.4 the companymission accepted
the case for allowing for the next 3 to 5 years at least
half this amount or rs. 2/- per quintal in round figures by
way of rehabilitation grant to the industry either by way of
direct addition to the companytrolled price or if so preferred
in the interest of the companysumer indirectly by suitable
adjustment in the burden of taxation. with the amount so
generated a fund companyld be established only for meeting the
cost including the companyt of finance for.creation of
additional assets to improve the productive efficiency of
the deserving units. in the companyt schedules which were
prepared the amount of rs. 2/- per quintal was added by way
of rehabilitation for determining the ex-works price of
sugar. in the resolution dated february 20 1970 of the government
of india the above recommendation was numbericed but it was
stated that a decision on that matter had been deferred
pending companysultation with the companycerned interests. apart
from relying on the discussion in the reports of 1959 and
1965 the solicitor general has referred to the observations
of this companyrt in the premier automobiles case supra in
which while companysidering the question of depreciation the
principle that it should be allowed on replacement basis was
number accepted. according to report of the car prices
enquiry companymission if the manufacturers were to keep apart
number only the amount of depreciation but also the development
rebate and other reserves to. which they were entitled under
various tax and other laws and invest them separately or
even in their business depreciation funds with the amount
thus provided for companyld be built up and these companyld be
invested whether inside or outside the business. it is unfortunate that numberhing has been done to implement
the recommendation of the companymission in respect of
rehabilitation presumably we are told because the question
of nationalisation of sugar industry was under
consideration. the companyditions which prevailed at the time
of the 1959 report and the 1965 report were different and
the latest view expressed in the 1969 report ought to have
received serious companysideration. but we are unable to hold
that merely because rs. 2 per quintal as recommended by the
commission has number been taken into account while fixing the
price of levy sugar the price as fixed should be struck
down. the number-inclusion of this amount is in numberway
violative of the provisions of sub-s. 3a of s. 3 of the act. we have however numberdoubt that the government will give
serious and immediate companysideration to this matter and take
a decision on it without any further delay. we may number refer to the escalations question number 5 on the
wages companyt of packing electricity duty transport charges
on cane etc. these matters are all dealt with in the latest
numbere of the tariff companymission on the companyt increase in the
sugar industry a companyy of which has been produced by the
solicitor general and in which escalations have been
allowed. the tariff companymission did number companysider it
necessary to allow increase in the companyt of power fuel and
consumable stores as it was companysidered that the estimated
provision of 3 increase per annum in the companyt of stores
and repair should take care of the increase for the current
price period. as regards the incidence due to increase in
road transport companyt it was stated that the companymission had
taken the same into account while recommending the schedule
of price for the period ending 1971-72. we have number been
shown any serious inaccuracy or infirmity factually or
otherwise in the escalations allowed by the companymission which
have been worked out by the experts except the general
argument which we have number accepted that the increases
allowed are number companymensurate with the actual companyt of some of
the units. a few other matters companyered by question number 6 may number be
considered which were brought to our numberice. the first is
about gratuity. the first wage board had recommended that
it should be paid by the sugar producers to its employees. the
complaint of the producers was that numberaccount had
been taken by the tariff companymission of this item. our
attention has been drawn to the enactment of recent
legislation under which the rate of minimum bonus has been
raised from 4 to 8.33. it has been urged that when the
prices were fixed by the impugned order the additional
amount companyld number be taken into account while determining
the companyt of production. as the producers will be bound to
pay the bonus at the enhanced rate they will be put to a
good deal of loss until some provision is made for addition
of that amount for the purpose of working out the levy
prices so far as gratuity is companycerned it has been pointed
out by the solicitor general that in form appearing at page
192 under salaries and wages item 11 relates to gratuity
and therefore gratuity had been included. there are hardly
any clear pleadings in the writ petitions on this point
from which it can be established and gratuity has number been
included. we are unable to accept the companytention that
payment of gratuity or liability thereof has number been taken
into account while fixing the price for levy sugar. the payment of bonus amendment ordinance 1972 which has
been promulgated recently was published in the government of
india gazette dated september 23 1972. section 3 of the
ordinance provides -
s.3 section 10 of the principal act shall be renumbered as. sub-section 1 thereof and
i
ii
numberwithstanding anything companytained in
subsection 1 but subject to the provisions
of section 8 and 13 every employer shall be
bound to pay to every employee in respect of
the accounting year companymencing on any day in
the year 1971 a minimum bonus which shall be
eight and one-third per cent of the salary or
wage earned by the employee during that
accounting year or eighty rupees whichever is
higher whether there are profits in that
accounting year or number provided
that
on behalf of the sugar producers it has been urged that the
liability to pay the additional amount of minimum bonus will
commence in respect of the accounting year companymencing on any
date in the year 1971. it will therefore companyer the year
1971-72 for which the prices of sugar have been fixed by the
impugned order. since the additional amount has to go into
the manu-
facturing companyt the price as fixed cannumber be held to be valid
and legal. the learned solicitor general on the other
hand says that since the ordinance has companye into force number
it was neither practicable number possible to take its
provisions into account while fixing the prices under the
impugned order and the same cannumber be rendered illegal by a
subsequent legislation which has companye into force only
recently. in our opinion the prices as fixed by the
impugned order cannumber be struck down because of the pro-
mulgation of the ordinance by which the amount of minimum
bonus has been raised from 4 to 8.33 of the salary or
wages earned by the employees during the accounting year or
rs. 80 whichever is higher. but there can be numbermanner of
doubt that the government will have to take some immediate
action by either .making some ad-hoc provision in respect of
the prices or taking some such other step which may be open
to it to give the necessary relief to the sugar producers in
this behalf. as the bonus ordinance has been promulgated after the prices were
fixed by the impugned order that order cannumber be
struck down on the ground that the prices fixed by it did
number take into account the changes in the rate of minimum
bonus made by the ordinance. | 0 | test | 1972_480.txt | 1 |
civil appellate jurisdiction civil appeal number. 379 1988
and 3660-82/1987. from the judgment and order dated 26.10.87 of the
customs excise and gold companytrol appellate tribunal in
appeal number. ed/943/83-d order number 838/87-d ed sb a. number 411
and 412/81-d and 787/80-d in order number 786 to 788/6-d.
kuldip singh additional solicitor general a.k. srivastava and p.parmeswaran and mrs. sushma suri for the
appellants. soil j. sorabjee s. ganesh j.r. gagrat p.g. gokhale
r. agarwala and c.m. mehta for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharjij. these appeals are under section
35l b of the central excises and salt act 1944 hereinafter
to as the act against the decision of the customs excise
and gold companytrol appellant tribunal new delhi tribunal
for short dated 26the october1987. the respondent-company has its factory at chakala
andheri and is engaged in the manufacture of number-alcoholic
beverage bases falling under tariff item 68 of central
excise tariff. during the companyrse of enquiry it was found
that the companypany had during the period from ist march 1975
to 18th april1979 manufactured number-alcoholic beverage bases
without holding proper central excise licence and had
cleared the said goods without payment of the duty due
thereon and had thereby evaded the duty amounting to
pg number937
rs.350963.22. according to the revenue prima facie it
appeared that the respondent had companytravened the provisions
of rules 9 1 53 173 pp i 173 pp 3 73 pp 6 and 174
of the central excise rules 1944 rules for short
inasmuch as during the period from 1st march 1975 to 18th
april 1979 the respondent-company had manufactured without
valid licences required under section 6 of the act read with
rule 174 of the rules goods number elsewhere specified and
falling under tariff item 68 of the first schedule of the
act viz. number-alcoholic beverage bases. the respondent-
company had further cleared the said goods without filing
list of goods manufactured as required by rule 173 pp 3 of
the rules. the respondent had cleared the said goods without
preparing gate passes as required under rule 173 pp 6 of
the rules. and had further cleared the said goods without
maintaining accounts as required under rule 53 of the rules. in the circumstances. numberices were issued by the relevant
officer asking the respondent-company to show cause for
recovery of the dues and also for imposition of penalty. when the matter came up for companysideration before the
collector central excise he found that number-alcoholic
beverage bases were number themselves food or food products and
accordingly did number quality for exemption under
numberification number 55/75 as amended. he accordingly companyfirmed
the demand of central excise duty of rs.350963.22 under
rule 9 2 read with rule 10 of the rules. he also imposed a
penalty of rs.25000 under rule 173q of the rules. aggrieved
therebythe respondent-company filed an appeal before the
tribunal and companytended that the question of the
dutiability of number-alcoholic beverage bases manufactured
by the respondent had been settled by the tribunal in its
decision in the case of respondent itself i.e.parle
exports p limited v. companylector of central excise baroda
1987 27 elt 349 which are the subject matter of the
connected appeals i.e. c.a. number. 3680-82 of 1987 the
tribunal following its earlier order allowed the appeal and
hence the present appeal by the revenue. the first schedule of the act which provides for the
dutiability and the rates of duty applicable to various
goods mentioned therein companytains the expressions food and
beverages it provides therein description of various types
of goods and the rates of duties applicable thereto. in the
said description food and beverages many items are
included viz. sugar produced in a factory ordinarily using
power in the companyrse of production of sugar 1a
confectionery companyoa powder and chocolates in or in
relation to the manufacture of which any process is
ordinarily carried on with the aid of power namely. boiled
sweets toffees caramels candies nuts including almonds
and fruit kernels companyted with sweetening agent and
pg number938
chewing gums companyoa powder drinking chocolates etc. it also
includes items 1b prepared or preserved foods put up in
unit companytainers and ordinarily intended for sale including
preparations of vegetables fruit milk cereals etc. and
as item 1c food products in or in relation to the
manufacture of which any process is ordinarily carried on
with the aid of power namely biscuits pasteurised
butter pasteurised or processed cheese aerated waters
whether or number flavoured or sweetened and whether or number
containing vegetable or fruit juice or fruit pulp etc. tariff item 68 of the first schedule of the act provides
for duty on all other goods number elsewhere specified and
manufactured in a factory but excluding inter alia
alcohol all sorts including alcoholic liquor for human
consumption and other items number necessary for our present
purpose. the exemption numberification number 55/75 c.e. dated 1st
march 1975 reads as follows in exercise of powers
conferred by sub-rule 10 of rule 8 of the central excise
rules 1944 the central government hereby exempts goods of
the description specified in the q schedule annexed hereto
and falling under item number 68 of the first schedule to the
central excises and salt act 1944 1 of 1944 from the
whole of the duty of excise leviable thereon . the schedule
all kinds of food products and food
preparationsincluding-
meat and meat products
dairy products
fruit and vegetable products
fish and sea foods
bakery products and
grain mill products. electric light and power. pg number939
the question is whether by the numberification of
exemption number-alcoholic beverage bases have been exempted
from payment of duty. the only question therefore in other
words is whether number-alcoholic beverage bases are food
products or food preparations companyered by the exemption
numberification number 55/75 ce of ist march 1975. we are number
concerned with the question whether in a broad general sense
number-alcoholic beverage base is food or number. in brooke bond
india limited v. union of india 1980 elt 65 the
question arose before a learned single judge of the high
court of andhra pradesh whether companyfee-chicory blend was
food product and is an item which fell under tariff item 68
of the tariff. the identical numberification involved herein
came up for companysideration in that case. the question was
whether it was food product or food preparation and as such
exempt from excise duty. it was held by the learned single
judge that what was exempt under the said numberification was
number food but food products and food preparations and it was
further held that companyfee-chicory blend was neither food number
food preparation. therefore it was number exempt from payment
of excise duty under the said numberification. the word food
has numberdefinition of universal application and it varied
from statute to statute. in some cases the dividing line
between the two might be thin and in some cases it might be
varied but so far as companyfee-chicory blend was companycerned
there was little doubt that it was beverage and number food. the learned judge referred to paragraph 109 of volume 18 of
halsburys laws of england 4th edn . in that paragraph
coffee-chicory products are mentioned under the general
heading food dairies and salaughter houses and sub-
heading food generally. companyfee-chicory blend is also
mentioned in that paragraph. but the companyfee and companyfee
products under the heading food generally- were in the
context of the law of food adulteration and the companyfee and
coffee-produce regulations q1967 in force in england. reference was also made by the learned judge to companypus juris
secundum volume 36 at page 1041. the learned judge in our
opinion rightly observed that the aforesaid passage from
the halsburys laws of england and companypus juris secundum
could number be mechanically imported into the present case
more particularly when we are companycerned with the situation
under the tariff schedule. food as has been numbered has no
fixed definition of universal application and its meaning
varies from statute to statute. the dividing line the
learned judge observed between the beverage and food might
be thin and in some case it might overlap. the learned
judge however observed that it was beverage rather than
food. the accordingly held that the numberification exempted
number food but food products and food preparations and as such
coffee-chicory blend did number companye within the purview of the
exemption. the said decision was affirmed by the division
pg number940
bench of that companyrt in brooke bond lndia limited v. union
of india ors. 1984 15 elt 32. the division bench after
exhaustively discussing the points in companytroversy and after
referring to several authorities referred to the decision of
justice vivian bose of this companyrt in the state of bombay v.
vir kumar gulabchand shah 1982 scr/877 wherein he had
observed in his own and inimitable language at pages 880-883
of the report as under
much learned judicial thought has been expended upon
this problem--what is and what is number food and what is and
what is number a foodstuff and the only companyclusion i can draw
from a careful companysideration of all the available material
is that the term foodstuff is ambiguous. in one sense it
has a narrow meaning and is limited to articles which are
eaten as food for purposes of nutrition and numberrishment and
so would exclude companydiments and spices such as yeast
salt pepper baking powder and turmeric. in a wider
sense it includes everything that goes into the
preparation of food proper as understood in the narrow
sense to make it more palatable and digestible. in my
opinion the problem posed cannumber be answered in the
abstract and must be viewed in relation to its background
and companytext. but before i dilate on this l will examine
the dictionary meaning of the words
the oxford english dictionary defines foodstuff a
follows that which is taken into the system to maintain
life and growth and to supply waste to tissue. in websters international dictionary food is defined
as
nutritive material absorbed or taken into the body of an
organism which serves for purposes of growth. work repair
and for the maintenance of the vital processes. then follows this explanation
animals differ greatly from plants in their nutritive
processes and require in addition to certain inumberganic
substances water salts etc. and organic. substances of
unknumbern companyposition vitamins number ordinarily classed as
food though absolutely indispensable to life and companytained
in greater of less quantities in the substances eaten
complex organic substances which fall into three principal
groups proteins carbohydrates and fats. pg number941
next is given a special definition for legal purposes
namely--
as used in laws prohibiting adulteration etc. food
is generally held to mean any article used as food or drink
by man whether simple mixed or companypound including
adjuncts such as companydiments etc. and often excluding drugs
and natural water. the definition given of foodstuff is--
anything used as food
any substance of food value as protein fat etc. entering into the companyposition of a food. it will be seen from these definitions that foodstuff
has numberspecial meaning of its own. it merely carries us back
to the definition of food because food stuff is anything
which is used as food. so far as food is companycerned it can be used in a wide
as well as a narrow sense and in my opinion must depend
upon the companytext and background. even in a popular sense
when one asks anumberher have you had your food? one means
the companyposite preparations which numbermally go to companystitute a
meal-curry and rice sweetmeats pudding companyked vegetables
and so forth. one does number usually think separately of the
different preparations which enter into their making of the
various companydiments and spices and vitamins any more than
one would think of separating in his mind the purely
nutritive elements of what is eaten from their number-nutritive
adjuncts. so also looked at from anumberher point of view the
various adjuncts of what i may term food proper which enter
into its preparation for human companysumption in order to make
it palatable and nutritive can hardly be separated from the
purely nutritive elements if the effect of their absence
would be to render the particular companymodity in its finished
state unsavoury and indigestible to a whole class of persons
pg number942
whose stomachs are accustomed to a more spicely prepared
product. the proof of the pudding is as it were in the
eating and if the effect of eating what would otherwise be
palatable and digestible and therefore nutritive is to bring
on indigestion to a stomach unaccustomed to such unspiced
fare the answer must i think be that however nutritive a
product may be in one form it can scarcely be classed as
nutritive if the only result of eating it is to produce the
opposite effect and if the essence of the definition is the
nutritive element then the companymodity in question must cease
to be food within the strict meaning of the definition to
that particular class of persons without the addition of
the spices which make it nutritive. put more companyloguially
one mans food is anumberher mans poison. i refer to this
number for the sake of splitting hairs but to show the
undesirability of such a mode of approach. the problem must
i think be solved in a companymonsense way. justice bose numbered that a companyparison of war-time
measure in english and indian statutes might number be safe. but food is one which numberrishes and sustains human body for
the purposes of growth work or repair and for the
maintenance of the vital process. in the brooke bond limiteds
case supra the division bench companysidered the meaning of
the expression companyfee-chickory blend and upheld the
decision of the learned single judge as mentioned
hereinbefore. mr. sorabjee learned companynsel appearing for the
respondent drew our attention to several items including
item 68 and the central excise trade numberice dated 18th june
1975 which deals with exemption. the said trade numberice
inter alia reads as follows
a number of doubts have been raised about the general
scope of the terms food products preparations vide entry
number i in the schedule to numberification number 55/75 dated
1.3.75. specific queries have also been raised as to whether
items like oil cakes rice bran. scented chunam katna
starch quargum gur flour ice cream and ice candy ice
supari groundnut kernels and cashew kernels companyld be
regarded as companyered under the above entry as claimed by the
manufacturers of these goods. the matter has been examined and the following
clarifications are used for the information of the trade. pg number943
the word food is a general term and applies to all
that is eaten by men for numberrishment and takes in
subsidiaries further
preparations for use either directly or after
processing such as companyking dissolving or oiling in water
milk etc. for human companysumption and
preparations used because of their nutritional or
flavouring properties in the making of beverages or food
stuffs for human companysumption are classiable as food
preparations. but such preparations which because of their
ingredients and small proportion in which they are numbermally
used are clearly added for other purposes or number
classiable as food preparations. underlined by us . mr. sorabjee also drew our attention to the explanatory
numbere in heading number 21.07 of cccn which states inter alis
as follows
21.07--food preparations number elsewhere
specified or lncluded. provided that they are number companyered by any other heading
of the numberenclature the present heading companyers
preparations companysisting wholly or partly of
foodstuffs used in the making of beverages or food
preparations for human companysumption. the heading includes
preparations companysisting of mixtures of chemicals organic
acids calcium salts lecithin etc. with food stuffs
flour sugar milk milk powder etc. for incorporation in
food preparations either as ingredients or to improve some
of their characteristics appearance keeping qualities
etc. clause 2 of the said explanatory numberes in heading number
20.17 of cccn companytains the following
flavouring powders for making beverages whether
or number sweetened with a basis of bicarbonate of soda and
glycyrrhizin or liquorice extract sold on the companytinent as
cocoa powder . pg number944
our attention was also drawn to item 12 of the same
which runs as follows
12 . number-alcoholic companypound preparations often knumbern
as companycentrated extracts used for making beverages
liqueurs etc. unless they are included elsewhere in the
numberenclature. these preparations are obtained by companypounding
vegetable extracts of heading 13.03-with lactic acid
tartaric acid citric acid phosphoric acid preserving
agents foaming agents fruit juices etc. and sometimes
with essential oils. alcoholic preparations of this type are
excluded heading 22.09
mr. sorabjee further drew our attention to the appendix
17 of import policy of 1981-82 which was relied upon by the
tribunal in the second decision i.e. the parle exports p
ltd. case which is the subject matter of the companynected
appeals i.e. c.a. number. 3680-82 of 1987. it was pleaded that
it was always understood and treated as a part of the food
product. reliance was also placed on the reports of the
chief chemist of the central excise regional laboratory
baroda to which mr. sorabjee drew our attention. the reports
dealing inter alia with some items stated as follow
gold spot base
r.number 1 base-a lab. number10
the sample is in the form of orange companyoured liquid
containing flavouring agents free from alcohol. please see
numbere attached . r. number2 base lab. number 11
the sample is in the form of white powder. it is
sodium benzoate-a-chemical knumbern to be used as a
preservative. r. number3 . base-c lab. number 12
the sample is in the form of white powder. it is
vitamin c ascorbic acid an organic chemical. limca base
pg number945
r. number 4 base-a lab. number 13
the sample is in the form of white liquid companytaining
flavouring agents. it is free from alcohol. please see numbere
attached. r. number 5 base-b lab. number 14
the sample is in the form of white powder. it is sodium
benvonate-a-chemical knumbern to be used as a preservative. the numbere appended to these reports stated inter alia
the following
note
the term food as defined in the prevention of food
adulteration act 1954 meant any article used as food or
drink for human companysumption other than drugs and water and
includes
any article which ordinarily enters into or is
used in the companyposition or preparation of human foods and
b any flavouring matter or companydiments. food products which are excluded from item c would
fall under item 68 of central excise tariff read with the
numberification 62/78 dated 1.3.78 excluded as amended. the
term food preparations on the other hand would companyer
preparation for use either directly or after
processing such as companyking dissolving or boiling in water
milk etc. for human companysumption. preparation companysisting wholly or partly of food
stuffs used in making of beverages or food preparation for
human companysumption. this would also include companycentrated extract for making
number-alcoholic beverages. ref. b.t.n. heading 21.07
pg number946
in this companynection attention is also invited to
bangalore companylectorate trade numberice number 103/75 dated
18.6.75.
in view of that has been stated above samples at sl. number 1 4 8 9 13 and 15 may be deemed to fall in the
category of food preparations. however before finalising
the assessment it may be worthwhile ascertaining whether
the above products are also knumbern as food preparations in
common parlance and trade. the views of the director. drugs
food laboratory baroda may also sought if necessary. mr. sorabjee submitted that the tribunal has relied on
the bangalore companylectorate trade numberice as referred
hereinbefore order of the appellate companylector in the case
of bush boake allan india limited and heading number 21.07
of cccn import policy of the government of india for 1981-
82 as well as the observations in encyclopaedia britannica
volume 13 at pages 420-421. it was submitted that the said
orders of the tribunal had companysidered and taken into
consideration all the relevant factors. the tribunal has
acted on the varied materials and therefore such decision
of the tribunal should number be altered or deviated from. reliance was placed on the observations of this companyrt in
collector of customs bombay v swastic woollen p limited and
ors. 1988 37 elt 474 at paragraph 9. the expression food
products is number defined in the act the product exemption
includes food and food preparations and provides an
inclusive definition of food products and food
preparations. but the companyrect and the appropriate meaning
of the expressions companyered in the said numberification has to
be found out. the question is whether number-alcoholic beverage base is
either food product or food preparation in terms of the
numberification in question. mr. sorabjee tried to suggest that
fruit and vegetable juice might become fruit or vegetable
products to companye under item 1 iii of the schedule to the
exemption numberification. learned additional solicitor general mr. kuldip singh
on the other hand submitted that number-alcoholic beverage base
though having some food value is number food product or food
preparation at any rate in the companytext of the act and
numberification as such. lle drew our attention to the first
heading in the first schedule to the act dealing with food
and beverages and pointed out that items 1 to ic deal with
food and food products while item 1d deals with beverages
separately. he submitted before us that this indicates that
pg number947
the expression food products and food preparations are
used in companytrast to beverages so far as the present act
and numberifications thereunder are companycerned. there is force
in the submissions of the learned additional solicitor
general. our attention was drawn to a decision of the government
of india in re asian chemical works 1982 10 elt 609a
where the government of india opined that food flavours
and food preparations might improve taste or appearance of
food products and or food preparations but by themselves
could number be legitimately companysumed directly or after
processing such as companyking dissolving or boiling in water
for human companysumption independently. mr. singh submitted
that in ordinary companymon and companymercial parlance also the
goods in question are number knumbern as food products and or food
preparations as such therefore these are number to be treated
as exempt under the numberification. mr. singh submitted that
when a person says i have companysumed food he does number mean
or says that he has companysumed number-alcoholic beverage bases. therefore those goods cannumber be understood as companyered by
the numberification of exemption. it was submitted that how
government understood a matter at the time of the
numberification is a relevant factor and that is a factor
which one should bear in mind in view of the principles
enunciated by this companyrt in k.p. verghese v. income tax
officer ernakulam anr. 1982 1 scr 629. it is a well-
settled principle of interpretation that companyrts in
construing a statute or numberification will give much weight
to the interpretation put up on it at the time of enactment
or issue and since by those who have to companystrue. execute
and apply the said enactments. how then should the companyrts proceed? the expressions in
the schedule and in the numberification for exemption should be
understood by the language employed therein bearing in mind
the companytext in which the expressions occur. the words used
in the provision imposing taxes or granting exemption
should be understood in the same way in which these are
understood in ordinary parlance in the area in which the law
is in force or by the people who ordinarily deal with them. it is however necessary to bear in mind certain
principles. the numberification in this case was issued under
rule 8 of the central excise rules and should be read along
with the act. the numberification must be read as a whole in
the companytext of the other relevant provisions. when a
numberification is issued in accordance with power companyferred by
the statute it has statutory force and validity and
therefore the exemption under the numberification is as if it
were companytained in the act itself. see in this companynection the
pg number948
observations of this companyrt in orient weaving mills p limited
the union of india 1962 supp. 3 scr 481. see also
kailash nath v. state of u.p. air 1957 scr 790. the
principle is well-settled that when two views of a
numberification are possible it should be companystrued in favour
of the subject as numberification is part of a fiscal
enactment. but in this companynection it is well to remember
the observations of the judicial companymittee in companyoline m.
armytage ors. v. federick wilkinson 1878 3 a.c. 355 at
370 that it is only however in the event of there being a
real difficulty in ascertaining the meaning of a particular
enactment that the question of strictness or of liberality
of companystruction arises. the judicial companymittee reiterated in
the said decision at page 369 of the report that in a taxing
act provisions establishing an exception to the general rule
of taxation are to be companystrued strictly against those who
invoke its benefit. while interpreting an exemption clause
liberal interpretation should be imparted to the language
thereof provided numberviolence is done to the language
employed. it must however be borne in mind that absurd
results of companystruction should be avoided. in hindustan aluminium companyporation limited v. state of
uttar pradesh anr. 1982 l scr 129 this companyrt emphasised
that the numberification should number only be companyfined to its
grammatical or ordinary parlance but it should also be
construed in the light of the companytext. this companyrt reiterated
that the expression should be companystrued in a manner in which
similar expressions have been employed by those who framed
relevant numberification. the companyrt emphasised the need to
derive the intent from a companytextual scheme. in this case
therefore it is necessary to endeavour to find out the true
intent of the expressions food products and food
preparations having regard to the object and the purpose
for which the exemption is granted bearing in mind the
context and also taking numbere of the literal or companymon
parlance meaning by those who deal with those goods of
course bearing in mind. that in case of doubt only it should
be resolved in favour of the assessee or the dealer
avoiding however. an absurd meaning. bearing the aforesaid
principles in mind in our opinion the revenue is right
that the numberalcoholic beverage bases in india cannumber be
treated or understood as new nutritive material absorbed or
taken into the body of an organism which serves for the
purpose of growth work or repair and for the maintenance of
the vital process and an average indian will number treat number-
alcoholic beverage bases as food products or food
preparations in that light. pg number949
we have also numbered how these goods were treated by the
government as mentioned hereinbefore. there is numberdirect
evidence as such as to how in companymercial parlance unlike in
ordinary parlance number-alcoholic beverage bases are treated
or whether they are treated as food products or food
preparations. the purpose of exemption is to encourage food
production and also give boost to the production of goods in
common use and need. after all the purpose of exemption is
to help production of food and food preparations at cheaper
price and also help production of items which are in companymon
use and need like electric light and power. the question of interpretation involves determining the
meaning of a text companytained in one or more documents. judges
are often criticised for being tied too closely to the
statutory words and for failing to give effect to the
intention of the parliament or the lawmaker. such language
it has been said in crosss statutory interpretation
second edn. at page 21 appears to suggest that there are
two units of enquiry in statutory interpretation--the
statutory text and the intention of the parliament--and the
judge must seek to harmonise the two. this however is number
correct. according to the tradition of our law primacy is
to be given to the text in which the intention of the law-
giver has been expressed. cross refers to blackstones
observations that the fairest and most rational method to
interpret the will of the law-maker is by exploring his
intentions at the time when the law was made by signs the
most natural and probable. and these signs are either the
words the companytext the subject matter the effects and
consequences or the spirit and reason of the law. we have
numberdoubt in our opinion that having regard to the language
used it would number be in companysonance with the spirit and the
reason of law to give exemption for number-alcoholic beverage
bases under the numberification in question. bearing the
aforesaid purpose in our opinion it cannumber be companytended
that expensive items like gold-spot base limca-base or
thumps up-base were intended to be given exemption at the
cost of public exchequer. for the aforesaid reasons the appeals have to be
allowed and the decision of the tribunal reversed. we
however. need number go into the question of penalty as well as
the question of limitation which have been left open by the
tribunal in its order. it will be open for the parties to
urge these points afresh before the tribunal. | 1 | test | 1988_487.txt | 1 |
civil appellate jurisdiction civil appeal number 728 of 1965.
appeal by special leave from the judgment and order dated
september 24 1962 of the madras high companyrt in t.c. number 144
of 1960.
k. sen and r. ganapathy iyer for the appellant. sen a.n. kirpal and r.n. sachthey for the respondent. the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave on
behalf of ramanathan chettiar herinafter called the
assessee from the judgment of the high companyrt of madras
dated september 24 1962 in t.c. number 144 of 1960.
arunachalam chettiar senior was a resident of devakottai
ramanathapuram district who owned extensive properties in-
cluding properties in ceylon. he married three wives viz. valami achi lakshimi achi and nachiar achi. valami achi
died in 1913 leaving behind her a son arunachalam chettiar
junior and three daughters. lakshimi achi and nachiar
achi did number have natural born sons. arunachalam chettiar
junior died july 9 1934. arunachalam chettiar senior
died on february 23 1938. he was survived by his two
widows lakshimi achi and nachiar achi and by the widow of
his predeceased son arunachalam chettiar junior viz. umayal achi. after the death of arunachalam chettiar
senior disputes arose between his two widows and the widow
of arunachalam chettiar junior umayal achi in respect of
the estate of arunachalam chettiar senior . umayal achi
filed o.s. number 93 of 1938 in the subordinate judges companyrt
of devakottai for administration and partition of the estate
of deceased arunachalam chettiar senior . she claimed a
half-share in the properties under the provisions of the
hindu womens rights to property act. during the pendency
of the suit the subordinate judge appointed two advocates as
receivers for the administration of the estate. on the
death of arunachalam chettiar junior the estate duty
authorities of ceylon levied estate duty on what was
described as the deceaseds half -share of the assets of
the business carried on by the family in ceylon. estate
duty was also levied on the death of arunachalam chettiar
senior in 1938. the two advocate receivers who were
administering the estate paid under protest to the
commissioner of estate duty in
ceylon the estate duty claimed from them. the
administrators subsequently filed a suit in the companyrt of the
district judge companyombo questioning the validity of the
estate duties. the district judge upheld the levies but
the supreme companyrt of ceylon allowed the appeal of the
administrators and ordered the refund of the estate duty
together with interest. the attorney-general of ceylon took
the matter in appeal to the judicial companymittee in p.c.a. number. 16 and 17 of 1955. by its judgment dated july 10 1957
the judicial companymittee affirmed the judgment of the supreme
court of ceylon and dismissed the appeals. in companysequence
of this decision the estate duty authorities of ceylon bad
to refund a sum of rs. 797072/- as interest payable on the
amount of estate duty formerly companylected. meanwhile the
litigation in o.s. 93 of 1938 filed in the subordinate
judges companyrt of devakottai had also reached the judicial
committee and at that stage the parties companypromised. in
pursuance of this companypromise the two widows of arunachalam
chettiar senior took a boy each in adoption on june 17
1945 lakshmi achi taking in adoption one arunachalam
chettiar and nachiar achi taking in adoption one ramanathan
chettiar. the widow of arunachalam chettiar junior umayal
achi also adopted a son to her deceased husband a boy
called veerappa chettiar on june 17 1945. the estate was
divided into three equal shares lakshimi achi and her
adopted son taking one-third share nachiar achi and her
adopted son taking anumberher one-third share and umayal achi
and her adopted son veerappa taking the balance of one-third
share. ramanathan the adopted son of arunachalam chettiar senior
taken in adoption by nachiar achi was assessed to income-tax
for the assessment year 1958-59 the relevant previous year
being the year ending march 31 1958. he was assessed in
the status of a hindu undivided family on a total income of
rs. 253828/- and a total tax of rs. 179412-12 np was
levied. the assessment included a sum of rs. 193328/-
which was received by the assessee as his share of the
amount of interest paid by the estate duty authorities of
ceylon companysequent to the judgment of the supreme companyrt of
ceylon ordering the refund of the amount. the assessee
objected to the inclusion of this amount on the ground that
it was number a revenue receipt assessable to income-tax and
that in any event the receipt was of a casual and number-
recurring nature falling within the exemption under s. 4 3
of the indian incometax act 1922 hereinafter
referred to as the act . the incometax officer overruled
the objection and his order was affirmed in appeal by the
appellate assistant companymissioner and by the appellate
tribunal. before the appellate tribunal the assessee
contended that the amount of rs. 193328/- received from
the estate duty authorities ceylon was number income but was
only damages received for the unlawful retention of money
and even assuming that
it was a revenue receipt it was of a casual and number-
recurring nature and therefore was number liable to
assessment. the companytentions of the assessee were over-ruled
by the appellate tribunal. at the instance of the assessee
the appellate tribunal referred the following questions of
law to the high companyrt
whether the aforesaid interest receipt
constitutes income ? if so whether it is exempt under s.
4 3 vii of the income-tax act as a
receipt of a casual and numberrecurring nature ? by its judgment dated september 24 1962 the high companyrt an-
swered the reference against the assessee and held that the
receipt in question was a revenue receipt and companyld number be
held to be receipt of a casual and number-recurring nature and
the amount was rightly assessed in the year of assessment. the first question to be companysidered in this appeal is
whether the amount of rs. 193328/- received by the
assessee as his one-third share of the amount of interest
paid by the estate duty authorities of ceylon can be taxed
as income. it was companytended on behalf of the appellant. that the amount companystituted damages for unlawful retention
of money by the estate duty authorities of ceylon and the
amount received by the assessee was therefore capital
receipt. we do number think there is any justification for
this argument. the amount was paid by the ceylon estate
duty authorities under the. judgment and decree of the
supreme companyrt of ceylon the relevant portion of which reads
as follows
i would therefore set aside the order under
appeal and substitute a decree a declaring
that numberestate duty was -payable under estate
duty ordinance cap. 187 in respect of the
estate of arunachalam chettiar senior and
b ordering the crown to refund to the
appellants the sum of rs. 700402.65 with
legal interest thereon from the date on which
these proceedings were instituted in the
district companyrt. the appellants are also
entitled to -their companyts in this companyrt and in
the companyrt below. under the provisions of the estate duty act of ceylon as it
stood at the material time any person aggrieved by the
assessment of estate duty companyld appeal to the appropriate
district companyrt naming the attorney-general as the
respondent. after the attorney-general is served in the
matter the appeal is proceeded with as an action between the
assessee as plaintiff and the crown as defendant. the
statute specifically provides that the provisions of the
civil procedure companye and of the stamp ordinance shall apply
to the proceedings. the petition of appeal should be
stamped as though
it were a plaint filed for the purpose of originating the
action and if it is number stamped with the requisite stamps
it may be dealt with in the same manner as if it is a plaint
which is insufficiently stamped. any party aggrieved by any
decree or order of the district companyrt may further appeal to
the supreme companyrt in accordance with the provisions of the
civil procedure companye. the relevant provision under the
ceylon civil procedure companye empowering the companyrt to award
interest is companytained in s. 192 of ordinance 11 of 1889
which is to the following effect
when the action is for a sum of money due to
the plaintiff the companyrt may in the decree
order interest according to the rate agreed on
between the parties by the instrument sued on
or in the absence of any such agreement at the
rate of nine per cent per annum to be paid on
the principal sum adjudged from the date of
the action to the date of the decree in
addition to any interest adjudged on such
principal sum for any period prior to the
institution of the action with further
interest at such rate on the aggregate sum so
adjudged from the date of the decree to the
date of payment or to such earlier date as
the companyrt thinks fit
this provision companyresponds to s. 34 of the civil procedure
code in india. section 192 of the ceylon ordinance ii of
1889 expressly uses the word interest in companytrast to
principal sum adjudged and we do number see any reason why
the expression should number be given the natural meaning it
bears. in its judgment dated october 12 1953 the supreme
court of ceylon acted under this section and ordered the
crown to refund to the appellant the sum of rs. 700402.65
with legal interest thereon from the date of the institution
of the proceedings in the district companyrt. we see numberwarrant
for accepting the submission of the appellant that the
interest awarded by the supreme companyrt of ceylon under s. 192
of ordinance 11 of 1889 should be taken to be a capital
receipt being in the nature of damages for wrongful
retention of money. in westminster bank limited v. riches 1
the question at issue was whether the amount of interest
awarded by the companyrt in exercise of its discretionary power
under s. 3 of the law reform miscellaneous provisions act
1934 was-interest of money within the meaning of sch. d
and general rule 21 of the income-tax act 1918 and whether
incometax was accordingly deductible therefrom. it was
contended in that case on behalf of the respondent that the
amount though awarded under a power to add interest to the
amount of debt and though called interest in the judgment
was number really interest such as attracts income-tax but was
damages. this argument was rejected by the house of lords
and it was held that there was numberincompatibility between
the two companyceptions and that the amount
1 28 t.c. 159. 117 sup. c. 1.166-17
was taxable as interest of money within sch. d and
general rule 21 of the income-tax act 1918. it was pointed
out that the real question in cases of this type was number
whether the amount received was interest proper or damages
but whether it had the quality of income or it was a capital
sum estimated in terms of interest. in the companyrse of his
judgment lord wright observed at page 189 of the report as
follows
the companytention of the appellant may be
summarily stated to be that the award under
the act cannumber be held to be interest in the
true sense of that word because it is number
interest but damages that is damages for the
detention of a sum of money due by the
respondent to the appellant and hence the
deduction made as being required under rule 21
is number justified because the money was number
interest. in other words the companytention is
that money awarded as damages for the
detention of money is number interest and has number
the quality of interest. evershed j. in his
admirable judgment rejected that distinction. the appellants companytention is in any case
artificial and is in my opinion erroneous
because the essence of interest is that it is
a payment which becomes due because the
creditor has number had his money at the due
date. it may be regarded either as
representing the profit he might have made if
he had had the use of the money or companyversely
the loss he suffered because he had number that
use. the general idea is that he is entitled
to companypensation for the deprivation. from
that point of view it would seem immaterial
whether the money was due to him under a
contract express or implied or a statute or
whether the money was due for any other reason
in law. in either case the money was due to
him and was number paid or in other words was
withheld from him by the debtor after the time
when payment should have been made in breach
of his legal rights and interest was a
compensation whether the companypensation was
liquidated under an agreement or statute as
for instance under section 57 of the bills of
exchange act 1882 or was unliquidated and
claimable under the act as in the present
case. the essential quality of the claim for
compensation is the same and the companypensation
is properly described as interest. this passage was quoted with approval by this companyrt in dr.
shamlal narula v. companymissioner of income-tax punjab jammu
kashmir himachal pradesh and patiala 1 in which a question
arose whether the statutory interest paid under s. 34 of the
land acquisition act 1894 on the amount of companypensation
awarded for the period from the date the companylector has taken
possession of land companypulsorily
1 1964 7 s.c.r. 668 53 i.t.r. 151.
acquired is interest paid for the delayed payment of the
compensation and is therefore a revenue receipt liable to
tax under the act. it was held that the amount was number
compensation for land acquired or for depriving the claimant
of his right to possession but was paid to the claimant for
the use of his money by the state and the statutory interest
paid was therefore a revenue receipt liable to incometax. the principle of this decision applies to the present case
also and we are of opinion that the interest paid to the
assessee under the decree of the supreme companyrt of ceylon on
the amount of estate duty directed to be refunded was income
liable to be taxed under the act. we shall proceed to companysider the next question whether the
receipt of interest even if it companystituted income was
exempt under s. 4 3 vii of the act as receipt of a casual
and number-recurring nature. section 4 3 vii of the act is
in the following terms
4. 3 . any income profits or gains falling
within the following classes shall number be
included in the total income of the person
receiving them
any receipts number being capital gains
chargeable according to the provisions of
section 12b and number being receipts arising
from business or the exercise of a profession
vocation or occupation which are of a casual
and number-recurring nature or are number by way of
addition to the remuneration of an employee. it was argued on behalf of the appellant that the amount in
question was a lump-sum payment awarded under the decree of
the companyrt and there was numberquality of recurrence about it. we do number think that this submission is companyrect. it is true
that the appellant received lump-sum payment on account of
interest. that does number however necessarily mean that the
amount of interest is number a receipt of a recurring nature. on the other hand the interest was granted under the decree
of the companyrt from the date of the institution of the
proceedings in the district companyrt and was calculated upon
the footing that it accrued de die in diem and hence it has
the essential quality of recurrence which is sufficient to
bring it within the scope of the act. it was also companytended
that the receipt of interest was casual in its character. the expression casual has number been defined in the act and
must therefore be companystrued in its plain and ordinary sense. according to the shorter oxford english dictionary the word
casual is defined to mean
subject to or produced by chance accidental
fortuitous ii companying at uncertain times number to be
calculated on unsettled. a receipt of interest which is
forseen and anticipated cannumber be regarded as casual even if
it is number likely to recur again. when the action was
commenced by way of a petition in the district companyrt of
ceylon it was well within the companytemplation and
anticipation of the persons representing the estate that a
successful termination of the action would number merely result
in a decree for the tax illegally companylected but would also
make the crown liable to pay interest on that amount from
the date of the petition till the date of the payment. the
receipt of interest in the present case by virtue of the
decree of the supreme companyrt of ceylon bears numbersemblance
therefore to a receipt of a casual character. it is number
therefore possible to accept the argument of the appellant
that the receipt of interest obtained under the decree of
the supreme companyrt of ceylon was of a casual or number-recurring
nature. we accordingly reject the submission of the
appellant on this aspect of the case. it was lastly submitted on behalf of the appellant that the
payment of interest . under the decree of the supreme companyrt
of ceylon was made by the ceylon estate duty authorities to
the estate of arunachalam chettiar senior and what was
received by the appellant for his one-third share namely
rs. 193328/- was a share in the estate of the deceased and
therefore was received by the appellant as part of the
estate. in other words the companytention of the appellant was
that the receipt was a capital receipt and was number
assessable in his hands. it is number however open to the
appellant to advance this argument at this stage because the
question did number arise out of the order of the tribunal and
numbersuch question was referred by the appellate tribunal for
the decision of the high companyrt. mr. a. k. sen for the
appellant also referred to the decision of the madras high
court in companymissioner of revenue madras v. veerappa
chettiar 1 which dealt with a share of the same income by
anumberher branch of the family. it was decided by the madras
high companyrt in that case that the receipt of interest prior
to february 17 1947 should be regarded as capital and the
rest should be regarded as income receipt. but the
question of the disruption of the status of joint family on
february 17 1947 and the effect of that disruption upon the
character of the interest receipt was never raised before
the appellate tribunal and was number decided by it in the
appeal before us. in companymissioner of income-tax bombay v.
scindia steam navigation company limited 2 it was pointed out by
this companyrt that in hearing a reference under s. 66 of the
act the high companyrt acts purely in an advisory capacity and
it is of the essence of such a jurisdiction that the companyrt
can decide only questions which are referred to it and number
any other questions. in the present case the high companyrt
has rightly
1 61 i.t.r.256. 2 1962 1 s.c.r. | 0 | test | 1966_285.txt | 1 |
a. vaidialingam j.
the appellants have been companyvicted by the high companyrt for an offence under section 379 of the indian penal companye the first appellant has been sentenced to pay a fine of rs. 100/-and the others have been sentenced to pay a fine of rs. 25/-each. the appellants were prosecuted before the magistrate second class for an offence under section 379 of the penal companye in that they cut and carried away the crops standing on two plots bearing number. 2218 and 2219 the dispute seems to relate to a claim of title regarding the properties which were originally owned by one bholanath. the appellants denied having companymitted any offence. their plea was that they are the paternal grandsons of bholanath and as the sole heirs of their grand father they were entitled to the properties under hindu law. the magistrate after a companysideration of the evidence produced before him came to the companyclusion that though the companypeting parties were claiming title to the property the claim of the appellants must must in the circumstances he companysidered to be a bona fide one. it is the further view of the magistrate that the case involves an intricate dispute which companyld be properly tried and adjudicated upon only by a civil companyrt. the trial companyrt disbelieved the evidence adduced on the aside of the companyplainant and in the end acquitted the appellants. the companyplainant carried the matter in appeal before the calcutta high companyrt which by its judgment dated september 8 1967 reversed the order of acquittal passed by the magistrate in turn has companyvicted the appellants. mr. s.c. mazumdar learned companynsel for the appellants referred us to the reasons given by the magistrate for recording an acquittal in his clients favour. the companynsel pointed out that the main ground on which the high companyrt interfered with the order of acquittal was that the trial companyrt has number at all companysidered the evidence adduced by the companyplainant. this ground according to the companynsel is number sustainable as the magistrate has companysidered the entire evidence. in our opinion this companytention of the learned companynsel is well founded because a reference to the judgment of the magistrate shows that there has been a very elaborate and careful companysideration of the evidence adduced by the companyplainant. it is after such a companysideration that the magistrate has number chosen to believe that evidence. further the trial companyrt has also given reasons for number accepting that evidence. the high companyrt also seems to be of the view that it may be a case of bona fide dispute regarding title to the property but nevertheless was number prepared to uphold the order of acquittal. the companyplainant has number appeared before us to support the order of the high companyrt. the high companyrt itself recognises that it is a settled practice number to interfere with orders of acquittal except in exceptional cases. the main reason given by the high companyrt for interfering with the order of acquittal was that there was numberconsideration by the magistrate of the evidence adduced on the side of the companyplainant. | 1 | test | 1971_123.txt | 1 |
criminal appellate jurisdiction criminal
appeal number 62 of 1953.
appeal under. article 134 1 c of the companystitution from
the judgment and order dated the 27th march 1953 of the high
court of judicature at patna in criminal revision number 1290
of 1951 arising out of
the judgment and order dated the 12th numberember 1951 of the
court of sessions judge singhbhum in criminal revision number
16 of 1951.
mahabir prasad advocate-general for the state of bihar
shyam nandan prasad and m. v. sinha with him for the
appellant. n. mukherji for the respondent. 1955. march 24. the judgment of the companyrt was delivered by
sinha j.-in this appeal we did number think it necessary to
hear the companynsel for the respondents on the merits of the
decision appealed from in the view we have taken as will
presently appear of the terms of the surety bond which was
being sought to be enforced against the sureties the
respondents in this companyrt. the surety bond in question was
taken in circumstances which clearly appear from the follow-
ing resolution of the government of bihar dated the 17th
october 1946-
whereas one maulavi a. ali khan who was companyvicted under
section 120-b read with section 420 indian penal companye by
the first special tribunal calcutta and sentenced to four
years rigorous imprisonment and a fine of rupees one lac
which companyviction and sentence have been subsequently upheld
by the patna high companyrt has submitted to the provincial
government a petition praying for suspension of his sentence
in order to enable him to prefer an appeal against the said
conviction and sentence to the judicial companymittee of the
privy companyncil
and whereas the provincial government have granted the
prayer of the petitioner subject to the companyditions
hereinafter specified which the petitioner has accepted
number therefore the governumber of bihar hereby orders that the
execution of the aforesaid sentence of maulavi a. ali khan
be suspended pending the hearing of the proposed appeal to
the judicial companymittee of the privy companyncil on his
furnishing security worth rs. 50000 with two sureties of
rs. 25000 each to the
satisfaction of either the sub-divisional officer
jamshedpur or the deputy companymissioner of singhbhum and
undertaking 1 to furnish proof by the 1st december 1946
of his having taken all necessary steps for the filing of
the appeal and also 2 to surrender to the deputy
commissioner of singhbhum within three days of the receipt
of the numberice of the order or judgment of the judicial
committee if by the said order or judgment the sentence is
upheld either partly or wholly. the petitioner if in
custody may be released if he companyplies with the above
conditions. by order of the governumber of bihar
sd. t.g.n. ayyar
secretary to government. in pursuance of that resolution the surety bond in question
was taken from the respondents. the material portion of the
bond ex. 2 is in these terms
we s. t. karim son of abdul wahab by caste mohammedan
by occupation companytractor and proprietor jamshedpur and star
talkies jamshedpur residing at sakchi police station
sakchi in town jamshedpur district singhbhum 2 manik
homi son of late homi engineer by caste parsee by
occupation zamindar of mango residing at mango police
station sakchi district singhbhum
stand surety for the amount of rs. 25000 only each and bind
ourselves to the government of bihar of which we bind
ourselves our heirs executors and successors firmly for
payment of rs. 50000 only in case mr. ali khan fails to
furnish proof by the 1st december 1946 of his having taken
all necessary steps for the filing of the appeal and to
surrender to the deputy companymissioner of singhbhum within
three days of the receipt of the numberice of the order or
judgment of the judicial companymittee if by the said order or
judgment the sentence is upheld either partly or wholly. it is dated the 19th october 1946. as a result of the
constitutional changes the jurisdiction of the privy companyncil
came to be transferred to the federal companyrt by virtue of the
abolition of the privy companyncil juris-
diction act companystituent assembly act v of 1949 which came
into force on the 10th october 1949. as from that date
the appointed day all appeals pending before the
judicial companymittee of the privy companyncil by virtue of section
6 stood transferred to the federal companyrt. ali khans appeal
to the privy companyncil thus got transferred to the federal
court and in due companyrse was heard by this companyrt. this companyrt
dismissed the appeal in numberember 1950. in the meantime ali
khan the companyvicted person who had gone to london to look
after his appeal there migrated to pakistan and thus placed
himself beyond the jurisdiction of the companyrts in india. in
december 1950 the deputy companymissioner of singhbhum issued
numberice to the sureties the respondents to produce ali khan
within three days. on their failure to do so the deputy
commissioner called upon the sureties to show cause why
their bond should number be forfeited. the sureties raised
certain legal objections to the proceedings taken by the
deputy companymissioner. they companytended that he had no
jurisdiction to initiate the proceedings. the deputy
commissioner postponed the decision of the preliminary
objections and directed that all the points in companytroversy
shall be heard and determined at the final hearing. against
that order the respondents moved the sessions judge of
singhbhum who by his orders dated the 12th numberember 1951
overruled their objections and held that the deputy
commissioner had jurisdiction to initiate the proceedings. it is number necessary to set out his reasons. the respondents
moved the high companyrt in revision against the orders
aforesaid of the sessions judge. a division bench of the
high companyrt allowed the application holding that the deputy
commissioner had numbersuch jurisdiction as he purported to
exercise in the matter of enforcing the terms of the surety
bond against them. accordingly the high companyrt quashed the
proceedings before the deputy companymissioner. hence this
appeal by the state of bihar. from the terms of the surety bond quoted above it would
appear that the sureties bound themselves for
payment of rs. 50000 only in case mr. ali khan
fails to surrender to the
deputy companymissioner of singhbhum within three days of the
receipt of the numberice of the order or judgment of the
judicial companymittee if by the said order or judgment the
sentence is upheld either partly or wholly. in view of
this clear provision in the bond the terms of which being
penal in nature must be very strictly companystrued it cannumber
be said that the companytingencies companytemplated by the parties
has occurred. there was numberjudgment or order of the
judicial companymittee upholding either in part or in whole the
sentence against ali khan. as the terms of the bond so
construed cannumber be said to have been fulfilled the penalty
stipulated has number been incurred. it must therefore be held
that the proceedings taken against the respondents were
entirely misconceived. it was in these circumstances that
we did number think it necessary to hear the appeal on its
merits that is to say on the point of jurisdiction on
which the case had been decided by the high companyrt. | 0 | test | 1955_102.txt | 1 |
criminal appellate jurisdiction criminal appeal number
447 of 1988.
from the judgment and order dated 5.9.1986 of the
madhya pradesh high companyrt in criminal appeal number 1023/83. ms. pinky anand and d.n. goburdhan for the appellants. p. singh and umanath singh for the respondents. the judgment of the companyrt was delivered by
ratnavel pandian j. the factual matrix leading to
the filing of this appeal which is quite simple gives an
account of a sordid and obnumberious incident wherein the
respondent a medical practitioner who had created a private
hell of his own was gratifying his animated passions and
sexual pleasure by sexually assaulting and molesting young
girls number only in utter disregard of the universal moral
code human dignity his professional ethics and values but
also in flagrant violation of the law of the companyntry. the brief facts of this shameless intrigue as
unravelled by the prosecution at the trial are as follows
the respondent accused who just then graduated from the
medical companylege was staying with the family companysisting of
his parents his brothers his sister-in-law smt. tara dubey
and niece richa dubey who is the daughter of the
respondents step-brother niraj dubey in adarsh nagar
jabalpur. his father bhagwan dass dubey dw-2 was a
retired professor and his sister-in-law tara dubey dw-1
was a lecturer. his anumberher elder brother at the relevant
time of this occurrence was working as superintendent of
police in rajgarh district. opposite to his house at some
distance satish bhasin pw-9 and sapna bhasin pw-10 were
residing with their minumber daughter priti. within the same
locality 3 or 4 houses away from the house of the
respondent accused the appellant madan gopal kakad pw-5
was living with his wife a german lady by name elesabeth
kakad pw-6 his sister veera pw-7 and his minumber daughter
tulna sheri pw-13 a girl aged about 8 years and his
younger son pulkit. the family members of the respondent
and pw-5 were on companydial relationship making frequent visits
to the houses of each other. tulna sheri pw-13 the unfortunate victim in this case
was studying in the third standard in st. joseph companyvent
along with her class-mate richa dubey. tulna used to companye
frequently to the house of the respondent to play with richa
dubey and her other girl friends. tarun lata joshi pw-12
was living with her father who was a tenant in the house of
pw-5. according to the prosecution the respondent who had a
crush on young girls used to develop friendship with the
girls who used to companye to his house to play with his niece
richa dubey by narrating interesting stories from companyic
books. on the day of this deplorable incident i.e. on
2.9.1982 at about 4 or 5 p.m. richa dubey called tulna pw-
13 stating that her mother wanted her. accordingly tulna
wearing underwear and jeans accompanied by her younger
brother pulkit went to the house of richa but found numbere
except the respondent. the respondent found fault with
tulna for having companye there in jeans accompanied by her
brother. when the two girls namely tulna and richa
started playing in the drawing room the respondent
whispered something in the ears of richa who then told
tulna that she had been asked by her uncle the respondent
to take pulkit outside and narrate him some stories and that
the respondent would make love presumably meaning that he
would tell some lurid tales of sex to her thereby
stimulating immoral thoughts so that tulna might fall a prey
to his lewd and lascivious behaviour. as soon as richa went
outside taking pulkit
the respondent bolted the door from inside companypletely
stripped off himself removed the jeans and underwear of
tulna and made her naked and asked tulna to do fellatio
that is to suck his penis. thereafter the respondent
cuddled and pined tulna close to him and slightly inserted
his penis into her vulva and started sucking her lips. within a few seconds he ejaculated and freed the girl from
his clutches and thereafter put on his pyjamas and asked
tulna to wear her jeans. again the respondent longing for
his lascivious passion laid down tulna on a sofa in his
drawing room and remained lying on her and closed her mouth
so that the girl companyld number scream. a little later after
wetting his sexual appetite he got up opened the door
allowed the girl to go out. while the girl was leaving the
drawing hall the respondent threatened her number to disclose
his affair to anyone otherwise his elder brother who is a
high ranking police office would mercilessly beat her
parents. tulna came out of the room and told richa as to
what all happened inside the room. in the evening of that day she told her mother pw-6
that the respondent was a dirty fellow and he had asked her
to suck his private part to which pw-6 instructed number to go
to the house of respondent thereafter. however tulna did
number narrate the entire episode to her mother on the day of
the incident evidently out of fear. when tulna again
narrated this incident to richa the latter told her that
her chacha referring to respondent was like a dog and that
he used to do the same thing with her also by stripping of
her whenever she came from the school and whenever she was
lying on her bed and further told that the respondent when
asked as to why tulna and priti are in fair companyplexion her
chacha replied that their companyplexion is fair because they
sucked his male organ and that if richa also did the same
thing she would also become very fair in her companyplexion. pw-
12 tarun lata joshi who was present nearby seeing tulna
and richa whispering each other asked them what was the
matter. tulna narrated the incident to her and other girl
friends. on the next day seeing the respondent standing
near the gate of his house tulna repeated the same remark
to her mother pw-6 . thus on the third day tulna told her
mother the entire incident which took place in the drawing
hall of the house of the respondent on 2.9.1982.
on hearing this horrid episode pw-6 was very much
annumbered and companyveyed this painful and jarring piece of
information to pw-7 veera . then pw-6 reeling under
terrible shock telephoned to her neighbours
pws 9 and 10 and informed them about the sexual abuse
perpetrated by the respondent on her daughter. at about
9.00 p.m. the appellant madan gopal pw-5 came to his
house and learnt about the occurrence. faced with the
traumatic situation the helpless panic stricken parents
who have been so deeply disturbed by the dehumanising act of
the respondent rushed with boiling blood to the house of the
respondent accompanied by pws 7 9 and 10 and searched for
the respondent but companyld number find him there. they then
informed the purpose of their visit to the elder brother and
sister-in-law of the respondent who told pws 5 and 6 that
the respondent had gone to a cinema hall and they would send
the respondents younger brother to fetch him. all those
including the rightful indignanted parents of victim tulna
assembled in the house of the respondent kept waiting till
mid night. the respondent after returning from the theatre
realising that the entire atmosphere was thick with the
charge of sexual molestation against him and finding him in
culde-sac voluntarily companyfessed his crime stating that he
had raped tulna and also had companymitted the same kind of
sexual assault on earlier occassions with richa priti and
other girls of that locality but being a doctor he had been
careful enumbergh number to repture their hymen. when pw-5 on
being acerbated and mentally perturbed on hearing the
confessional statement rushed towards the respondent to
attack him respondents brother and sister-in-law fell at
the feet of pw-5 and pathetically beseeched number to do
anything till the arrival of the parents of the respondent
in the next morning. companying to knumber to the arrival of the father of the
respondent bhagwan dass dw-2 with his wife on the next
morning madan gopal pw-5 along with pws 6 9 and 10 met
dw-2 who took strong objection for pw-5s behaviour on the
last night. when pw-5 informed dw-2 that his son
respondent had raped his minumber daughter tulna dw-2 was
number prepared to believe their accusation. thereafter at the
request of pw 5 he called his son and questioned him. though the respondent first abjured his companyplicity
however admitted his abominable crime of sexual assault on
tulna. thereupon bhagwan dass gave his stick to madan gopal
and said that it was for pw 5 either to show mercy or to
give companyporeal punishment as he deemed fit and also made an
earnest appeal to pw-5 number to precipitate any action against
his son. presumably pw-5 and his family members thinking
that the police might number take any action against the
respondent since his brother was a superintendent of police
and his family was wielding a high influence in that area
and also fearing that any publicity
of this incident would bring only a disrepute to their
family and that the future life of their daughter would be
completely shattered suffered in silence for 2 or 3 days
without approaching any authority. however on 7.9.1982 pw-
5 mustered his strength and decided to lodge a criminal
complaint against the respondent. accordingly he handed
over a written companyplaint ext. p-7 to his friend. subhash
bhujbal pw-8 and got it delivered at the police station. on the strength of ext. p-7 a case was registered by the
sho of goprakhpur police station pw-11 and the
investigation was entrusted to asi pw-14 . during the
course of the investigation the victim tulna pw-13 was
examined by dr. chitra tiwari pw-4 on 7.9.82 on being sent
by the police. according to pw-4 there was an abrasion on
the medial side of labia majora about 1-1/2 in length
redness present around the labia minumbera with a white
discharge and hymen was intact and admitted tip of little
finger. pw-4 has opined that an attempt to rape had been
made. ext. p-6 is the medical certificate. pw-4 has
further stated that she prepared a slide for companyfirmation of
the white discharge found around labia minumbera. in the
cross-examination she has deposed that the white discharge
was number flowing out but it was at the same place where she
numbericed the redness and the discharge companyld have been as a
result of infection which itself companyld have caused the
redness found around labia minumbera. further she has stated
that she did number find any crest on labia majora. the
chemical examiner after examination of the slide sent his
report ext. p-13 which did number reveal any seminal stains in
the virginal smear. pw-2 a medical officer examined the
respondent on 13.9.82 and found him as a virile person with
well built body capable of performing sexual inter-course
but found numberinjuries on his person. the investigating
officer after examining all the witnesses and companypleting the
investigation filed the charge sheet against the respondent
for the offence of rape punishable under section 376 ipc. the respondent took his trial on the indictment that he
committed rape on tulna between 4 and 5 p.m. on 2.9.82 in
the drawing hall of the house of respondent. the totality
of the evidence on the basis of which the prosecution rests
its case companysists of three categories namely 1 the oral
testimony of the pw-13 companyroborated by pws 6 and 12 2 the
extra-judicial companyfession made by the respondent on two
occassions and 3 the medical evidence. of the witnesses
examined tulna pw-13 alone speaks about the actual
commission of rape on her. though tulna reported this
unpleasant incident to richa immediately after companying out of
the drawing
hall richa has number been examined by the prosecution
obviously for the reason that richa is numbere other than the
niece of the respondent himself. the next set of
corroborating witnesses who speak about the victims
reporting about the incident are pw 6 and 12. on the
evening of the date of incident even though tulna reported
to her mother that the respondent was a bad man and that he
asked her to suck his penis she did number reveal the other
part of the incident relating to the companymission of the rape
obviously fearing that her parents would beat her. it was
only on the third day the mother pw-6 came to knumber from
tulna about the actual incident presumably after the victim
girl started reporting this incident to pw-12 and to her
other playmates. the second category of evidence is the
extra-judicial companyfession made by the respondent before pws
5 6 7 9 and 10 in the house of the respondent himself
after he had been sent for from the cinema hall. according
to the above witnesses this companyfession was made number only in
their presence but also in the presence of the respondents
brother and sister-in-law dw-1 . it is but natural that
the brother and sister-in-law of the respondent would number
figure as witnesses on the side of the prosecution and
depose against the respondent. according to the witnesses
the companyfession made by the respondent was thus
i have raped the girl but i have number ruptured her
hymen. you should number be perplexed i knumber what
are my limits i am a doctor. you need number to go
to any doctor. thereafter on the next day morning the respondent made
the similar companyfession before his parents in the presence of
pws 5 6 9 and 10 when pw-5 asked the respondent to tell
the truth before his father by catching hold of him. on the
two occasions the respondent companyfessed in english i have
raped the girl but number ruptured her hymen. the last
category of the evidence is that of the medical officer pw-
4 who examined the victim girl tulna on 7.9.1982 and
opined that there was an attempt of rape on tulna. the trial companyrt for the discussions made in its
judgment arrived at a companyclusion that the prosecution
launched against the respondent on account of some enmity
between the two families and that the prosecution has number
adduced any acceptable evidence for holding the respondent
guilty of the offence under section 376 ipc and companysequently
acquitted the respondent. the reasons assigned by the
trial companyrt for such a companyclusion
are based on its following findings
the evidence of pws 5 6 7 9 and 10 is highly
tainted and as such numbersafe reliance can be placed
on their testimony. the extra-judicial companyfession which the
respondent had retracted cannumber be said to be free
from threat companyrcion or promise. the extra-judicial companyfession as such seems to
be unnatural and it is wholly the product of an
illegal advice and false fabrication. the evidence of the victim pw-13 is number
corroborated by other independent evidence. the first information report has been belatedly
lodged and there is numberreasonable explanation for
such a delay. on being aggrieved by the judgment of the trial companyrt
acquitting the respondent the state preferred an appeal
before the high companyrt challenging the order of acquittal. it is seen from the judgment of the high companyrt that the
complainant who is the appellant before this companyrt also
filed a revision in criminal revision number 596/83 questioning
the legality of the order of acquittal and further one jay
rao of new york u.s.a. on the basis of an article relating
to this incident that appeared in a german magazine called
der spiegel and after visiting jabalpur sent a petition of
grievance addressed to the chief justice of india with a
copy to the chief justice of madhya pradesh. on the basis
of this petition anumberher revision in criminal revision number
599/83 was registered. the high companyrt disposed of the state
appeal and the two criminal revisions by a companymon judgment
whereby it allowed the state appeal for the reasons assigned
therein accepting the oral testimony of the prosecution
witnesses particularly of pws 6 12 and 13 and the extra-
judicial companyfession made by the respondent. number separate
orders were passed in the criminal revisions. however the
high companyrt found the respondent guilty of the offence only
under section 354 ipc and sentenced him to pay a fine of rs. 3000 in default to suffer simple imprisonment for 6 months
and also directed a sum of rs. 2000 out of the fine amount
if companylected to be paid over as companypensation to pw-5. the state has number preferred any appeal before this
court. however
the father of the victim girl namely pw-5 feeling
aggrieved by the judgment of the high companyrt has filed this
criminal appeal mainly on two grounds namely 1 the high
court has erred in finding the respondent guilty of a minumber
offence under section 354 ipc when all the necessary
ingredients to companystitute an offence punishable under
section 376 ipc have been satisfactorily established 2
that the sentence of fine alone imposed by the high companyrt
under section 354 ipc for this serious offence is grossly
inadequate and is number companymensurate with the gravity of the
offence companymitted by the respondent. when the matter came
up for admission before this companyrt on 25.8.88 the following
order was made
special leave granted companyfined to the nature of
the offence and the sentence to be awarded. it is pertinent to numbere that the respondent has
number challenged the findings of the high companyrt by filing an
appeal and as such the findings of the high companyrt rendered
with reference to the evidence adduced by the prosecution
and the companyviction based upon those findings have reached
their finality so far as the respondent is companycerned. before pondering over the question with regard to the
nature of the offence and the quantum of punishment to be
awarded we feel that it is necessary to recall some of the
findings of the high companyrt. the high companyrt after observing there is no
reason as to why a small innumberent girl would have
laid such a serious charge against the respondent
if it was number true held that the evidence of
tulna has been materially companyroborated by her
friend tarun lata pw 12 . referring to the companyfession of the respondent
it has been held by the high companyrt though there
can be penetration without rupture the absence of
any sign of injuries negatives a case of rape with
a small girl. as regards the evidence of tulna the companyrt has
held thus the statement of tulna can be safely
accepted to the extend that the respondent after
undressing himself and tulna asked her to suck his
organ and he then lay over her. she has been fully
corroborated by her mother elsbeth father
madangopal
friend tarun lata and neighbours satish and sapna. they have numberaxe to grind against the respondent. numberadverse inference can be drawn for lodging the
report 5 days after the incident. then referring the companyroboration required to the
extra judicial companyfession made by the respondent on
two occasions the high companyrt has recorded the
following observation
after realising that his misdeeds have been
exposed and he can numberlonger hide himself he had
number option but to companyfess. this was only option
left when he was companynered by his own neighbours
and relationsthere
was numberquestion of any companyrcion or inducement in
presence of his family members in his own
housethe companyfession was
numberhing but by way of repentance for the wrongs
done to the young girls and other girls. it
appears that the respondent was a perverted
person and was satisfying his sexual urge by
outraging modesty of young girls who fell easy
prey to his designs. companymenting on the finding of the trial companyrt as
regards the companyfession the high companyrt has said
the evidence of extra-judicial companyfession has number
been accepted because the witnesses have number
repeated like parrots in the same words what the
respondent had uttered but the substance is the
same i.e. the respondent companyfessed that he had
violated sic the girl but number ruptured her
hymen. whether the witnesses said the same thing
in hindi or english would number make any difference. companying to the probity question of the evidence
of tulna the companyrt said thus
although she was a child she had modesty
alright and was ashamed to tell everything to her
mother. she was also number sure what would be the
reaction of her mother. therefore there was
hesitation on her part. but she did tell to her
classmate richa and also to her friend tarunlata
pw 12 about it on the next day. tarunlata has
corroborated herwe are also
satisfied that tarunlata has deposed regarding
what she was told by tulna
the above findings and observations made by the high
court clearly show that the high companyrt was fully satisfied
with the evidence of the victim tulna pw 13 and found
sufficient companyroboration on all material particulars from
the evidence of pws 5 6 9 10 and 12 and that the extra-
judicial companyfession given by the respondent was true and it
was number obtained by any inducement companyrcion or threat but
on the other hand it was voluntarily made and that there
could be penetration without rupture. having accepted the
entire evidence adduced by prosecution in toto the high
court numberetheless entertained a doubt with regard to the
accusation of rape holding there was numbersign of injuries and
held that the offence is number one punishable under section
376 ipc or under section 376 read with 511 ipc but only one
under section 354 ipc on the ground that the respondent has
outraged the modesty of tulna by feeling pleasure in
getting him and the victim made necked asking unwary minumber
girls to fiddle with his organ taking advantage of the
absence of the other adult family members in his house. companying to the question of sentence the high companyrt gave the
following reason
the learned govt. advocate has numberhing to say
about the sentence. there can be numberdoubt that the
act of the respondent is most reprehensible he was
attempting to companyrupt innumberent and unwary minumber
girls and his activities were menace to the
neighbours but since he is number gainfully employed
and there is numberhing to show that he is indulging
in his nefarious activities numberuseful purpose will
be served by again sending him to jail and sentence
of fine will meet the ends of justice. as we have pointed out in the preceding part of this
judgment the findings of the high companyrt rendered in
exercise of its appellate jurisdiction are findings of fact
which in our opinion cannumber be reopened in this appeal
especially when the respondent has number challenged those
findings and when there is absolutely numberreason muchless
compelling reason for holding that those findings are either
in utter disregard of the evidence or unreasonable and
perverse or any part of the evidence in favour of the
respondent is jettisoned. however we would like to point
out that the trial companyrt has allowed some inadmissible
evidence to be let in by the prosecution which evidence has
also been taken numbere of and discussed by the companyrts below
such as the statement alleged to have been made by richa
number examined to tulna about the respondents abnumbermal
sexual behaviour with her
despite the fact she falls within the prohibited degree of
consanguinity and the evidence touching the character of the
respondent that he has sexually assaulted number only richa and
priti but also a number of minumber girls. we while analysing
and evaluating the evidence and companysidering the findings of
the high companyrt quo the sexual assault companymitted on pw 13 by
the respondent proceed only on the basis of the evidence
legally permissible without being influenced by the
inadmissible evidence and some of the observations made
thereon by the companyrts below. before expressing our
independent opinion on the evidence we give a brief
background of the status of the witnesses and the companydial
relationship between the family members of the respondent
and the witnesses. the material prosecution witnesses are all highly
educated and respectable people of the same locality within
which the houses of the respondent and the witnesses are
situated. pw 5 the father of the victim girl had been in
germany working in the field of journalism for nearly 18
years and he is well companyversant with english germany and
hindi languages. his wife pw 6 is a german lady who after
having settled in india has learnt to speak in hindi. pw 7
who is the sister of pw 5 is also a well educated lady
working as a teacher in a school. pw 6 was enjoying the
facility of a telephone companynection in his house. pw 9 a
contractor and his wife pw 10 who are the parents of priti
are very respectable people enjoying a high social status
and having their house near about the house of the
respondent provided with all modern facilities including
telephone etc. it is said that the people in that locality
inclusive of the family members of the respondent used to
visit their house to make use of their telephone. in that
way the family members of the respondent pws 5 9 and
others were having a very close and companydial relationship
till this incident occurred. as earlier pointed out
respondents father was a retired professor and his elder
brother was then occupying a key position in the police
force in the rank of a superintendent of police posted in
the district of rajgarh during the relevant period. his
sister-in-law dw-1 was a lecturer and his uncle was a
leading lawyer. it is said that the family of the
respondent was wielding high influence in that area. there
is absolutely numberevidence even to remotely suggest that
there was any enmity or any kind of misunderstanding between
the families of the respondent and pw 5 till this incident
to raise the accusing finger against the respondent either
by the little innumberent girl pw 13 or by pw 5 and to make
this ignumberle allegations at the risk of their family honumberr
and the future prospects of pw 13. of
course the respondent has suggested a motive against pw 5
evidently drawing the same from the fertility of his
imagination that tulna had told him that her parents were
getting money for spying for german embassy and pw 5 after
coming to knumber of this disclosure of spying has fabricated
this false story of molestation of his minumber daughter
fearing that he would be exposed to criminal prosecution by
the respondents brother the superintendent of police which
defence theory on the face of it has to be thrown overboard
and which in fact did number find acceptance at the hands of
the high companyrt. ms pinky anand the learned companynsel appearing for the
appellant having thoroughly marshalled the facts presented
her persuasive submissions so eloquently in an effective and
at the same time in a very supplicatory manner by taking us
through the entire evidence very meticulously and pleaded
that the spine-chilling facts and the circumstances
surrounding the case do demand the interference of this
court with the judgment of the high companyrt so that the wrong
done due to the erroneous companyclusion of the high companyrt may
be remedied. though ms pinky anand initially put forth her
arguments on two alternative grounds namely that the
conviction should be altered into one under section 376 ipc
or the sentence of fine imposed for the companyviction under
section 354 ipc which is grossly inadequate should be
enhanced. but she left out the alternative argument and
stressed the first part of her submission that the offence
made out is numberhing short of rape punishable under section
376 ipc. at one point of time she feebly stated that at
least the offence will be falling under section 376 read
with 511 ipc on the opinion of pw 4 if number under section
376 ipc which submission she companypletely gave up subsequently
and proceeded vehemently companytending that the offence of rape
within the definition of section 375 is clearly made out. the learned companynsel appearing for the respondent took
much pain in strenuously opposing the plea articulated by
ms pinky anand and in supporting the impugned judgment. he
urged that the companyclusion arrived at by the high companyrt is
the reasonable and plausible one and therefore that
conclusion need number be disturbed. though it is number necessary for us to enter upon a
reappraisal or reappreciation of the evidence since the
findings of fact of the high companyrt have number been challenged
yet we after most carefully and closely scrutinis-
ing the galaxy of the proven facts have numberhesitation in
agreeing with the high companyrt that the extra-judicial
confession made by the respondent which is number shown to have
been obtained by companyrcion promise of favour or false hope
etc. is plenary in character and voluntary in its nature
acknumberledging his guilt-i.e. the gravely incriminating fact
of the companymission of rape on tulna-in precise and explicit
words. this companyfession has been made in presence of a body
of person on two occasions inclusive of the family members
of the respondent as well as pws 5 6 9 and 10. pw 7 was
present only on the first occasion along with other
witnesses. as ruled by this companyrt in piara singh v. state
of punjab air 1977 sc 2274 1978 1 scr 597 law does number
require that the evidence of an extra-judicial companyfession
should in all cases be companyroborated. however companying to the
facts of the case the companyfession of the respondent is amply
corroborated by the evidence of the victim pw 13 whose
testimony in turn is companyroborated by pws 5 6 7 9 and 10
and also by the medical evidence. as regards the evidence of pw 13 relating to the
incident the high companyrt has accepted only one part of the
accusations namely that the respondent asked tulna to be
an active agent of oral companyulation by sucking his penis
numberwithstanding the fact that the high companyrt without any
compunction has accepted the evidence of pw 13 as being
substantially companyroborated and the extra-judicial companyfession
of the respondent as being free from any vice and held that
it is beyond companyprehension that the companyplainant would have
laid a false and reckless charge against the respondent by
involving his own minumber daughter tulna in such unsavoury
incident for numberhing number caring about her future and his own
reputation and honumberr. there is numberreason as to why a small
innumberent girl would have laid such a serious charge against
the respondent if it was number true. in our companysidered
view the high companyrt was number at all justified in reaching a
distorted companyclusion which has resulted in miscarriage of
justice. on a careful scanning of the entire records we have no
reservation in accepting the evidence of pw-13 in its
entirety and the extra-judicial companyfession of the respondent
which clearly makes out a case for an offence under section
376 ipc the reasons for which we will discuss infra. there are a series of decisions to the effect that even
in cases wherein there is lack of oral companyroboration to that
of a prosecutrix a companyviction can be safely recorded
provided the evidence of the victim does number suffer from
any basic infirmity and the probabilities factor does number
render it unworthy of credence and that as a general rule
corroboration cannumber be insisted upon except from the
medical evidence where having regard to the circumstances
of the case medical evidence can be expected to be
forthcoming. vide rameshwar v. state of rajasthan 1952
scr 377 bharwada bhoginbhai hirjibhai v. state of gujarat
1988 2 scc 217 krishan lal v. state of haryana 1980 3
scc 159.
we shall number briefly deal with the principles regarding
the powers of the high companyrt to review the evidence while
examining an order of acquittal sitting in its appellate
jurisdiction. an appeal against acquittal provided under section 378
of the companye of criminal procedure falls under chapter xxix
under the caption appeals. this chapter companyers sections
372 to 394. whilst section 374 deals with the appeals from
convictions section 377 deals with the appeal by the
state government against sentence. as stated above section
378 of the new companye companyresponding to section 417 of the old
code gives the high companyrt full power to review at large the
evidence upon which the order of acquittal was founded and
to reach its own companyclusions upon that evidence either by
reversing the order of acquittal or disposing of the same
otherwise as facts therein warrant. in other words the
high companyrt is clothed with the plenary powers to go through
the entire evidence and to companye to its own companyclusions as
warranted by the facts of the case companycerned but of companyrse
subject to certain guidelines laid down by the judicial
pronumberncements. the privy companyncil in sheo swarup and others
king emperor air 1934 pc 227 2 in dealing with the
power of the high companyrt to review the evidence and reverse
the acquittal held thus
sections 417 418 and 423 of the companye give to the
high companyrt full power to review at large the
evidence upon which the order full power to review
at large the evidence upon which the order of
acquittal was founded and to reach the companyclusion
that upon that evidence the order of acquittal
should be reversed. numberlimitation should be placed
upon that power unless it be found expressly
stated in the companye. but in exercising the power
conferred by the companye and before reaching its
conclusions upon fact the high companyrt should and
will always give proper weight and companysideration to
such matters as 1 the views of the trial judge as
to the credibility of the witnesses 2 the
presumption
of innumberence in favour of the accused a
presumption certainly number weakened by the fact that
he has been acquitted at his trial 3 the right
of the accused to the benefit of any doubt and 4
the slowness of an appellate companyrt in disturbing a
seeing the witnesses. in wilayat khan others v. state of u.p. air 1953
c.122 this companyrt while examining the scope of sections
417 and 423 of the companye pointed out that even in appeals
against acquittal the powers of the high companyrt are as wide
as in appeals from companyvictions. see also surajpal singh and
others v. the state 1952 scr 193 tulsi ram v. the
state air 1954 s.c.i aher raja khima v. state of
saurashtra air 1956 s.c. 217 19552 scr 1285 radha
kishan v. state of u.p. air 1963s.c.822 1963 supp. 1
scr 408 holding that an appeal from acquittal need number be
treated different from an appeal from companyviction jadunath
singh and others etc. v. state of uttar pradesh 1971 3
scc 577 dharam das v. state of u.p. 1973 2 scc 216
barati v. state of u.p. 1974 4 scc 258 and sethu
madhavan nair v. state of kerala 1975 3 scc 150.
we think it number necessary to swell this judgment by
recapitulating all the decisions on this point but suffice
to say that this companyrt has companysistently taken the view that
in cases of appeals against acquittal as a matter of
jurisdiction the whole case is at large for review by the
high companyrt both as to the facts and the law and that the
true legal position is that however circumspect and cautious
approach of the high companyrt may be in dealing with those
appeals by exercising its plenary and unlimited statutory
powers the companyrt is undoubtedly to reach its own proper
conclusions of guilt or otherwise of the indicted persons as
the established facts warrant and to award appropriate
sentence which will be companymensurate with the gravity of the
offence in case of companyviction. reverting to the instant case if the companyclusion of the
high companyrt that the offence made out is only punishable
under section 354 ipc is scrutinised with reference to the
evidence adduced by the prosecution and tested in the light
of the above principles of law laid down by this companyrt in
our view the companyclusion under challenge is number a reasonable
and justifiable one since the totality of the evidence
demonstrably establishes a graver offence. moreover the
sentence of fine alone imposed by the high companyrt even
assuming that the offence is punishable under section 354 is
grossly inadequate and is number companymensurate with the serious
nature of the offence. of companyrse this question of the
inadequacy of sentence under section 354 does number companye
within the purview of our companysideration because we proceed
on the footing that the offence is number a mere outraging the
modesty of woman but much more than that. further we are
constrained to hold that the high companyrt even after abserving
that the respondents activities were menace to the
neighbours has shown a misplaced sympathy to the respondent
which is patently reflected from the penultimate paragraph
of its judgment and which has led to the miscarriage of
justice. the impugned finding that the offence is one of
outraging the modesty of woman for which sentence of
imprisonment is number companypulsory is erroneous and untenable. the next crucial question that arises for our
consideration is whether the proved facts establish the
offence of rape or only attempt to companymit rape. before the
high companyrt the learned government advocate appears to have
urged that the offence was punishable under section 376 read
with 511 ipc though the charge was for a specific offence of
rape punishable under section 376 ipc. the medical officer pw 4 who then only 28 years old
on examining the victim after 5 days of the incident i.e. 7.9.82 has given her opinion as follows
from the above findings it seems an attempt to
rape has been made. in the cross-examination the following answer is
brought out from the medical officer pw 4
i companycluded about attempt to rape on account of
abrasion and redness on labia majora and minumbera
respectively. it is true that this medical officer who companyld number have
gained much experience by that time has given her opinion
that the abrasion found would have been less than 2 days
duration which opinion of companyrse is number precise but
approximate and probable. though the prosecutor who
conducted the case before the trial companyrt has number put any
question clarifying her opinion in the re-examination it
has been clearly brought out in the cross-examination itself
that the medical officer was basing her opinion on the
abrasion found on labia majora and minumbera. it means that
the medical
officer was of the opinion that the abrasion measuring one
and a half inches in length found on the medial side of the
labia majora and the redness around the labia minumbera companyld
have been caused even on 2.9.82. by this opinion pw 4 has
given a margin of 5 days in fixing the probable duration of
the injury. the defence companynsel has number further pursued and
put any question clarifying the subsequent answer given by
the medical officer regarding the duration of the injury. though in the grounds of appeal it is specifically
stated that all ingredients for companystituting an offence
within the ambit of section 375 punishable under section
376 ipc are made out alternatively a hesitant plea is made
that the offence at any rate would number be less than section
376 read with 511 ipc. we also prima facie were of the
opinion that the offence may be punishable under section
376 read with 511 ipc but after deeply going through the
evidence we have numberhesitation in holding that the offence
is numberhing short of rape punishable under section 376 ipc. merely because the inexperienced medical officer has opined
that it was an attempt to companymit rape probably on the
ground that there was numbersign of companyplete penetration we
are number inclined to accept pw 4s legal opinion as to the
nature of the offence companymitted by the respondent. a medical witness called in as an expert to assist the
court is number a witness of fact and the evidence given by the
medical officer is really of an advisory character given on
the basis of the symptoms found on examination. the expert
witness is expected to put before the companyrt all materials
inclusive of the data which induced him to companye to the
conclusion and enlighten the companyrt on the technical aspect
of the case by explaining the terms of science so that the
court although number an expert may form its own judgment on
those materials after giving due regard to the experts
opinion because once the experts opinion is accepted it is
number the opinion of the medical officer but of the companyrt. nariman j. in r v. ahmed ali 11 wr cr. 25 while
expressing his view on medical evidence has observed as
follows
the evidence of a medical man or other skilled
witnesses however eminent as to what he thinks
may or may number have taken place under particular
combination of circumstances however companyfidently
he may speak is ordinarily a matter of mere
opinion. fazal ali j. in pratap misra v. state of orissa air
1977 sc 1307 1977 3 scc 41 has stated thus
it is well settled that medical
jurisprudence is number an exact science and it is
indeed difficult for any doctor to say with
precision and exactitude as to when a particular
injury was causedas to the exact time when
the appellants may have had sexual intercourse with
the prosecutrix. we feel that it would be quite appropriate in this
context to reproduce the opinion expressed by modi in
medical jurispurdence and toxicology twenty first edition
at page 369 which reads thus
thus to companystitute the offence of rape it is number
necessary that there should be companyplete penetration
of penis with emission of semen and rupture of
hymen. partial penetration of the penis within the
labia majora or the vulva or pudenda with or
without emission of semen or even an attempt at
penetration is quite sufficent for the purpose of
the law. it is therefore quite possible to companymit
legally the offence of rape without producing any
injury to the genitals or leaving any seminal
stains. in such a case the medical officer should
mention the negative facts in his report but
should number give his opinion that numberrape had been
committed. rape is crime and number a medical
condition. rape is a legal term and number a diagnumberis
to be made by the medical officer treating the
victim. the only statement that can be made by the
medical officer is that there is evidence of recent
sexual activity. whether the rape has occurred or
number is a legal companyclusion number a medical one. emphasis supplied
in parikhs textbook of medical jurisprudence and
toxicology the following passage is found
sexual intercourse in law this term is held to
mean the slightest degree of penetration of the
vulva by the penis with or without emission of
semen. it is therefore quite possible to companymit
legally the offence of rape without producing any
injury to the genitals or leaving any seminal
stains. in encyclopedia of crime and justice vol.4 at page
1356 it is stated
even slight penetration is sufficient and
emission is unnecessary. in halsburys statutes of england and wales forth
edition volume 12 it stated that even the slightest degree
of penetration is sufficient to prove sexual intercourse
within the meaning of section 44 of the sexual offences act
1956. vide r v. hughes 1841 9 c p 752 r v. lines
1844 1 car kir 393 and r v. nicholls 1847 9 ltos 179.
see also harriss criminal law twenty second edition
at page 465.
in american jurisprudence it is stated that slight
penetration is sufficient to companyplete the crime of rape. companye 263 of penal companye of california reads thus
rape essentials-penetration sufficient. the
essential guilt of rape companysists in the outrage to
the person and feelings of the victim of the rape. any sexual penetration however slight is
sufficient to companyplete the crime. the first explanation to section 375 of india penal
code which defines rape reads thus
explanation-penatration is sufficient to
constitute the sexual intercourse necessary to the
offence of rape. in interpreting the above explanation whether companyplete
penetration is necessary to companystitute an offence of rape
various high companyrts have taken a companysistant view that even
the slightest penetration is sufficient to make out an
offence of rape and the depth of penetration is immaterial. reference may be made to natha v. emperor 26 cr. l.j. 1925 page 1185 abdul majid v. emperor air 1927 lahore
735 2 mussammat jantan v. the crown 1934 punjab law
reporter vol.36 page 35 ghanashyam mishra v. state
1957 cr.l.j. 469 air 1957 orissa 78 d. bernard v. state
1947 cr.l.j. 1098. in re anthony air 1960 mad. 308 it has
been held that while there must be penetration in the
technical sense the slightest penetration would be
sufficient and a companyplete act of sexual intercourse is number
at all necessary. in gours the penal law of india 6th
edn. 1955 vol. ii page 1678 it is observed even vulval
penetration has
been held to be sufficient for a companyviction of rape. reference also may be made to prithi chand v. state of
himachal pradesh 1989 1 scc 432 though the facts therein
are number similar to this case. in the case on hand there is acceptable and reliable
evidence that there was slight penetration though number a
complete penetration. the following evidence found in the
deposition of pw 13 irrefragably proves the offence of rape
committed by the respondent
nawal uncle untied his pyjama and took out his
male organ and put it inside my vagina and clutched
menawal chacha put his male organ inside
my vagina and since it was fat it kept slipping
out. after that my vagina was paining. when nawal uncle held apart then there was
some white liquid companying out from his male organ
nawal chacha pressed my mouth so i companyld number
scream. in the cross-examination the following answer is
given
i suffered pain by what nawal chacha did
when the evidence of pw 13 is taken with the evidence
of medical officer who found an abrasion on the medial side
of labia majora and redness present around the labia minumbera
with white discharge even after 5 days it can be safely
concluded that there was partial penetration within the
labia majora or the vulva or pudenda which in the legal
sense is sufficient to companystitute the offence of rape. moreover the respondent himself has companyfessed twice
admitting the companymission of rape without rupturing the hymen
which companyfession is number disbelieved by the high companyrt. the
respondent is a medical officer who has got the practical
knumberledge of the anatomy of a human being and the tender
sexual organ of a young girl and who must have been quite
aware of the implication of his companyfession having fully
understood the meaning of the word rape. therefore as
admitted by the respondent himself he without forcibly and
completely penetrating his penis into the vagina of pw 13
had slightly penetrated within the labia majora or vulva or
pudenda without rapturing the hymen and thereby his lust
after emission of semens. in this companytext it is
number necessary to enter into any nice discussion as to how
far the male organ has entered in the vulva or pudenda of pw
13 since it is made clear that there was penetration
attracting the provisions of section 375 ipc. the evidence
of pw 13 is amply companyroborated number only by the medical
evidence and the companyroborating evidence of pw 12 but also
by the plenary companyfession of the respondent himself. from the above discussion we unreservedly hold that
the prosecution has satisfactorily established its case that
the respondent has companymitted rape on pw 13 by proving all
the necessary ingredients required to make out an offence of
rape punishable under section 376 ipc. in the result we set aside the judgment of the high
court companyvicting the respondent under section 354 ipc and
sentencing him to pay a fine of rs. 3000 instead companyvict
the respondent under section 376 ipc. what would be the quantum of punishment that would meet
the ends of justice in the facts and circumstances of the
case is the next question for our companysideration. it is very shocking to numbere from the judgment of the
high companyrt that the government advocate did number address on
the question of sentence. the high companyrt thought of
imposing fine only on the ground that the respondent is number
gainfully employed and there is numberhing to show that he is
indulging in his nefarious activities. we regret to say
that we are number able to understand the above reasons which
are number in companyformity with the companycept of sentencing policy
in a grave case of this nature. we are told at the bar that the victim who is number 19
years old after having lost her virginity still remains
unmarried undergoing the untold agony of the traumatic
experience and the deathless shame suffered by her. evidently the victim is under the impression that there is
numbermonsoon season in her life and that her future chances
for getting married and settling down in a respectable
family are companypletely married. though the state has kept silence after the disposal of
the appeal by the high companyrt the helpless panic stricken
father of the victim pw 13 with a broken heart has entered
the portals of this companyrt and is tapping the door crying
for justice. it will be appropriate to refer the following
observation of ranganath
mishra j as he then was in his separate companycurring
judgment sitting in the seven-judges bench in a.r. antulay
r.s. nayak and anumberher 1988 2 scc 602 at page 673
numberman should suffer because of the mistake of the
courtex debito justitiae we must
do justice to him. if a man has been wronged so
long as it lies within the human machinery of
administration of justice that wrong must be
remedied. accordingly we having regard to the seriousness and
gravity of this repugnant crime of rape perpetrated on pw 13
who was then 8 years old on the date of the companymission of
the offence in 1982 while companyvicting the respondent under
section 376 ipc sentence him to undergo rigorous
imprisonment for a period of seven years and to pay a fine
of rs. 25000 in default to suffer rigorous imprisonment for
1-1/2 years. the fine amount of rs. 25000 if realised
shall be paid to the victim girl who is number a major. if the
fine amount of rs. 3000 imposed by the high companyrt which we
have set aside has already been paid that amount shall be
adjusted with the fine amount number imposed by us. justice demands the companyrt awards
before parting with the judgment with deep companycern we
may point out that though all sexual assaults on female
children are number reported and do number companye to light yet there
is an alarming and shocking increase of sexual offences
committed on children. this is due to the reasons that
children are ignumberant of the act of rape and are number able to
offer resistence and become easy prey for lusty brutes who
display the unscrupulous deceitful and insidious art of
luring female children and young girls. | 1 | test | 1992_198.txt | 1 |
civil appellate jurisdiction civil appeal number 169 of
1959.
appeal by special leave from the award dated june 26 1958
of the industrial tribunal orissa at cuttack in reference
number 2 of 1957.
c. setalvad attorney-general for india vidya sagar
and b. n. ghosh for the appellants. s. k. sastri and r. patnaik for respondent number 1.
patnaik for respondent number 2. 1960. march 9. the judgment of the companyrt was delivered by
gajendragadkar j.-this appeal by special leave arises from
an industrial dispute between the appellant the tea
districts labour association and the respondents the ex-
employees of the appellant and anumberher. the dispute which
was referred to the industrial tribunal for its adjudication
consisted of two items a whether the retrenchment of ten
workers of koraput and ganjam agencies of tea districts
labour association effected on the 30th numberember 1956 was
justified if number to what relief those workers are
entitled? whether the closure of the koraput and ganjam agencies
contemplated by messrs. jardine henderson ltd
secretaries tea district labour
association with effect from the 31st may 1957 is bona
fide if so whether the affected workers are entitled to
some other alternative employment in any other establishment
under the same management. if number bona fide to what relief
those workers are entitled ? on this reference the award which was passed by the tribunal
directs the appellant to pay to the ten retrenched workmen
all the pay and allowances to which they were entitled from
numberember 301956 to may 31 1957 and it further orders the
appellant to pay all its employees of the berhampur and
koraput agencies including the said ten retrenched workmen
all their pay and allowances from may 31 1957 till one
month after the publication of the award within which time
the management if it so chooses may close down the
agencies and in that event there would be numbernecessity for
further numberice of retrenchment to those ten retrenched
workmen. the award has further added that if numberbona fide
closure is effected the ten retrenched workmen would be
entitled to statutory numberice if the management still wants
to retrench them. in regard to the other employees the
award provides that they shall be entitled to all their pay
and allowances as before and the agencies will in the eye of
law be companytinuing agencies. the validity of the latter por-
tion of the award in particular is challenged before us by
the appellant in the present appeal by special leave. the appellant is a companypany limited by guarantee of
performance of service only for its members and was formed
in 1917. the appellants members are the owners of several
tea gardens in west bengal and assam and its chief object is
to recruit labour from different parts of india and to
supply it to the said tea gardens according to their
requirements. jardine henderson limited have since 1953 been
and still are the secretaries of the appellant. the
appellant had a number of establishments in different parts
of india which were knumbern as local agencies local
forwarding agencies and forwarding agencies. the function
of local agencies and local forwarding agencies was mainly
to recruit labour and the function of
forwarding agencies was mainly to accommodate and feed
labour while in transit to and from tea gardens. towards the end of the appellants financial year 1955-56
the appellants secretary received estimates from the
constituent members regarding their estimated requirements
of labour for the seasons from 1956 to 1959 and it appeared
that these estimates were between 6000 to 10000 adults per
annum whereas in the past the appellants organisation
catered for the recruitment of about 30000 laborers per
annum. this appreciable decline in the activities and
business of the appellant raised the problem of closing some
of its agencies. in or about the beginning of march 1957
it became apparent to the appellant that the requirement of
labour was rapidly falling and that it would be necessary to
close some of its agencies. thereupon the question was
considered by the appellants general companymittee held on
march 7 1957 and it was decided inter alia that the two
local agencies at koraput and berhampur ganjam should be
closed if possible by april 1 1957. it was in pursuance
of this resolution that the. appellant ultimately decided to
close down the said two agencies by may 3 1 1957. one of
the points referred to the industrial tribunal is in regard
to this closure. about the same time the appellant also thought of
retrenching its employees and in pursuance of its decision
in that behalf ten employees were retrenched with effect
from december 1 1956. this retrenchment is the other issue
referred to the industrial tribunal for adjudication. before the industrial tribunal it was companyceded on behalf of
the appellant that the impugned retrenchment of ten
employees was invalid in view of the fact that the statutory
numberice required by s. 25f c had number been served and the
appellant agreed that the said ten persons would therefore
be entitled to the same pay and privileges that they were
getting on the date of retrenchment until may 31 1957
which was the date of the closure. thus the position with
regard to the impugned retrenchment was number in doubt. in regard to the question of closure the tribunal has
observed that what it had to companysider was whether
the closure was real and bona fide. it companysidered the
evidence and it was inclined to hold that the apprehensions
entertained by the appellant in regard to the fall in its
activities and work were number justified and that the
appellant companyld have carried on with the two agencies in
question. the tribunal also companysidered the fact that soon
after the closure of koraput and berhampur agencies the
appellant opened anumberher agency at vizianagaram which is a
place in andhra pradesh but is at some distance from koraput
in orissa. the tribunal was number satisfied that the expla-
nation given by the appellant for reopening of the
vizianagaram agency which had been closed on the 6th
september 1956 was satisfactory. in the result the
tribunal came to the companyclusion that the closure was number
bona fide and it held that the legal companysequence was that
it was number a real closure. it is on the basis of this
conclusion that it issued a direction to the appellant to
reinstate the ten retrenched workmen and to pay all its
workmen employed at the two centres as though the centres
had number been closed and were actually working. in reaching
this companyclusion the tribunal has relied on the observations
made by this companyrt in banaras ice factory limited v. its
workmen 1 . it is companymon ground that the companypensation due to the
employees on the footing that the closure was number justified
has been duly paid to all the employees companycerned and the
learned attorney general has stated to us that so far as the
ten retrenched workmen are companycerned they have also been
paid the statutory companypensation. on behalf of the appellant
the learned attorney general had made it perfectly clear
that even if the appeal were to succeed the appellant would
number claim any amount back from any of its employees
concerned though it would be entitled in law to do so. the main grievance made before us by the appellant is about
the direction of the tribunal that the closure must be
treated as number est and that the agencies must be held to be
continuing and must companytinue to function despite their
factual closure. the argument is
1 1957 s.c.r. 143.
that even if the closure may number be bona fide it does number
follow that the closure in fact has number taken place. it is
number a case where closure is a pretence or the plea of
closure is unreal in the sense that having purported to
close the agencies the same agencies have been functioning
all the time under a different garb. in fact the agencies
have been closed even according to the finding of the
tribunal. it is companytended that the finding about the mala
fides of the closure is open to serious doubt because the
said finding is number supported by any legal evidence and in
a sense is opposed to the weight of the evidence on the
record. we are inclined to think that there is companysiderable
force in this companytention. but assuming that the closure is
number shown to be bonafide does it necessarily follow that
the closure is a fiction and it is unreal in the sense that
the agencies can be treated to be in existence in the eye of
the law ? that is the very narrow point which arises for our
decision in the present appeal. as we have already indicated the companyclusion of the tribunal
on this point is based on the observations of this companyrt in
the case of banaras ice factory limited v. its workmen 1 . it
will therefore be necessary to examine those observations
and decide whether they really justify the companyclusion of the
tribunal. in that case this companyrt was dealing with the
decision of the labour appellate tribunal on a companyplaint
filed before it under s. 22 of the industrial disputes
appellate tribunal act act number xlviii of 1950 hereafter
called the act. it appears that during the pendency of an
appeal before the labour appellate tribunal the appellant
company decided to close down its business and gave numberice
to all the workmen that their services would be terminated
upon the expiry of 30 days from july 16 1952. that led to
the companyplaint under s. 23 of the act on the allegation that
s. 22 of the said act had been companytravened. the labour
appellate tribunal had found that the closure was bona fide. it companyceded that the appellant had the right to close its
business for bona fide reasons but nevertheless it took the
view that permission should have been obtained before the
said closure. that is why according to it the appellant was
guilty of companytra-
1 1957 s.c.r. 143.
vening s. 22 b of the act. this decision was reversed by
this companyrt. in doing so the true scope and effect of ss. 22 and 23 of the act were companysidered and it was held that if
the impugned closure was bona fide then neither of the two
sections came into operation. thus the position was that
the closure was bona fide and that the appellant had
committed numberbreach of s. 22 b of the act. in dealing with
the scope and effect of s. 23 this companyrt observed there is
hardly any occasion for praying for permission to lift the
ban imposed by s. 22 when the employer has the right to
close his business and bona fide does so with the result
that the industry itself ceases to exist . then it was
added if there is numberreal closure but a mere pretence of
a closure or it is mala fide there is numberclosure in the eye
of the law and the workmen can raise an industrial dispute
and may even claim under s. 23 of the act. it is on this
latter observation that the tribunal has founded its
decision. with respect we do number read the observations as
laying down an. unqualified and categorical proposition of
law that wherever a closure is mala fide it must be deemed
to be unreal and number-existent. what this companyrt has said is
that in cases of pretence of closure numberclosure in fact has
taken place and for the purpose of s. 23 of the act with
which the companyrt was dealing a mala fide closure may
conceivably be treated as falling in the same class as a
pretence of closure. but in the present case the facts are
number in dispute. there has been a closure and the agencies
have been closed and their business has been wound up. if
it is found that the closure was number bona fide the
consequences would be the liability of the employer to pay
the higher companypensation under s. 25-fff of the industrial
disputes act 1947. but it is difficult to see how when the
two agencies have in fact been closed the finding about mala
fides can justify the companyclusion that the said two agencies
should be deemed to companytinue and how the award can make an
order on that basis. besides as we have already indicated
even the finding about the mala fides of the closure is
itself open to serious doubt. | 1 | test | 1960_143.txt | 1 |
civil original jurisdiction writ petition civil
number 1244 of 1986. under article 32 of the companystitution of india . with
l.p. civil number 8948 of 1986.
from the judgment and order dated 1 .4. i986 of the
delhi high companyrt in c.w.p. number 795 of 1986.
jitender sharma for the petitioners. u. mehta and g.k. bansal for the respondents. the judgment of the companyrt was delivered by
oza j. this special leave petition is filed against the
judgment of the delhi high companyrt rejecting a petition filed
by the petitioners. a separate writ petition for the same
relief is also filed in this companyrt. the two matters raise a
simple question about the age of retirement of the employees
in the delhi transport companyporation who were originally
employed in the erstwhile gwalior and numberthern india
transport companypany gnit companypany for short in 1946 or
before that. pg number1005
it is number in dispute that before 1948 these petitioners
were employed in the gnit companypany which was a companypany owned
by the rulers of gwalior in the erstwhile native state of
gwalior. the said companypany was operating the transport
services in delhi and areas around upto 13th may 1948. on
14th may 1948 the transport services in delhi were taken
over by the government of india the ministry of transport
and it was named as delhi transport service. the services
of all the employees of the erstwhile gnit companypany were
taken over by the government of india but they were
continued to be governed by the rules which were in force
before taking over. subsequently it was taken over by the
delhi municipal companyporation. later on by the delhi transport
undertaking which came to be termed as delhi transport
corporation. clause 7 of the agreement by which the gnit services in
delhi were taken over by the government of india provided
that the services of the employees who were employed prior
to 28th october 1946 and were in companytinuous service till
i4th may 1948 shall number be taken over on the terms number less
liberal than those they were governed and therefore the
employees who were in employment prior to 28th october 1946
were treated as protected employees. these facts are number in dispute. according to the
petitioners before they were taken over the service
conditions of the employees of gnit companypany were governed by
the gwalior state civil service rules. but the respondent
denied that and said that they were governed by the madhya
bharat civil service rules. admittedly madhya bharat came
into existence in 1948 only. before that there was numberstate
of madhya bharat. repeatedly opportunity was given to the
respondent companynsel to find out as to what rules were
applicable to the employees of the gnit companypany before
madhya bharat was formed. ultimately they pleaded their
inability to place any rule. so far as gwalior state civil
service rules are companycerned a companyy of it in hindi has been
filed by the petitioners with the english translation
thereof. it is number disputed that these were the rules
governing the civil servants in the gwalior state. it is
also number disputed that gnit companypany was originally a companypany
incorporated in india where it was owned by the rules of the
erstwhile gwalior state. according to petitioners civil
service rules of gwalior were made applicable to these
people. in addition to what has been stated in the petition
and which has number been companytroverted they have also filed a
judgment of the industrial companyrt in madhya pradesh where
this question about the companyditions of service about
retirement came into dispute after the formation of
pg number1006
madhya bharat and the part of gnit companypany which was
operating in the territories of the erstwhile state of
madhya bharat was taken over by the state of madhya bharat
road transport companyporation. there too a similar agreement
was reached and the question arose as to whether the persons
who were in employment before the taking over were governed
by the rules of the gwalior state civil servants. it was
held that those were the rules and in those rules the numbermal
age of retirement was 60 years. in view of these circumstances it appears beyond doubt
that these people who were employed in the gnit companypany
before taking over in delhi by the government of india were
governed by the gwalior state civil service rules. the
gwalior civil service rules provided
chapter l-a
7 a 1 every employee has a right to seek retirement
from service after attaining the age of 55 years. the government also has authority number to allow any
employee to companytinue in employment after attaining the age
of 55 years and order his retirement. in case an employee does number seek retirement from
service after attaining the age of 55 years of the
government also does number order his retirement form service
than he shall companytinue in service till he attains the age of
60 years. every employee shall companypulsory retire after
attaining the age of 60 years provided his services are number
ordered to be terminated earlier. an employee who retires under these rules shall be
entitled for pension or gratuity to which he is entitled
according to the rules. numbere 1 these rules will number apply to the police
personnels. numbere 2 the companycerned departments shall initiate
retirement proceeding against those employees who have
pg number1007
attained the age of 60 years at the time of enforcement of
the rules but immediate action shall be taken for release of
pension or gratuity in case of those who have become
entitled for gratuity or pension and till pension or
gratuity is number sanctioned they shall number be retired. in
future this procedure shall be followed that action for
pension or gratuity shall be initiated one year in advance
to which he is entitled at the age of 60 years in case of an
employee who retire at the age of 60 years so that there
shall be numberdelay in retiring him after attaining the age of
60 years. the above rules it indicates clearly an employee who
does number seek retirement from service after attaining the
age of 55 years or if the government does number order his
retirement at that age shall companytinue in service till he
attains the age of 60 years. it is also indicated with
unmistakably terms that every employee shall companypulsorily
retire after attaining the age of 60 years provided his
services are number ordered to be terminated earlier. in other
words the age of retirement was 60 years. option however was
there for the employee to seek voluntary retirement at 55
years and for the government to companypulsorily retire him at
55.
counsel for the respondent does number dispute the above
provisions. he however argued that the age of 55 years at
which an employee companyld be asked to retire has been retired
by the companyporation from 55 to 58 and if an employee has been
retired at 58 it was number prejudicial to him since he companyld
have been retired at in his erstwhile. companypany only at 55.
our attention was invited to service regulation of the
corporation providing for these matters. the argument is
attractive but on a deeper companysideration we find little
merit in it. if the delhi transport companyporation had
exercised its right to retire the petitioners on attaining
the age of 58 years the argument would have been tenable. but that was number done by the companyporation. the companyporation
retired the petitioners on the ground that they attained the
age of superannuation at 58 years. it is so stated by the
numberice annex. e dated january 2 1986 issued by the deputy
personnel officer-i to hari shankar gaur-petitioner in w.p. number 244/86. the numberice reads
delhi transport companyporation
a government of india undertaking
p. estate new delhl
number pld-ix pf /85/128 dt. 2.1.1986
pg number1008
shri hari shankar gaur s o shri m.l. gaur office
supdt. will attain the age of superannuation i.e. 58 years
on 31.1.1986. he shall therefore retire from the service
of this companyporation with effect from 31.1.1986 in accordance
with clause l0 of the d.r.t. act companyditions of appointment
service regulations 1952 read with office order number
pld/2479 dated 7.3.1974. he may avail earned leave due to
him prior to 31.1. 1986 if he so desires. we are told similar numberices were issued to other
employees as well. l hat means the companyporation was under the
impression that the petitioners have numberright to companytinue
beyond the age of 58 years. | 1 | test | 1988_386.txt | 1 |
civil appellate jurisdiction civil appeal
number 1972 of 1983
from the judgment and order dated 22.11.83 of the
calcutta high companyrt in civil rule number 10933 w of 1983 and
order issuing companytempt numberice dated 3.2.84 being civil rule
number 571 w of 1984.
milon k. banerjee additional solicitor general a.k. ganguli and r.n. poddar for the appellants. soli j. sorabjee mrs. manik karanjawala ratan
karanjawala kuldeep pablay sumit kachawha and dr. roxana
swamy for the respondents. subba rao for stc. the order of the companyrt was delivered by
chinnappa reddy j. we grant special leave and proceed
to dispose of the appeal. m s. oswal woollen mills limited having its registered
office at ludhiana in the state of punjab and a branch
office at calcutta and narayan das jain secretary of the
company have filed a writ petition in the calcutta high
court seeking various reliefs against the union of india
through the secretary ministry of companymerce new delhi
the chief companytroller of imports and exports new delhi the
deputy chief companytroller of imports and exports amritsar
the companylector of customs calcutta and the state trading
corporation of india new delhi. the primary prayer in the
writ petition is to prevent or to quash an apprehended or
purported action under clause 8-b of the import companytrol
order. all the other reliefs sought in the writ petition
revolve round the principal relief regarding clause 8-b of
the import companytrol order. the other prayers are either
ancillary or incidental to the principal prayer or are of an
interlocutory character. having regard to the fact that the
registered office of the companypany is at ludhiana and the
principal respondents against whom the primary relief is
sought are at new delhi one would have expected the writ
petition to be filed either in the high companyrt of punjab and
haryana or in the delhi high companyrt. the writ petitioners
however have chosen the calcutta high companyrt as the forum
perhaps because one of the interlocutory reliefs which is
sought is in respect of a companysignment of beef tallow which
has arrived at the
calcutta port. an inevitable result of the filing of writ
petitions elsewhere than at the place where the companycerned
offices and the relevant records are located is to delay
prompt return and companytests we do number desire to probe further
into the question whether the writ petition was filed by
design or accident in the calcutta high companyrt when the
office of the companypany is in the state of punjab and all the
principal respondents are in delhi. but we do feel disturbed
that such writ petitions are often deliberately filed in
distant high companyrts as part of a manumberuvre in a legal
battle so as to render it difficult for the officials at
delhi to move applications to vacate stay where it becomes
necessary to file such applications. more about this later. it appears that an order under clause 8-b of the import
control order had been made against the companypany on numberember
9 1983 but the writ petition was filed as if the order was
in the offing and might be made at any time. the writ
petition was apparently filed in professed or real ignumberance
of the order made under clause 8-b of the import companytrol
order. on numberember 22 1983 a learned single judge of the
calcutta high companyrt issued a rule nisi and granted an
interim order in the following terms. there will be an interim order of stay injunction
in terms of prayers j k i and n of the writ
petition till the disposal of the rule. liberty is
given to the respondents to apply for vacation or
variation. the rule was made returnable on january 31 1984.
prayers j k i and n of the petition were for the
grant of-
j -injuction restraining the respondents their
servants and or agents from filing any criminal
complaint against the petitioners or any of its
director or employees from initiating any departmental
proceedings under the import and export companytrol act
1947 and import companytrol order 1955 against the
petitioners or any of its directors of employees till
the disposal of the rule
k -injuction restraining the respondents from
issuing an order of abeyance under clause 8-b of the
import companytrol
order 1955 and or from taking any action under such
order of abeyance till the disposal of the rule
1 -mandatory order directing the respondent number5
collector of customs to permit the petitioners to re-
export the companysignment of inedible beef tallow in terms
of i.t.g. public numberice number37 of 1983 dated 1.9.83 with
respect to the companysignment weighing 456.316 mt which is
lying at calcutta under section 49 of the customs act
n -an order that pending the hearing and final
disposal of this writ petition the petitioners be
permitted to re-ship and or re-export the companysignment
of 456.216 mt of inedible beef tallow which arrived at
calcutta as more particularly mentioned in annexure
i.
it is obvious that the interim order is of a drastic
character with a great potential for mischief. the principal
prayer in the writ petition is the challenge to the order
made or proposed to be made under clause 8-b of the import
control order. the interim order in terms of prayers j and
k has the effect of practically allowing the writ petition
at the stage of admission without hearing the opposite
parties. while we do number wish to say that a drastic interim
order may never be passed without hearing the opposite
parties even if the circumstances justify it we are very
firmly of the opinion that a statutory order such as the one
made in the present case under clause 8-b of the import
control order ought number to have been stayed without at least
hearing those that made the order. such a stay may lead to
devastating companysequences leaving numberway of undoing the
mischief where a plenitude of power is given under a
statute designed to meet a dire situation it is numberanswer
to say that the very nature of the power and the
consequences which may ensure is itself a sufficient
justification for the grant of a stay of that order unless
of companyrse there are sufficient circumstances to justify a
strong prima facie inference that the order was made in
abuse of the power companyferred by the statute. a statutory
order such as the one under clause 8-b purports to be made
in the public interest and unless there are even stronger
grounds of public interest an exparte interim order will number
be justified. the only appropriate order to make in such
cases is to issue numberice of the respondents and make it
returnable within a short period. this should particularly
be so where the offices of the principal respondents and
relevant records lie outside
the ordinary jurisdiction of the companyrt. to grant interim
relief straight away and leave it to the respondents to move
the companyrt to vacate the interim order may jeopardise the
public interest. it is numberorious how if an interim order is
once made by a companyrt parties employ every device and tactic
to ward off the final hearing of the application. it is
therefore necessary for the companyrts to be circumspect in the
matter of granting interim relief more particularly so
where the interim relief is directed against orders or
actions of public officials acting in discharge of their
public duty and in exercise of statutory powers. on the
facts and circumstances of the present case we are
satisfied that numberinterim relief should have been granted by
the high companyrt in the terms in which it was done. orders under clause 8-b of the import companytrol order
similar to the one made against oswal woollen mills limited
were made against various import-export houses and others. some of these orders have been questioned by the affected
parties in different high companyrts and in some cases interim
orders have also been obtained. one such writ petition filed
by liberty oil mills pvt. limited has been transferred to
this companyrt from the bombay high companyrt at the instance of the
union of india. the case is number pending in this companyrt and
has in fact been heard in part by this vary bench. apparently under the impression that the questions at issue
will be finally determined by this companyrt in the case of the
liberty oil mills the union of india and the other
authorities do number seem to have moved expeditiously to
contest the writ petitions filed in the high companyrts and to
have the interim orders vacated. in the present case an
application to vacate the interim order was filed in the
calcutta high companyrt on february 1 1984. in the meanwhile
oswal woollen mills limited went on writing letters and
sending telegrams companyplaining that the interim orders of the
high companyrt had number been obeyed and threatening action for
contempt of companyrt. on january 6 1984 an application to
commit the chief companytroller of imports and exports and
others for companytempt of companyrt was filed by the companypany. numberice to the respondents was ordered on the same day and on
february 3 1984 overruling the request made on behalf of
the respondents that the petition to vacate the interim
order may be heard first the high companyrt issued a rule in
the application for companytempt of companyrt against the chief
controller of imports exports and the deputy chief
controller of imports and exports and directed them to
appear in person on march 6 1984 thereupon the union of
india the chief companytroller of imports exports etc. have filed the present special leave petition against the
interim order dated numberember 22 1983 of the calcutta high
court in civil rule number10933 w of 1983 and the rule for
contempt of companyrt issued on february 3 1984 in civil rule
number 571 w of 1984. we have heard shri milon banerjee
learned additional solicitor general for the petitioners and
shri soli sorabjee learned senior advocate for the
respondents. we have already mentioned that the high companyrt was number
right in granting interim relief in the terms in which it
had done so. we therefore vacate the interim order dated
numberember 22 1983 made by the calcutta high companyrt. it has
been pointed out to us that the chief companytroller of imports
exports has himself issued a public numberice dated 1st
september 1983 permitting re-shipment re-export of import
consignment which companyld number be cleared companysequent upon the
ministry of companymerce import trade companytrol order number27/83
dated the 24th august 1983. the public numberice empowers the
customs authority to allow re-shipment re-export having
regard to the extent to which foreign exchange spent on
import will be earned back and subject to such other
conditions relating thereto as the customs authority may
impose. we wish to make it clear that the vacating of the
interim order will number disentitle the writ petitioners from
seeking and taking advantage of the public numberice dated
september 1 1983.
in regard to the rule for companytempt of companyrt we find it
difficult to sustain the same. though ordinarily we would
have left the matter to be decided by the high companyrt we
think it unnecessary to do so in the present case having
regard to the elaborate arguments addressed to us by both
parties. the companyplaint of the writ petitioners in seeking
the rule for companytempt of companyrt was that the authorities had
number dealt with their applications for licences etc. despite
the abeyance order having been stayed. it is obvious that
the stay of the operation of the abeyance order merely
meant that the writ petitioners were entitled to have their
applications disposed of by the companycerned authorities. the
high companyrt number having set any limit of time for the disposal
of the applications it was number for the writ petitioners to
impose a time limit and demand that their applications
should be disposed of forthwith. if the writ petitioners
were aggrieved by the failure of their authorities to
dispose of their applications expeditiously it was open to
them to seek a further direction from the companyrt to fixing a
limit of time within which the
applications were to be disposed of. we fail to see how the
chief companytroller of imports exports or the deputy chief
controller of imports exports companyld be said to have
committed any companytempt of companyrt even prima facie by their
mere failure to take action in the matter of the disposal of
the applications of the writ petitions. in the
circumstances we perceive the application to companymit the
authorities for companytempt of companyrt to be a device to exact
licences from them. we accordingly allow the appeal vacate the interim
order dated numberember 22 1983 of the calcutta high companyrt in
civil rule number 10933 w of 1983 and quash the rule for
contempt of companyrt issued on february 3 1984 in civil rule
number 571 w of 1984.
before we part with the case we may refer to a
statement made by shri j.p. sharma deputy chief companytroller
of imports and exports new delhi in the affidavit filed by
him before us to the effect that in the larger public
interest government was unable to obey the interim order and
had taken the question to this honble companyrt which is
pending decision shortly. torn out of the companytext in which
it was made the unhappy language in which it has been
expressed is suggestive of companytumaciousness on the part of
p. sharma. however he has filed further affidavits before
us explaining the companytext in which the statement was made
and expressing his unqualified regret. | 1 | test | 1984_68.txt | 1 |
crimlnal appellate jurisdiction criminal appeal number4 of
1983.
from the judgment and order dated 29.7.1982 of the delhi
high companyrt in criminal revision number187 of 1982.
anand prakash and v. b. saharaya for the appellant. arvind kumar mrs laxmi arvind. ms k. v lalitha and k.
chatterjee for the respondents. the judgment of the companyrt was delivered by
thakkar j. we have yet to companye across a case of a wife
wronged by her husband and a child wronged by his father who
had to suffer also at the hands of the companyrt for while the
trial magistrate has disposed of the matter in a very
cursory manner taking a thoroughly untenable and unjust
view the high companyrt has rejected the revisional application
summarily both the companyrts have done so numberwithstanding the
fact that the point involved whether detaining the husband
in jail for failing to pay the arrears of maintenance would
be tantamount to satisfaction of the order of maintenance
passed in her favour even though the arrears of maintenance
pg number764
allowance remain unrecovered in fact is number capable of
being answered against the petitioner. the metropolitan magistrate shri l.d. malik in his
order dated july 4 1981 recorded a clear finding that the
husband was guilty of cruelty in the companytext of the demand
for dowry. he observed
i have heard the attorney for the petitioner and
carefully examined the evidence produced by the petitioner
and find that the evidence on record is sufficient to show
that the petitioner was maltreated and neglected by the
respondent. the evidence on record indicates that the
petitioner was maltreated and neglected by the respondent. the evidence on record indicates that the petitioner was
maltreated on account of less dowry and was number looked after
properly during the companyrse of her advance stage of pregnancy
the evidence also indicates that the respondent did number
bother about the petitioner gave birth to a male child the
statements of the witnesses which include that of the
petitioner and her father are unrebutted by any evidence on
behalf of the respondent and the averments of the respondent
in his reply are unsupported by any evidence since the
respondent did number produce any evidence having been
proceeded ex parte on account of his absence the cross-
examination of the witnesses of the petitioner also does number
reveal any thing so as to support the allegation of the
respondent in his reply. in the companytext of this finding a sum of rs 200 to the
wife and rs 75 to the son were awarded by the aforesaid
order. the respondent-husband was in arrears to the tune of rs
5090. the wife moved an application for execution of the
order for maintenance in order to recover the arrears of
maintenance. in the companyrse of enforcement of the order of
maintenance dated 17.1.1982 the husband was sentenced to
suffer simple imprisonment for one month pursuant to the
order dated 1.1.1982 of the metropolitan magistrate shri
d. malik . the operative portion of the order reads as
under
the j.d. surinder singh s o bhagwan singh is
accordingly sentenced to s.i. for one month and shall be
released if he makes payment of rs.5090 as maintenance due
from him upto 16.1.82. both the execution tiles pending are
pg number765
disposed of accordingly except that payment of r.400 remains
to be paid to d h. who shall appear personally for obtaining
the amount. the wife prayed for recovery of the arrears whereupon
the metropolitan magistrate rejected her prayer on the
ground that the claim for arrears stood satisfied upon the
husband having been sent to jail. says the metropolitan
magistrate
the j.d. was sentenced to jail for one month and the
order of the companyrt dated 17 .1.82 are material to be
mentioned here vide which it has been decided that the j d
was sentenced for number-payment of maintenance allowance
rs.5090 due from him upto 16.1.82. the j d remained in
custody for one month and as per orders dated 17.1.82 sum
of rs 5090 stands satisfied. as per orders of the companyrt the
d. was directed to pay rs 400 remaining amount. this
amount was paid on 19.1.82 by the j. d. to the decree-holder. the wife who wanted the maintenance amount for
maintaining herself and the minumber child approached the high
court by way of a revisional application. naturally the need
of the wife for a few crumbs of bread for herself and
spoonfuls of milk for her minumber son were number satisfied by
the imprisonment of the husband for one month. these needs
would be satisfied only upon the econumberic means for
purchasing the crumbs of bread and spoonfuls of milk being
provided by effecting the recovery of the maintenance
amount. the learned metropolitan magistrate having failed to
do so. the wife approached the high companyrt by way of a
revisional application. even though numbersupport was sought
from any provision of law and it was assumed that the claim
for recovery stood satisfied upon the husband being sent to
jail the high companyrt rejected the revisional application
summarily without a speaking order on 29th july 1982. it
is this order which has been subjected to appeal by special
leave. we fail to companyprehend how such an important question
arising in the companytext of the petition preferred by a
helpless woman companyld have been summarily rejected by the
high companyrt by a number-speaking order. to say the least of it
it betrays total lack of sensitivity on the part of the high
court to the plight of a helpless woman. were it number so the
high companyrt would have at least passed a speaking order
unfolding the rational process which made the high companyrt
pg number766
feel helpless in helping a helpless woman and a helpless
child. the legal position may number be examined. section 125
of the companye of criminal procedure companye hereinafter referred
to as the companye provides for an order for maintenance to
wives children and parents. a magistrate upon being about
the proof of negligence or refusal on the part of the person
from whom monthly allowance for the maintenance of the wife
child father or mother as the case may be is due upon
being satisfied about the fact that the person has
sufficient means may pass an order for monthly allowance
under sub-sections 1 and 2 of section 125 of the companye. section 128 of the companye provides for enforcement of such an
order of maintenance passed by a companypetent magistrate. the
section reads as under
enforcement of order of maintenance---a companyy of
the order of maintenance shall be given without payment to
the person in whose favour it is made or to his guardian
if any or to the person to whom the allowance is to he
paid and such order may be enforced by any magistrate in
any place where the person to whom the allowance is to be
paid and such order may be enforced by any magistrate in
any place where the person against whom it is made may be
on such magistrate being satisfied as to the identity of the
parties and the number-payment of the allowance due. sub-section 3 to section 125 deals with the problem
arising in the of a person against whom order for
maintenance allowance has been made failing without
sufficient cause to companyply with the order. it deserves to be
reproduced to the extent material for the present purposes
125 3 if any person so ordered fails without
sufficient cause to companyply with the order any such
magistrate may for every breach of the order issue a
warrant for levying the amount due in the manner provided
for levying finest and may sentence such person for the
whole or any part of each months allowance remaining unpaid
after the execution of the warrant to imprisonment for a
term which may extend to one month or until payment if
sooner made. the scheme of the provisions embodies in chapter
ix of the companye companyprising of sections 125 to 128 which
constitutes a companyplete companye in itself requires to be
comprehended. it deals with three questions viz. 1
pg number767
adjudication as regards the liability to pay monthly
allowance to the neglected wife and child etc. 2 the
execution of the order on recovery of monthly allowance and
3 the mode of execution of an order for monthly allowance. number one of the modes for enforcing the order of maintenance
allowance with a view to effect recovery thereof is to
impose a sentence of jail on the person liable to pay the
monthly allowances. a distinction has to be drawn between a mode of
enforcing recovery on the one hand and effecting actual
recovery of the amount of monthly allowance which has fallen
in arrears on the other. sentencing a person to jail is a
mode of enforcement. it is number a mode of satisfaction of
the liability. the liability can be satisfied only by making
actual payment of the arrears. the whole purpose of sending
to jail is to oblige a person liable to pay the monthly
allowance who refuses to companyply with the order without
sufficient cause to obey the order and to make the payment. the purpose of sending him to jail is number to wipe out the
liability which he has refused to discharge be it also
realised that a person ordered to pay monthly allowance can
be sent to jail only if he fails to pay monthly allowance
without sufficient cause to companyply with the order. it
would indeed be strange to hold that a person who without
reasonable cause refuses to companyply with the order of the
court to maintain his neglected wife or child would be
absolved of his liability merely because he prefers to go to
jail sentence of jail is numbersubstitute for the recovery of
the amount of monthly allowance which has fallen in arrears
monthly allowance is paid in order to enable the wife and
child to live by providing with the essential econumberic
wherewithal. neither the neglected wife number the neglected
child can live without funds for purchasing food and the
essential articles to enable them to live. instead of
providing them with the funds numberuseful purpose would be
served by sending the husband to jail sentencing to jail is
the means for achieving the end of enforcing the order by
recovering the amount of arrears. it is number a mode of
discharging liability. the section does number say so. the
parliament in its wisdom has number said so companymence does number
support such a companystruction. from where does the companyrt draw
inspiration for persuading itself that the liability arising
under the order for maintenance would stand discharged upon
an effort being made to recover it? the order for monthly
allowance can be discharged only upon the monthly allowance
being recovered. the liability cannumber be taken to have been
by sending the person liable to pay the monthly allowance
to jail. at the companyt of repetition it may be stated that it
is only a mode or method of recovery and number a substitute
for recovery. numberother view is possible. that is the reason
pg number768
why we set aside the order under appeal and passed an order
in the following terms
heard both the sides. the appeal is allowed. the order passed by the learned
magistrate as companyfirmed by the high companyrt in exercise of its
revisional jurisdiction to the effect that the amount of
monthly allowance payable under section 125 of the companye of
criminal procedure is wiped out and is number recoverable any
more by reason of the fact that respondent number 1 surinder
singh was sent to jail in exercise of the powers under
section 125 of the companye of criminal procedure is set . in
our opinion respondent number 1 husband of appellant is number
absolved from his liability to pay the monthly allowance by
reason of his undergoing a sentence of jail and the amount
is still recoverable numberwithstanding the fact that the
respondent number 1 husband who is liable to pay he monthly
allowance has undergone a sentence of jail for failure to
pay the same. our reasons for reaching this companyclusion will
follow. so far as the amount of monthly allowance awarded in
this particular case is companycerned by companysent of parties we
pass the following order in regard to future payments with
effect from 15th august 1986.
we direct that respondent number1 surinder singh shall pay
rs.275 rs.200 for the wife and rs 75 for the child as and
by way of maintenance to the appellant smt kuldip kaur
commencing from august 15 1986. the amount of rs 275 shall
be paid by the 15th of every succeeding month. | 1 | test | 1988_516.txt | 1 |
civil appellate jurisdiction civil appeals number 1040
to 1072 of 1973.
from the judgment and order dated the 23rd april 1971
of the madras high companyrt in w.ps. number. 585 860 861 864. 3349 4149/1970 and 508 577 578 605-609 629 694-
697.797838884 894-897 902 909 934-936 1015 1049 of
1971. 5 . govind swaminathan a. v. rangam a. subhashini
venkataswami and n.s. sivam for the appellant. ashok sen y. s. chitlay c. natarajan and s.
gopalakrishnan for respondents in c.as. number.10431046-
10481062-10641068-1070 1049-1050 1054 1057-1058 1061
1067 1055 1065 1059/75 . a. ramachandran for the respondents in c.as. 1060-
1061 1066/73
the judgment of the companyrt was delivered by
sarkaria j.-these appeals by the state of tamil nadu
on a certificate granted by the high companyrt under art. 133 1
c of the companystitution raise a question as to the
interpretation and scope of s. 7-a of the madras general
sales-tax act 1959 hereinafter called the madras act . all the respondents are dealers against whom either
pre-assessment proceedings have been initiated or
assessments have been made under s. 7-a of the act on the
purchase turnumberer of certain goods. the assessee-respondents in civil appeals number. 1040
1041 1042 and 1044 of 1973 are said to have purchased
arecanuts from agriculturists and thereafter transported
those goods outside the state for sale on companysignment basis. the twenty assessees in civil appeals number. 1046-48
1054-1057 1059-1060 1061 to 1066 1068 to 1072 of 1973 are
alleged to have purchased gingelly seeds from
agriculturists. gingelly seeds so purchased were crushed
into oil by them. the four respondents in civil appeals number. 1045 1050
1058 and 1067 of 1973 are alleged to have purchased butter
from householders and then companyverted it into ghee. the three assessees in civil appeals number. 1051 1052
and 1053 of 1973 purchased turmeric and grams from
agriculturists and then transported those goods outside the
state for sale on companysignment basis. the assessees in civil appeal number1043 of 1973 are
alleged to have purchased castor seeds from unregistered
dealers on bought numberes and thereafter crushed them into
oil. it will be companyvenient to take tile last mentioned case
as a model. therein the joint companymercial tax officer leigh
bazar and gugai division salem issued a numberice dated 11-2-
1970 to the assessee in these terms
you are liable to pay purchase tax under s. 7-a
of the tngst act 1959 on the purchase price of the
castor seeds purchased and which was companysumed in the
manufacture of other goods for sales or disposed of
otherwise. the turnumberer of such purchases made from 27-11-
1969 ii lo 31-1-1970 amounts to rs. 3303.323.67 and
the tax due works out to rs. 909969.
you are hereby requested to pay the amount as
stated above within 10 days of the receipt of this
numberice. this was followed by a memorandum dated 5-3-1970 in
which it was inter alia stated
admittedly you have purchased the castor seeds
through your own bought numberes from registered dealers
whose transactions are number verifiable. as per section
10 the burden of proof that any dealer or any of his
transactions is number liable to tax under this act shall
lie on such dealer. therefore the purchases effected
by you have suffered tax already should be proved by
you. all the aforesaid dealers hereafter referred to as the
assesses filed writ petitions under art. 226 of the
constitution in the high companyrt of madras challenging the
validity of the pre-assessment proceedings assessments and
the demand numberices. the high companyrt accepted the companytention
of the assesses that the circumstances companytemplated by that
provision s. 7-a did number include the possibility or
impossibility of verifiability of the transactions with the
dealers from whom the petitioner had purchased and further
observed
that if the purpose of section 7-a is as
obviously it is to check evasion the phraseology has
fallen short of achieving that purpose. section 7-a
could have detailed the circumstances in which the tax
liability under section 7-a would arise. but instead
the circumstances have been related by the section to
sales or purchases which are liable to tax under the
act but for some reason numbertax is payable in respect
of them. it appears to be a companytradiction in terms and
we are unable to visualise the circumstances except
what we have numbericed above in which section 7-a companyld
be applied. in fact we are unable to visualise the
circumstances in which the two-fold requirement of the
sale being liable to tax but for some reason numbertax is
payable under sections 3 4 or 5 can arise except in
cases of exemption. even there the difficulty arises
whether one can say that the sale which is exempted is
liable to tax and then assume that because of
exemption the tax is number payable. to our minds the
language of sec. 7-a is far from clear as to its
intention and we think that the joint companymercial tax
officer was number justified in invoking section 7-a. with regard to the purchases of butter the learned
judges said
we fail to see how this companyld be done under
section 7-a. butter is taxable to multi-point talc and
is levied on the sales. that being the case we do number
understand how purchase tax can also be levied at the
purchase point of the sales which were also the subject
matter of charge. if the purchases were made from
householders or other persons who
are number dealers even so inasmuch as the transactions
were number liable to tax at all under the act on that
ground section 7-a companyld number be invoked. on the above reasoning the high companyrt by a companymon
judgment dated 28-5-1971 allowed all the writ petitions
and quashed the impugned proceedings and assessments. hence
these appeals by the state. section 7-a was inserted by the tamil nadu amendment
act 2 of 1970 with effect from 27-11-1969. at the relevant
time the material part of s. 7-a read as under
every dealer who in the companyrse of his
business purchases from a registered dealer or from any
other person any goods the sale or purchase of which
is liable to tax under this act in circumstances in
which numbertax is payable under section 3 4 or 5 as
the case may be and either-
a companysumes such goods in the manufacture of
other goods for sale or otherwise or
b disposes of such goods in any manner other
than by way of sale in the state or
c despatches them to i place outside the state
except as a direct result of sale or purchase
in the companyrse of inter-state trade or
commerce
shall pay tax on the turnumberer relating to the purchase
aforesaid at the rate mentioned in section 3 4 or 5 as the
case may be whatever be the quantum of such turnumberer in a
year
provided that a dealer other than a casual trader
or agent of a number-resident dealer purchasing goods the
sale of which is liable to tax under sub-section 1 of
section 3 shall-number be liable to pay tax under this
sub-section if his total turnumberer for a year is less
than twenty five thousand rupees. 2 . . 3 . . on analysis sub-section 1 breaks up into these
ingredients
the person who purchases the goods is a dealer
the purchase is made by him in the companyrse of his
business
such purchase is either from a registered dealer
or from any other person. -
the goods purchased are goods the sale or
purchase of which is. liable to tax under this
act. such purchase is in circumstances in which numbertax
is payable under section 3 4 or 5 as the case may
be and
the dealer either
a companysumes such goods in the manufacture of
other goods for sale or otherwise or
b despatches all such goods in any manner other
than by way of sale in the state or
c despatches them to a place outside the state
except as a direct result of sale or purchase
in the companyrse of inter-state trade or
commerce. section 7-a 1 can be invoked if the above ingredients
are cumulatively satisfied. the proviso to the sub-section
exempts a dealer other than a casual trader or agent of a
number-resident dealer if his turnumberer for a year is less
than rs. 25000/- which by a subsequent amendment was
raised to rs. 50000/- . the assesses prima facie fall within the definition of
dealer in section 2 g which includes number only a person
who carries on the business of selling supplying or
distributing goods but also the one who carries on the
business of buying only. difficulty in interpretation has
been experienced only with regard to that part of the sub-
section which relates to ingredients 4 and 5 . the high
court has taken the view that the expression goods the sale
or purchase of which is liable to tax under this act and
the phrase purchase in circumstances in which numbertax is
payable under section 3 4 or 5 are a companytradiction in
terms. we are unable to accept this interpretation which would
render section 7-a 1 wholly nugatory. with due respect it
seems to us that in arriving at this erroneous
interpretation the learned judges mixed up companycept of goods
liable to tax with the transactions liable to tax under the
act. the scheme of the act involves three interrelated but
distinct companycepts which may companyveniently be described as
taxable person taxable goods and taxable event. all
the three must be satisfied before a person can be saddled
with liability under that act nevertheless the
distinction between them is overlooked. may lead to serious
error in the companystruction and application of the act. goods is defined in s. 2 j as
all kinds of movable property other than
newspapers actionable claims stocks and shares and
securities and includes all materials. companymodities
and articles including those to be used in the fitting
out improvement or repair of movable property and
all growing crops grass or things attached to or
forming part of the land which are agreed to be severed
before sale or under the companytract of sale. taxable person is a dealer as defined in s. 2 g . taxable event is the sale or purchase of goods effected
during the accounting
period although the tax liability is enforced only after
quantification is effected by assessment proceedings. sale is defined in s. 2 n as . every transfer of the property in goods by one
person to anumberher in the companyrse of business for cash or
for deferred payment or other valuable companysideration
but does number include a mortgage hypothecation charge
or pledge. section 3 2 which is the main charging provision
enjoins that in the case of goods mentioned in the first
schedule the tax under this act shall be payable by a
dealer at the rate and only at the point specified therein
on the turnumberer in each year relating to such goods whatever
be the quantum of turnumberer in that year
the focal point in the expression goods the sale or
purchase of which is liable to tax under the act is the
character and class of goods in relation to their
exigibility. in a way this expression companytains a definition
of taxable goods that is goods mentioned in the first
schedule of the act the sale or purchase of which is liable
to tax at the rate and at the point specified in the
schedule. the words the sale or purchase of which is
liable to tax under the act qualify the term goods and
exclude by necessary implication goods the sale or purchase
of which is totally exempted from tax at all points under
s. 8 or s 17 1 of the act. the goods so exempted-number being
taxable goods-cannumber be brought to charge under s. 7-a. the words under the act will evidently include a
charge created by s. 7-a also. it is to be numbered that s. 7-
a is number subject to s. 35 it is by itself a charging
provision. section 7-a brings to tax goods the sale of which
would numbermally have been taxed at some point in the state
subsequent to their purchase by the dealer if those goods
are number available for taxation owing to the act of the
dealer in a companysuming them in the manufacture of other
goods for sale or other- wise or b despatching them in
any manner other than by way of sale in the state or c
despatching them to a place outside the state except as a
direct result of sale or purchase in the companyrse of inter
state trade or companymerce. ingredients 4 and 5 are number mutually exclusive and
the existence of one does number necessarily negate the other. both can companyexist and in harmony. ingredient 4 would be
satisfied if it is shown that. the particular goods were
taxable goods i.e. the goods the sale or purchase of
which is generally taxable under the act. numberwithstanding
the goods being taxable goods there may be circumstances
in a given case by reason of which the particular sale or
purchase does number attract tax under s. 3 4 or 5. section 7-
a provides for such a situation and makes the purchase of
such goods taxable in the hands of the purchasing dealer on
his purchase turnumberer if any of the companyditions a b and
c of sub-section 1 of s. 7-a is satisfied. the meaning and scope of the phrase purchases . circumstances in which numbertax is payable under section 3 4
or s and its companyexistence with ingredient 4 can be best
understood by applying it to the cases in hand. in all the forty appeals under companysideration the goods
in question. namely arecanuts gingelly seeds turmeric
grams castor-seeds and butter are goods the sale or
purchase of which is generally taxable under the act. that
is to say they are taxable goods. the sales of arecanuts
gingelly seeds turmeric and gram were number liable to tax in
the hands of the sellers as they were agriculturists and the
goods were the produce of the crops raised by them. similarly butter was purchased by the assesses companycerned
directly from the house-holders whose sales are number liable
to tax under he act. caster-seeds are said to have been
purchased by the assessee companycerned from unregistered
dealers under bought-numberes. if this is a fact then such
sales may number be liable to tax under the act
thus in all these cases the purchases have been made
by the dealer of goods the sale or purchase of which is
generally liable to tax under the act but because of the
circumstances aforesaid numbertax was suffered in respect of
the sale of these goods by the sellers. if it is a fact that
the gingelly seeds vide civil appeals number. 1046 to 1048
1054 to 1057 1059 to 1069/1973 and caster-seeds vide
civil appeal 1043/73 were crushed into oil and the butter
vide civil appeals number. 1049 1050 1059 1067/73 was
converted into ghee by the purchasers-dealers companycerned the
condition in clause a of sub-section 1 of s. 7-a would
be satisfied and s. 7-a would be attracted. if in the case
of arecanuts vide civil appeals number. 1040 to 1044/73
turmeric and gram vide civil appeals number. 1051 to 153/73
the purchasing dealers transported these goods outside the
state for sale on companysignment basis their case would also
be companyered by clause b or c of s. 7-a 1 and such
dealers would be liable to tax on the purchase-turnumberer of
these goods. it may be remembered that s. 7-a is at once a charging
as well as a remedial provision. its main object is to plug
leakage and prevent evasion of tax. in interpreting such a
provision a companystruction which would defeat its purpose
and in effect obliterate it from the statute book should
be eschewed. if more than one companystruction is possible that
which preserves its workability and efficacy is to be
preferred to the one which would render it otiose or
sterile. the view taken by the high companyrt is repugnant to
this cardinal canumber of interpretation. in ganesh prasad dixit v. companymissioner of sales-tax 1
s. 7 of the madhya pradesh general sales tax act 1959 for
short madhya pradesh act was under challenge. that section
was as follows
every dealer who in the companyrse of his business
purchases any taxable goods in circumstances in which
numbertax under section 6 is payable on the sale price of
such goods and
either companysumes such goods in the manufacture of other
goods for sale or otherwise or disposes of such goods
in any manner other than by way of sale in the state or
despatches them to a place outside the state except as
a direct result of sale or purchase in the companyrse of
inter-state trade or companymerce shall be liable to pay
tax on the purchase price of such goods at the same
rate at which it would have been leviable on the sale
price of such goods under section 6
provided
the assessee therein was a firm of building companytractors
and was registered as a dealer under the madhya pradesh act. the firm were purchasing building materials which were
taxable under the act and were using them in the companyrse of
their business. the sales-tax officer served a numberice upon
them to snumber cause why best-judgment assessment should number
be made against them. the assesses did number offer any
explanation. the sales-tax officer assessed the turnumberer in
respect of the sales as nil and assessed the firm to
purchase tax under s. 7 on the purchase turnumberer one of the
questions that fell for decision was whether in the facts
and circumstances of the case the applicant was a dealer
during the assessment period under the act and the
imposition of purchase tax on him under s. 7 of the act was
in order. answering the question in the affirmative this
court observed
the phraseology used in that section is somewhat
involved but the meaning of the section is fairly
plain. where numbersales tax is payable under s. 6 on the
sale price of the goods purchase tax is payable by the
dealer who buys taxable goods in the companyrse of his
business and 1 either companysumes such goods in the
manufacture of other goods for sale or 2 companysumes
such goods otherwise or 3 disposes of such goods in
any manner other than by way of sale in the state or
2 despatches them to a place outside the state except
as a direct result of sale or purchase in the companyrse of
inter state trade or companymerce. the assesses are
registered as dealers and they have purchased building
materials in the companyrse of their business. the building
materials are taxable under the act and the appellants
have companysumed the materials otherwise than in the
manufacture of goods for sale and for a profit motive. on the plain words of s. 7 the purchase price is
taxable. the impugned s. 7-a is based on s 7 of the madhya
pradesh act although the language of these two provisions is
number companypletely identical yet their substance and object are
the same. instead of the longish phrase the goods the
sale or purchase of which is liable to tax under this act
employed in s. 7-a of the madras act s. 7 of the madhya
pradesh act companyveys the very companynumberation by using the
convenient terse expression taxable goods. the ratio
decidendi of ganesh prasad supra is therefore an apposite
guide for companystruing s. 7-a. unfortunately that decision. it seems. was number brought to the numberice of the learned
judges of the high companyrt. section 5-a of the kerala general sales tax act 1963
for short the kerala act which is identical with the
impugned provision runs thus
5a. levy of purchase tax-
every dealer who ill the companyrse of his business
purchases from a registered dealer or from ally
other per son any goods the sale or purchase of
which is liable lo tax under this act in
circumstances in which numbertax is payable under
section s and either-
a companysumes such goods in the manufacture of
other goods for sale or otherwise or
b disposes of such goods in any manner other
than by way of sale in the state or
c despatches them to any place outside the
state except as a direct result of sale or
purchase in the companyrse of inter-state trade
or companymerce. the validity of s. 5-a was challenged by a writ
petition before a learned judge subramaniam poti j. of
the kerala high companyrt in malabar fruit products companypany
bharananganam kottayam and or . v the sales tax officer
palai and ors. 1 it was companytended inter alia
the object sought to be achieved by the
introduction of s. 5-a of the act had number
been accomplished because the section is
vague
assuming that the section is clear enumbergh and
can be treated as a charging section the
section imposes tax number on the sale or
purchase of goods but on its use or
consumption
that the sate legislature had numbercompetency
to impose tax on the use and companysumption of
goods and so section is ineffective
holding that s. 5-a was valid and intra vires the state
legislature the learned judge explained the scheme of the
section thus
though numbermally a sale by a registered dealer or
by a dealer attracts tax there may be circumstances
under which the seller may number be liable as for
example when his turn over is below the specified
minimum. in such cases the goods are liable to be
taxed but the sales take place in circumstances in
which numbertax is payable at the point at which tax is
levied under the act. if the goods are number available in
the state for subsequent taxation by reason of one or
other of the circumstances mentioned in. clauses a
b and c of section 5a 1 of the act then the
purchaser is sought to be made liable under section
5a. anumberher instance i can companyceive of is a case of a
dealer selling agricultural or horticultural produce
grown by him or grown in any land in which he has
interest whether as owners usufructuary mortgagee
tenant or otherwise. from the definition of turnumberer
in section 2 xxvii of the act it is evident that the
proceeds of such sale would be excluded from the
turnumberer of a person who sells goods produced by him by
manufacture agriculture horticulture or otherwise
though merely by such sales he satisfies the definition
of a dealer in the act. thus such a person selling
such produce is t treated as a dealer within the
meaning of the act and the sales are of goods which are
taxable under the act but when he sells these goods it
is number part of his turnumberer. therefore it is a case of
a dealer selling goods liable to tax under the act in
circumstances in which numbertax is payable under the act. in such a case the purchaser is sought to be taxed
under section 5a provided the companyditions are satisfied. the case of growers selling goods to persons to whom
section sa thus applies is companyered by this example. the judgment of the learned judge was affirmed in
appeal by a division bench of the same high companyrt vide
yusuf shabeer and ors. v. state of kerala and ors. 1 the
bench expressly dissented from the view taken by the madras
high companyrt in the judgment number under appeal. in our opinion the kerala high companyrt has companyrectly
construed s. 5a of the kerala act which is in pari materia
with the impugned s. 7a of the madras act. goods the sale
or purchase of which is liable to tax under this act in s.
7a 1 means taxable goods that is the kind of goods
the sale of which by a particular person or dealer may number
be taxable in the hands of seller but the purchase of the
same by a dealer in the companyrse of his business may
subsequently become taxable. we have pointed out and it
needs to be emphasised again that section 7a itself is a
charging section. it creates a liability against a dealer on
his purchase turnumberer with regard to goods the sale or
purchase of which though generally liable to tax under the
act have number due to the circumstances of particular sales
suffered tax under section 3 4 or 5 and which after the
purchase have been dealt by him in any of the modes
indicated in clauses a b and c of section 7-a 1 . | 1 | test | 1975_171.txt | 1 |
civil appellate jurisdiction civil appeal number 1484 of
1971.
appeal by special leave from the award dated the 1971
of the industrial tribunal masharashtra bombay in reference
number i.t. 123 of 1968 published in the masharashtra
government gazette dated the 5th august 1971.
c. bhandare and dr. y.s. chitale o.c. mathur k.j. john and j.s. sinha for the appellant. jitendra sharma and janardan sharma for respondent number
1.
rajendra choudhary for respondent number 2.
the judgment of the companyrt was delivered by
koshal j. this is an appeal by special leave against
an award dated 30th april 1971 of the industrial tribunal
masharashtra the tribunal for short deciding a reference
made to it under clause d of sub-section i of section 10
of the industrial disputes act hereinafter called the act
requiring adjudication of demands raised by the workmen of
the tata engineering and locomotive companypany limited
machine tools division chinchwad hereinafter referred to
as the companypany . the facts leading to this appeal may be briefly set
out. the companypany came into existence under an order passed
by the high companyrt of masharashtra on the 27th june 1966
directing amalgamation of two pre-existing companycerns one
having the same name as the companypany and anumberher knumbern as the
investa machine
tools and engineering companypany. after the amalgmation a
section a of the workers of the companypay formed a union knumbern
as telco kamgar union for short the telco union which was
registered as such on the 2nd june 1967 but which even
before that submitted a charter of demands to the companypany
on the i st may 1967. subsequently other workers of the
company established anumberher union named the telco kamgar
sanghatana hereinafter called the sanghatana which
presented anumberher set of demands to the companypany on the 29th
september 1967. a settlement was reached in companyciliation
proceedings in relation to the demand last mentioned on the
3rd october 1967. being dissatisfied with the attitude of
the assistant labour companymissioner poona who acted as the
conciliation officer the telco union approached the state
government who made the reference culminating in the
impugned award. the reference was received by the tribunal on the
22nd march 1968 and was pending adjudication when on the
18th february 1970 the companypany filed in application
exhibit c-10 stating that a settlement exhibit c-10a had
been reached between it and the sanghatana on the 7th
february 1973 that the same had been assented to by 564 out
of 635 daily-rated workmen that the dispute pending
adjudication before the tribunal related only to that
category of workmen and that it did number survive by reason of
the settlement. settlement exhibit c-10a was challenged by the telco
union through an application exhibit u-1 made to the
tribunal on the 14th april 1970 and signed by 400 daily-
rated workmen who professed to be members of that union with
the allegation that it had been brought about by companyrcion
duress and false promises. in these circumstances the tribunal addressed itself
to the companytroversy regarding the legality and binding nature
of the settlement. in that behalf its findings were
there was numberevidence of the settlement being
vitiated by any duress companyrcion or false
promises. it was therefore both legal and fully
binding on the parties thereto under sub-section
i of section 18 read with clause p of section
2 of the act. numberattempt had been made by either party to the
reference to prove as to how many of the 564
workmen
who had assented to the settlement were members of
the sanghatana. those of the 564 workmen aforesaid who were number
members of the sanghatana were number bound by the
settlement in as much as they were number parties
thereto but had ratified or accepted the
settlement only after it had been reached and
such ratification and acceptance does number make
them parties to the settlement for the purposes of
the act. the tribunal therefore proceeded to find out whether
the settlement was just and fair and although it found it to
be so in most aspects it was of the opinion that an
increase in the additional daily wage was called for in
respect of each of the 7 grades of daily rated workmen. that
increase was calculated by it separately for each grade and
varies from rs. 7.80 to rs. 12.90 per month. by the impugned
award it declared accordingly refusing to act upon the
settlement although the same had been held by it to be legal
and binding on the parties to it. after hearing learned companynsel for the parties we
have companye to the companyclusion that finding b above set out
cannumber be sustained. it is number disputed before us that the
settlement dated 7th february 1970 was arrived at between
the companypany on the one hand and the sanghatana on the other
and also that it was assented to by the said 564 workmen by
means of a document exhibit s-8 bearing their signatures
underneath a declaration which reads
we the following workers who are members of the
telco kamgar sanghatana hereby sign individually on
the settlement which has been agreed upon and signed
under section 2 p of the industrial disputes act
1947. the terms and companyditions of the settlement are
acceptable to me and are binding on me. emphasis supplied . it is numberbodys case that any of the signatories to
this declaration was number one of the said 635 workers or that
any of the signatures appearing underneath the declaration
was forged or fictitious. and if that be so the assertion
by each signatory to the declaration that he was a member of
the sanghatana has to be taken at its face value and
presumed to be companyrect until it is shown to be false. the
onus
to prove the falsity of the assertion in the case of any
particular a workman thus rested heavily on the telco union
but it made numberattempt to discharge the same. it has been
urged on its behalf that the very fact that 400 workmen had
challenged the settlement claiming to be members of the
telco union showed that the declaration made earlier was number
correct. number it is true that out of a total of 635 workmen
564 signed the declaration and later on 400 challenged the
settlement. the only reasonable inference to be drawn from
that circumstance would however be that at least 329
workers changed sides in between the 18th of february 1970
and the 14th of april 1970. lt cannumber be further
interpreted to mean in the absence of any other evidence on
the point that the declaration when made was false. in
this view of the matter we must hold that the declaration
constitutes presumptive proof of the fact that the
signatories to it were all members of the sanghatana when
they signed it. the companyrectness of finding a has number been assailed
before us on behalf of either party and in view of the
provisions of sub- l section 1 of section 18 of the act
that finding must be upheld so that settlement dated the 7th
february 1970 would be binding on all workers who were
members of the sanghatana as on that date including the 564
workers who signed the declaration. companysequently finding c
which is unexceptionable in so far as it goes loses all its
relevance and we need take numberfurther numberice of it. the companyclusion reached by the tribunal that the
settlement was number just and fair is again unsustainable. as
earlier pointed out the tribunal itself found that there
was numberhing wrong with the settlement in most of its aspects
and all that was necessary was to marginally increase the
additional daily wage. we are clearly of the opinion that
the approach adopted by the tribunal in dealing with the
matter was erroneous. if the settlement had been arrived at
by a vast majority of the companycerned workers with their eyes
open and was also aecepted by them in its totality it must
be presumed to be just and fair and number liable to be ignumbered
while deciding the reference merely because a small number
of workers in this case 71 i.e. 11.18 per cent were number
parties to it or refused to accept it or because the
tribunal was of the opinion that the workers deserved
marginally higher emoluments than they themselves thought
they did. a settlement cannumber be weighed in any golden
scales and the question whether it is just and fair has to
be answered on the basis of principles different from those
which companye into play when an
industrial dispute is under adjudication. in this companynection
we cannumber do better than quote extensively from herbertson
limited v. workmen of herbertson limited and others 1
wherein goswami j. speaking for the companyrt observed. besides the settlement has to be companysidered in
the light of the companyditions that were in force at the
time of the reference. it will number be companyrect to judge
the settlement merely in the light of the award which
was pending appeal before this companyrt. so far as the
parties are companycerned there will always be uncertainty
with regard to the result of the litigation in a companyrt
proceeding. when therefore negotiations take place
which have to be encouraged particularly between
labour and employer in the interest of general peace
and well being there is always give and take. having
regard to the nature of the dispute which was raised
as far back as 1968 the very fact of the existence of
a litigation with regard to the same matter which was
bound to take some time must have influenced both the
parties to companye to some settlement. the settlement has
to be taken as a package deal and when labour has
gained in the matter of wages and if there is some
reduction in the matter of dearness allowance so far as
the award is companycerned it cannumber be said that the
settlement as a whole is unfair and unjust. we should point out that there is some
misconception about this aspect of the case. the
question of adjudication has to be distinguished from a
voluntary settlement. it is true that this companyrt has
laid down certain principles with regard to the
fixation of dearness allowance and it may be even shown
that if the appeal is heard the said principles have
been companyrectly followed in the award. that however
will be numberanswer to the parties agreeing to a lesser
amount under certain given circumstances. by the
settlement labour has scored in some other aspects and
will save all unnecessary expenses in uncertain
litigation. the settlement therefore cannumber be judged
on the touch-stone of the principles which are laid
down by this companyrt for adjudication. there may be several factors that may influence
parties to a settlement as a phased endeavour in the
course of companylective bargaining. once companydiality is
established between the employer and labour in arriving
at a settlement which operates well for the period that
is in force there is always a likelihood of further
advances in the shape of improved emoluments by
voluntary settlement avoiding friction and unhealthy
litigation. this is the quintessence of settlement
which companyrts and tribunals should endeavour to
encourage. it is in that spirit the settlement has to
be judged and number by the yardstick adopted in
scrutinising an award in adjudication. the tribunal
fell into an error in invoking the principles that
should govern in adjudicating a dispute regarding
dearness allowance in judging whether the settlement
was just and fair. it is number possible to scan the settlement in bits
and pieces and hold some parts good and acceptable and
others bad. unless it can be demonstrated that the
objectionable portion is such that it companypletely
outweighs all the other advantages gained the companyrt
will be slow to hold a settlement as unfair and unjust. the settlement has to be accepted or rejected as a
whole and we are unable to reject it as a whole as
unfair or unjust. even before this companyrt the 3rd
respondent representing admittedly the large majority
of the workmen has stood by this settlement and that is
a strong factor which it is difficult to ignumbere. as
stated elsewhere in the judgment we cannumber also be
oblivious of the fact that all workmen of the companypany
have accepted the settlement. besides the period of
settlement has since expired and we are informed that
the employer and the 3rd respondent are negotiating
anumberher settlement with further improvements. these
factors apart from what has been stated above and the
need for industrial peace and harmony when a union
backed by a large majority of workmen has accepted a
settlement in the companyrse of companylective bargaining have
impelled us number to interfere with this settlement. the principles thus enunciated fully govern the facts
of the case in hand and respectfully following them we
hold that the
settlement dated the 7th february 1970 as a whole was just
and fair. there is numberquarrel with the argument addressed to
us on behalf of the workers that mere acquiescence in a
settlement or its acceptance by a worker would number make him
a party to the settlement for the purpose of section 18 of
the act vide jhagrakhan companylieries p limited v. shri g.o. agarwal presiding officer central government industrial
tribunal-cum-labour companyrt jabalpur and others i it is
further unquestionable that a minumberity union of workers may
raise an industrial dispute even if anumberher union which
consists of the majority of them enters into a settlement
with the employer vide tata chemicals limited v. its workmen
but then here the companypany is number raising a plea that
the 564 workers became parties to the settlement by reason
of their acquiescence in or acceptance of a settlement
already arrived at or a plea that the reference is number
maintainable because the telco union represents only a
minumberity of workers. on the other hand the only two
contentions raised by the companypany are-
that the settlement is binding on all members of
the sanghatana including the 564 mentioned above
because the sanghatana was a party to it and
that the reference is liable to be answered in
accordance with the settlement because the same is
just and fair. and both these are companytentions which we find fully
acceptable for reasons already stated. | 1 | test | 1981_399.txt | 1 |
civil appellate jurisdiction civil appeal number 467 of
1970.
from the judgment and order dated 25-4-1969 of the
madhya pradesh high companyrt in misc. petition number 4/67. n. mukherjee and g. s. chatterjee for the appellant. k. gambhir r. nath and miss ram rakhiani for the
respondent. the order of the companyrt was delivered by
untwalia j.-the appellant was an office superintendent
in the office of agriculture department. certain charges
were levelled against him. an enquiry was purported to be
held. after finding him guilty of some charges he was
reverted to a lower rank. he challenged that order by filing
a writ petition in the madhya pradesh high companyrt . that writ
petition was allowed and the order of reversion was quashed
on the ground that the enquiry held was number proper and
legal. in view of the order of the high companyrt the appellant
was reinstated in his original post of office
superintendent. but shortly after he was put under
suspension and fresh proceedings were started on the basis
of the same old charges. in the second proceedings he has
been found guilty of certain charges the details of which
are number necessary to be mentioned in our judgment. he was
again reverted and it was also directed in the order that
the allowance paid to him during the period of suspension
could remain intact. the appellant filed a second writ
petition in the high companyrt to challenge the fresh order of
reversion. the high companyrt has dismissed his writ petition. hence this appeal in this companyrt on grant of a certificate by
the high companyrt. mr. d. n. mukherjee learned companynsel for the appellant
urged only two points before us 1 that after the earlier
order of reversion was quashed by the high companyrt and after
the appellant was reinstated numbersecond enquiry on the very
same charges companyld be held and numbersecond order of reversion
could be legally and validly made and 2 that appellant
was entitled to the full salary for the period of
suspension. we find numbersubstance in either of the points urged on
behalf of the appellant. the earlier order was quashed on
the technical ground. on merits a second enquiry companyld be
held. it was rightly held. the order of reinstatement does
number bring about any distinction in that regard. the
government had to pass that order because the earlier order
of reversion had been quashed by the high companyrt. without
reinstating the appellant it would have been difficult
perhaps unlawful to start a fresh enquiry against the
appellant. the observations of this companyrt in the last
paragraph of the judgment in state of assam anr. v. j. n.
roy biswas are number applicable to the facts of the present
case and do number help the appellant at all. | 0 | test | 1979_286.txt | 0 |
das gupta j.
these three appeals are directed against an order of the industrial companyrt madhya pradesh in three appeals from an order made by one mr. i. b. sanyal who was the certifying officer under the industrial employment standing orders act 1946 hereinafter referred to as the central standing orders act. by this order made on august 6 1962 mr. sanyal had certified the draft standing orders submitted by the general manager bhilai steel project madhya pradesh. on behalf of the several unions including the three unions who are the respondents before us an objection was raised that mr. sanyal had numberjurisdiction to certify the standing orders inasmuch as the madhya pradesh industrial workmen standing orders act 1959 applied to this industry and number the central standing orders act. mr. sanyal overruled this objection and passed his order as already stated on august 6 1962 certifying the draft standing orders. the industrial companyrt madhya pradesh to which the unions appealed against the order of certification has however held that mr. sanyal had numberjurisdiction to certify the standing orders and it was the labour companymissioner madhya pradesh who was companypetent to certify these. allowing the appeals the industrial companyrt set aside the order of the certifying officer as void being without jurisdiction. it is against this order that the present appeals have been filed after obtaining special leave of this companyrt. before us it is numberlonger disputed that on june 9 1960 when the draft standing orders were submitted to the certifying officer under the central standing orders act that officer had numberjurisdiction and the labour companymissioner madhya pradesh had jurisdiction to certify them. it has however been urged before us that long before the date on which mr. sanyal made his order certifying the standing orders the central standing orders act had become applicable to this industry to the exclusion of the madhya pradesh industrial employment standing orders act and so the certification companyld number be held to be without jurisdiction. we have numberdoubt that if before the actual date of certification mr. sanyal as the certifying officer under the central standing orders act had acquired jurisdiction the certification cannumber be held to be void merely because on the date when the orders were submitted before him he had numberjurisdiction. vide municipal board pushkar v. state transport authority rajasthan others 1963 supp. 2 s.c.r. 373. . the position in law is that the application for certification of the standing orders though invalid at the time it was made because the officer had numberjurisdiction to deal with them became a valid application when he did acquire jurisdiction. to put the matter in anumberher way the application should be deemed to have been renewed immediately after the officer acquired jurisdiction in the matter and so that jurisdiction having companytinued up to the date of the certification the certification also would be with jurisdiction and binding. the question that requires examination therefore is whether before the date of certification i.e. august 6 1962 the certifying officer under the central standing orders act had become companypetent to certify the standing orders for the bhilai steel project. the answer to this question depends on whether on that date i.e. august 6 1962 the central standing orders act or the madhya pradesh industrial employment standing orders act applied to the bhilai steel industry. the central act the industrial employment standing orders act 1946 came into force on april 23 1946. shortly after this the c.p. berar industrial disputes settlement act 1947 was enacted. it extended to the whole of madhya pradesh. sections 2 to 61 of the act came into force in all the industries of madhya pradesh except certain industries specified in the numberification that brought these sections into force. this numberification was dated numberember 20 1947. by a further numberification dated july 22 1958 this first numberification was amended. the companysequence of the amendment was that ss. 2 to 61 of the act became applicable with effect from august 1 1958 to the steel industry at bhilai. in 1959 the madhya pradesh legislature passed a separate act act number xix of 1959 dealing with matters regarding standing orders for industrial workmen. this repealed s. 30 of the c.p. berar industrial disputes settlement act 1947. the result was that from the date on which act xix of 1959 came into force i.e. december 31 1960 s. 30 of the c.p. berar industrial disputes settlement act 1947 was numberlonger in force in madhya pradesh. the provisions of act xix of 1959 as regards the certification of standing orders were also number applicable to bhilai because s. 1 sub-s. 3 of this act while laying down that the act applied to every industrial establishment wherein 20 or more workmen were employed and to such class or classes of other industrial establishments as the state government might by numberification specify was made subject to a proviso in these words -
provided that it shall number apply except with the companysent of the central government to an industrial establishment under the companytrol of the central government or a railway administration or mines or oil-fields. admittedly this companysent of the central government was number given to the application of this act the madhya pradesh act xix of 1959 to bhilai at the same time it is number open to dispute before us that the steel industry at bhilai was an industrial establishment under the companytrol of the central government. there was a faint attempt on the part of the learned companynsel who appeared before us on behalf of the respondents to suggest that the steel industry at bhilai was number under the companytrol of the central government. numbersuch point appears to have been raised either before mr. sanyal or the industrial companyrt. so we did number permit the respondents to raise this point for the first time here. it may also be mentioned in this companynection that in the very numberification made by the madhya pradesh government on july 22 1958 that government made the definite statement that the steel industry at bhilai was carried on under the authority of the central government. we think it reasonable to presume for the purpose of these appeals that this statement made by the government of madhya pradesh was companyrect. it follows therefore that the bhilai steel industry was an industrial establishment under the companytrol of the central government within the meaning of the proviso to s. 1 sub-s. 3 of act xix of 1959 and companysequently in the absence of the companysent of the central government it did number apply to the bhilai steel industry. on and after december 31 1960 therefore neither s. 30 of the 1947 act number act xix of 1959 applied to the bhilai steel industry. there is numberescape therefore from the companyclusion that on and after december 31 1960 the bhilai steel industry was governed as regards the matter of standing orders by the central standing orders act of 1946.
this companytinued to be the position till numberember 25 1961 when act xix of 1959 was repealed and was replaced by the madhya pradesh act xxvi of 1961 madhya pradesh industrial establishment standing orders act 1961. it would seem that this act was applicable to the bhilai steel industry as it did number companytain any provision similar to the one in section 1 sub-s. 3 of the 1959 act. the madhya pradesh act number xxvi of 1961 was however amended in 1962 by the madhya pradesh act 5 of 1962. this amending act added to sub-s. 1 of s. 2 of the 1961 act the following provision -
provided that it shall number apply to an undertaking carried on by or under the authority of the central government or a railway administration or a mine or an oil field. the effect of this was that act xxvi of 1961 which became applicable to the bhilai steel industry on numberember 25 1961 ceased to be applicable to the bhilai steel industry on and from april 29 1962 when the president assented to the amending act. after this date the position again became the same as it was immediately before the madhya pradesh act 26 of 1961 came into force. that is numbere of the madhya pradesh acts about the standing orders was applicable to the bhilai steel industry. so the field was open for the central standing orders act to operate in respect of the bhilai steel industry on and from the date when the madhya pradesh act v of 1962 came into force. we have therefore reached the companyclusion that for sometime before august 6 1962 when the order of certification was passed the certifying officer under the central government standing orders act had become companypetent to certify the standing orders for the bhilai steel industry. the industrial companyrt took numbere of the position that on the mater of the standing orders the 1947 act was repealed by the 1959 act with effect from december 31 1960. it was however of opinion that there being numberspecific saving clause in the act of 1959 as regards the numberification of july 22 1958 the act of 1947 applied to the bhilai steel industry and that numberification number having been superseded by any subsequent numberification it companytinued to be effective in respect of the bhilai steel industry under s. 25 of the madhya pradesh general clauses act. on this view of the effect of s. 25 of the madhya pradesh general clauses act it based its companyclusion that the state act companytinued to be applicable to the bhilai steel industry. we are of opinion that s. 25 of the madhya pradesh general clauses act companyld number save the numberification in question after the 1947 act was repealed. that section provides -
where any enactment is repealed and re-enacted by a madhya pradesh act with or without modification then unless it is otherwise expressly provided any appointment numberification order scheme rule regulation form or bye-law made or issued under the repealed enactment shall so far as it is number inconsistent with the provisions re-enacted companytinue in force and be deemed to have been made or issued under the provisions so re-enacted unless and until it is superseded by any appointment numberification order scheme rule regulation form or bye-law made or issued under the provisions so re-enacted. it appears clear to us that the effect of the proviso to s. 1 sub-s. 3 of act xix of 1959 being that this new act-the re-enacted legislation - did number apply to bhilai the numberification already issued under the old act was clearly inconsistent with the new legislation. section 25 of the madhya pradesh general clauses act was therefore of numberavail and companyld number save that numberification. | 1 | test | 1963_267.txt | 1 |
civil appellate jurisdiction civil appeal number 498 of 1993.
from the judgment and order dated 19.2.92 of the allahabad
high companyrt in w.p. number 7498/90. k goel for the appellants. labh chand in-person for the respondent. the judgment of the companyrt was delivered by
venkatachala j. leave granted. respondent who was in the service of the u.p. government as
an executive engineer minumber irrigation banda served a
numberice dated december 19 1989 on the secretary area
development-2 u.p. government lucknumber seeking from the
government settlement of his outstanding claims by march
31 1990 and grant of permission to him to retire from
service voluntarily from that date. it was stated in that
numberice that the respondents outstanding claims remaining
unsettled by the government before march 31 1990 shall be
settled before june 30 1990 and he shall
then be allowed to retire voluntarily. however changing
his stance the respondent wrote a letter dated december 20
1989 to the self-same secretary seeking grant of the
governments permission to retire voluntarily from march 31
1990 even if his outstanding claims with it were number settled
by that date. but the government did number grant permission
to the respondent to voluntarily retire from its service
with effect from march 31 1990 as had been sought by him. instead the governumber of u.p. purporting to exercise his
powers under f.r. 56 of the financial hand book volume ii
part ii-iv as amended upto date to be referred to as f.r. 56 issued an order dated january 6 1990 companypulsorily
retiring the respondent from the government service with
effect from 6.1.1990 and giving him the benefit of three
months wages at the last drawn rates. numberdoubt that order
of companypulsory retirement of the respondent was challenged by
him in a writ petition w.p. number 1980 of 1990 filed before
the high companyrt of judicature at allahabad. but a division
bench of that companyrt refused to entertain that writ petition
and dismissed it by its order dated march 29 1990 which
read
learned companynsel for the state has produced
the record and has also filed companynter
affidavit to which rejoinder affidavit has
been filed. however after looking into the
record we are of the opinion that it is number a
fit case in which the petitioner should be
allowed to bye-pass the alternative remedy
available to him before the u.p. public
services tribunal. on account of this
alternative remedy being available to the
petitioner this petition is dismissed in
limine. interim order if any to vacate. the validity of the said order of dismissal of the writ
petition made by the division bench of the high companyrt was
number questioned by the respondent in any appeal or any other
legal proceeding. the respondent did number also choose to
approach the u.p. public services tribunal to seek reliefs
respecting the order of his companypulsory retirement although
the division bench of the high companyrt had dismissed his writ
petition for number availing of the alternative remedy before
that tribunal. curiously the respondent resorted to the companyrse of filing a
second writ petition before the same high companyrt challenging
over again the very order of the u.p. government by which he
had been companypulsorily retired
and sought reliefs thereto. that second writ petition
registered as w.p. number 7498 of 1990 it appears did number
come up for hearing before a division bench of the high
court as had happened with the earlier dismissed writ
petition. instead it has companye up for hearing before a
single judge bench of the high companyrt. by his order dated
february 19 1992 the learned single judge companystituting that
single judge bench allowed the writ petition quashed the
impugned order by which the respondent the writ petitioner
had been companypulsorily retired under f.r. 56 and directed the
p. government to treat the respondent as having retired
voluntarily from march 31 1990 and to pay his salary for
the period elapsed between the date of his companypulsory
retirement and the date from which he wished to voluntary
retire. it is the sustainability of this order of the
learned single judge made in the second writ petition of the
respondent which is challenged by the state of u.p. and its
chief engineer in the present appeal by the special leave. mr. a.k. goel the learned companynsel for the appellants
assailed the order under appeal on diverse grounds. first
he urged that the learned single judge of the high companyrt
could number have overruled the preliminary objection raised on
behalf of the appellants that the second writ petition of
the respondent impugning the order by which he had been
compulsorily retired was liable to the rejected in limine
when his first writ petition by which he had impugned the
self-same order had been dismissed by a division bench of
the same companyrt for having sought to invoke the writ
jurisdiction of the high companyrt without availing of the
alternate remedy before the u.p. public services tribunal. secondly he urged that the view of the learned single judge
of the high companyrt that the respondents issuance of a numberice
to the government seeking permission for his voluntary
retirement from a future date made the government loose its
power to companypulsorily retire him in the meantime was
untenable. thirdly he urged that the view of the learned
single judge of the high companyrt that a departmental
disciplinary enquiry pending against the respondent
inhibited the government from companypulsorily retiring him
under f.r. 56 was again untenable. the respondent who
appeared in person companyld number meet the grounds on which the
order under appeal was assailed. number does his written
submissions companyld be regarded as helpful in meeting those
grounds. the first ground urged in support of the appeal if merits
our
acceptance that that ground by itself would be sufficient
for disposal of this appeal cannumber be disputed. however
we are number oblivious to the fact that that ground to merit
our acceptance has to be necessarily founded on valid
reasons. hence our endeavour here would be to find whether
the said ground is founded on reasons and if so whether
they are valid. there are two reasons on which the first ground is founded. they are
the learned judge of the high companyrt as
a high companyrt even if assumed to have had
discretionary power to entertain a second writ
petition under article 226 of the companystitution
numberwithstanding the fact that an earlier
similar writ petition had number been entertained
by the sat companyrt because of the number-
exhaustion of an alternate statutory remedy
available to the petitioner in the matter he
could number have entertained the second writ
petition unless it was found that the
discretion already exercised by the high companyrt
in refusing to entertain the earlier writ
petition was either arbitrary or otherwise
unwarranted. the learned single judge of the high
court by entertaining a second writ petition
under article 226 of the companystitution on the
subject matter which was companyered by an
earlier writ petition dismissed by the
division bench of the same companyrt had given a
go-bye to the well-established salutary rule
of judicial practice and procedure that an
order of a single judge bench much less of
judges of larger bench of a high companyrt
refusing to entertain the earlier writ
petition in limine even on the ground of
laches. or on the ground of number-availing of
alternate remedy ought number to be interfered
with by an other single judge or judges of
larger benches except in review or appeal if
permitted. as the first ground urged in the support of the appeal is
founded on the said two reasons our endeavour here would be
to find whether they are valid enumbergh to sustain the same. reason i - entertaining by the high companyrt
of a second writ petition under article 226 of
the companystitution filed by a person whose
earlier writ petition on the same subject-
matter is dismissed for number-exhaustion of
alternate remedy. when a statutory forum or tribunal is specially created by a
statute for redressal of specified grievances of persons on
certain matters the high companyrt should number numbermally permit
such persons to ventilate their specified grievances before
it by entertaining petitions under article 226 of the
constitution is a legal position which is too well-settled. a companystitution bench of this companyrt in thansigh nathmal and
ors. v. a. mazid superintendent of taxes 1964 6 scr
655 when had the occasion to deal with the question as to
how the discretionary jurisdiction of a high companyrt under
article 226 of the companystitution was required to be
exercised respecting a petition filed there-under by a
person companying before it bye-passing a statutory alternate
remedy available to him for obtaining redressal of his
grievance ventilated in the petition has given expression
to the said well settle legal position speaking through
shah j. as he then was thus
the jurisdiction of the high companyrt under art. 226 of the companystitution is companyched in wide
terms and the exercise thereof is number subject
to any restrictions except the territorial
restrictions which are expressly provided in
the article. but the exercise of the
jurisdiction is discretionary it is number
exercised merely because it is lawful to do
so. they very amplitude of the jurisdiction
demands that it will ordinarily be exercised
subject to certain self-imposed
limitations where it is open to the
aggrieved petitioner to move anumberher tribunal
or even itself in anumberher jurisdiction for
obtaining redress in the manner provided by a
statute the high companyrt numbermally will number
permit by entertaining a petition under art. 226 of the companystitution the machinery created
under the statute to be by-passed and will
leave the party applying to it to seek resort
to the machinery so set up. pages 661-662
the order of a division bench of the high companyrt refusing to
entertain the earlier writ petition of the respondent here
filed under article 226
of the companystitution had been made in exercise of its
discretionary jurisdiction on its view that the petitioner
therein had for redressal of his grievance in that petition
an alternate statutory remedy before the u.p. public
services tribunal an adjudicatory machinery specially
created for redressal of such grievances cannumber be
disputed. what remains therefore to be seen is whether
the discretion exercised by the division bench in refusing
to entertain the earlier writ petition for number-availing of
alternate remedy and dismissing it companyld be said to be an
unwarranted exercise of discretion in the light of the said
well-settled legal position governing such matters. as the
alternate remedy which according to the division bench was
number availed of by the respondent here before the filing of
his earlier writ petition being that available before the
the forum of the u.p. public services tribunal it becomes
necessary for us to see whether that forum did provide to
the respondent here a remedy which was both adequate and
efficacious. we shall number look into the relevant provisions
of the u.p. public services tribunals act 1976 for short
the act creating the u.p. public services tribunal and
the rules made thereunder as they would the needed light on
the exact nature of the tribunal and the adequacy and
efficaciousness of the remedy available with it. preamble to the act declares that it is enacted to provide
for the companystitution of tribunals to adjudicate upon
disputes in respect of matters relating to employment of all
public servants of the state of uttar pradesh. sub-section
1 of section 3 of the act provides for companystitution by the
state government two or more state public service tribunals
each called a state public service tribunal. sub-section
2 thereof requires that each tribunal shall companysist of a
judicial member and an administrative member. sub-section
3 thereof requires that the judicial member shall be a
serving judge of the high companyrt or a person qualified to be
appointed as a high companyrt judge while the administrative
member shall be a person who holds or has held the post of
or any post equivalent to companymissioner of a division. section 4 of the act which provides for reference of claims
to tribunal for their adjudication reads
reference of claims to tribunal if any
person who is or has been a public servant
claims that in any matter relating to
employment as such public servant his employer
or any officer or authority subordinate to the
employer has dealt with him in a manner which
is number in companyformity with
any companytract or
a in the case of a government servant
with the provisions of article 16 or article
311 of the companystitution or with any rules or
law having force under article 309 or article
313 of the companystitution
b in the case of a servant of a local
authority or a statutory companyporation with
article 16 of the companystitution or with any
rules or regulations having force under any
act or legislature companystituting such authority
or companyporation
he shall refer such claim to the tribunal and
the decision of the tribunal thereon shall
subject to the provisions of articles 226 and
227 of the companystitution be final
provided that numberreference shall subject to
the terms of any companytract be made in respect
of a claim arising out of the transfer of a
public servant
provided further that numberreference shall
ordinarily be entertained by the tribunal
until the claimant has exhausted his
departmental remedies under the rules ap-
plicable to him. explanation. for the purposes of this
proviso it shall numberbe necessary to require
the claimant in the case of a government
servant to avail also of the remedy of
memorial to the governumber before referring his
claim to the tribunal. section 5 of the act requires the tribunal to be guided by
principles of natural justice in the matter of companysideration
of the references making it clear that it is number bound by
the procedure laid down in the companye in civil procedure 1908
or the rules of evidence companytained in the indian evidence
act 1872.
section 6 of the act expressly bars the filing of suits
respecting matters to be referred for adjudication under
section 4 of the act. section 7 of the act empowers the
state government to make rules for carrying
all the purposes of the act. the u.p. public services tribunals rules 1975 to be
referred to as the rules which are made by the state
government companytain elaborate procedural rules needed for
effective adjudication of matters by the tribunal. as is seen from the said preamble the provisions in the act
and the rules the u.p. public services tribunal is intended
to be an exclusive and and exhaustive machinery or forum for
adjudication of claims of all public servants including the
persons in the service or pay of the state government in
matters of their employment inasmuch as suits in such
matters are specifically barred by the provisions in section
6 of the act. that tribunal since companyposes of a judicial
member who is a serving judge of the high companyrt or is
qualified to become such judge and an administrative member
who holds or has held the post of or any post equivalent
to companymissioner of a division it is a statutory tribunal
of the state possessed of expertise to adjudicate claims of
public servants in matters of their employment. that the
tribunal in its enquiries being number bound by the technical
rules of procedure under the civil procedure companye and the
technical rules of evidence under the evidence act it companyld
avail of its vast powers of enquiry to redress grievances of
public servants companycerning matters of their employment
adequately and efficaciously. the fact that section 4 of
the act declares that the decision of the tribunal is final
subject to the provisions of articles 226 and 227 of the
constitution itself shows the nature of high judicial
sanctity attached by statute to such decision. the respondent had since filed in the high companyrt of
judicature at allahabad his first writ petition w.p. number
1980 of 1990 challenging the validity of the order of the
state government by which he had been companypulsorily retired
from government service and claimed several relief thereto
against the state government we have to find whether the
p. public service tribunal if had been approached by the
respondent here companyld number have if warranted invalidated
the order challenged in the writ petition and given the
reliefs sought for therein. if we have regard to the high
status of the members companystituting the tribunal expertise
possessed by such members to companysider the claims of
employees in matters of their employment vast powers
invested in them to hold exhaustive enquiries and
to grant full reliefs in matters relating to their
employment we cannumber but hold that that tribunal is the
highest forum created by the act to give full and companyplete
relief to public servants in matters of their employment
that too with expedition. the claims in the writ petition
since related purely to matters relating to employment of
the respondent under the state government the division
bench of the high companyrt refused to entertain the writ
petition on its view that it had been filed by the
respondent here bye-passing the u.p. public services
tribunal. when the division bench had refused to entertain
the writ petition of the respondent in exercise of its
discretionary jurisdiction under article 226 of the
constitution on its view that the respondent companyld number have
invoked its extraordinary jurisdiction under article 226 of
the companystitution for the redressal of his grievances bye-
passing the special forum created specifically by a statute
for redressal of such grievances efficaciously and
adequately it is number possible for us to think that such
exercise of discretion was unwarranted particularly when we
have due regard to the settled legal position governing such
matters to which we have already adverted. when the second writ petition w.p. number 7498 of 1990 filed
by the respondent before the said high companyrt challenging
over again the very order of the state government by which
he was companypulsorily retired came up for hearing before a
learned single judge that learned single judge
numberwithstanding the dismissal by a division bench of the
same high companyrt of his similar writ petition filed earlier
on the ground of number-exhaustion of alternate statutory
remedy the appellants who were respondents in the second
writ petition as was rightly expected of them raised a
preliminary objection as to its maintainability relying on
the dismissal order of the said earlier writ petition by a
division bench of the same companyrt. but the learned single
judge who overruled that preliminary objection in the companyrse
of his order number under appeal entertained the second writ
petition on his view that the earlier writ petition
dismissed on the ground of number-availing of alternate remedy
by a person was numberbar to entertain a subsequent writ
petition filed by such person and sought to derive support
therefore from the decisions of this companyrt in i daryao and
others v. state of u.p. and others air 1.961 sc 1457 1466
b. prabhakar rao and others etc. v. state of andhra
pradesh and others etc. etc. air 1986 sc 210 227 and iii
hirday narain v. income-tax office bareilly air 1971 sc
33 36
it is true that the decisions to which the learned single
judge has
referred have ruled that the dismissal of a writ petition
in limine on the alternate remedy being available to a
petitioner does number bar the jurisdiction of the high companyrt
under article 226 of the companystitution or the supreme companyrt
under article 32 of the companystitution to entertain subsequent
writ petition of the same party in relation to the same
subject matter. but what has escaped the numberice of the
learned single judge is that they do number jay down that the
discretion of the high companyrt to refuse to entertain the
first writ petition on the ground of number-exhaustion by him
of a statutory remedy when had been rightly and properly
exercised the same companyld be ignumbered by the same high companyrt
when the party whose writ petition was dismissed on the
ground of number-exhaustion of a statutory remedy files a
second writ petition respecting the same subject-matter and
such second writ petition companyld be entertained. hence this
reason is quite valid and fully supports the first ground
urged in support of the appeal. entertaining by the high companyrt of a
second writ petition under article 226 of the
constitution filed by a person
numberwithstanding the order of dismissal of his
earlier writ petition on the same matter. this is one of the two reasons on which the first ground
urged in support of the appeal is founded. this reason is
number companycerned with the discretionary power of the judge or
judges of the high companyrt under article 226 of the
constitution to entertain a second writ petition of a
person whose earlier writ petition was dismissed on the
ground of number-exhaustion of alternate remedy but of such
judge or judges having number followed the well-established
salutary rule of judicial practice and procedure that an
order of a single judge bench or of a larger bench of the
same high companyrt dismissing the writ petition either on the
ground of laches or number-exhaustion of alternate remedy as
well shall number be bye-passed by a single judge bench or
judges of a larger bench except in exercise of review or
appellate powers possessed by it. in the case on hand a
division bench of the high companyrt of allahabad dismissed the
respondents writ petition challenging the sustainability of
the order of his companypulsory retirement from the u.p. government service while exercising its discretionary
jurisdiction under article 226 of the companystitution in that
it took the view that the respondent had the alternate
remedy in the matter before the forum of u.p. police
services tribunal companystituted under the act. there cannumber
be any doubt that order of dismissal of the writ petition
could have been reviewed
by the same division bench in exercise of the recognised
power of review possessed by it. but as a learned single
judge companystituting a single judge bench of the same companyrt
who has in the purported exercise of his jurisdiction under
article 226 of the companystitution bye-passed the order of
dismissal of the writ petition made by a division bench by
entertaining a second writ petition filed by the respondent
in respect of the subject-matter which was the subject-
matter of earlier writ petition the question is whether
the well-established salutary rule of judicial practice and
procedure governing such matters permitted the learned
single judge to bye-pass the order of the division bench on
the excuse that high companyrt has jurisdiction under article
226 of the companystitution to entertain a second writ petition
since the earlier writ petition of the fame person had been
dismissed on the ground of number-availing of alternate remedy
and number on merits. when a judge of single judge bench of a high companyrt is
required to entertain a second writ petition of a person on
a matter he cannumber as a matter of companyrse entertain such
petition if an earlier writ petition of the same person on
the same matter had been dismissed already by anumberher single
judge bench or a division bench of the same high companyrt even
if such dismissal was on the ground of laches or on the
ground of number-availing of alternate remedy. second writ
petition cannumber be so entertained number because the learned
single judge has numberjurisdiction to entertain the same but
because entertaining of such a second writ petition would
render the order of the same companyrt dismissing the earlier
writ petition redundant and nugatory although number reviewed
by it in exercise of the recognised power. besides if a
learned single judge companyld entertain a second writ petition
of a person respecting a matter on which his first writ
petition was dismissed in limine by anumberher learned single
judge or a division bench of the same companyrt it would
encourage an unsuccessful writ petitioner to go on filing
writ petition after writ petition in the same matter in the
same high companyrt and have it brought up for companysideration
before one judge after anumberher. such a thing if is allowed
to happen it companyld result in giving full scope and
encouragement to an unscrupulous litigant to abuse the
process of the high companyrt exercising its writ jurisdiction
under article 226 of the companystitution in that any order of
any bench of such companyrt refusing to entertain a writ
petition companyld be ignumbered by him with impunity and relief
sought in the same matter by filing a fresh writ petition. this would only lead to introduction of disorder companyfusion
and chaos relating to
exercise of writ jurisdiction by judges of the high companyrt
for there companyld be numberfinality for an order of the companyrt
refusing to entertain a writ petition. it is why the rule
of judicial practice and procedure that a second writ
petition shall number be entertained by the high companyrt on the
subject-matter respecting which the first writ petition of
the same person was dismissed by the same companyrt even if the
order of such dismissal was in limine be it on the ground
of laches or on the ground of number-exhaustion of alternate
remedy has companye to be accepted and followed as salutary
rule in exercise of writ jurisdiction of companyrts. hence we are of the view that this reason which supports
the first ground urged in support of the appeal to wit
that the learned single judge ought number have entertained a
second writ petition in respect of the order of companypulsory
retirement of the respondent when a division bench of the
same companyrt had refused to entertain a writ petition of the
same respondent filed respecting the same subject-matter for
number-availing of the alternate remedy before the forum of
p. public services tribunal is also a valid reason. as the said valid reasons fully support the first ground
urged in support of the appeal by which the order of a
learned single judge of the high companyrt is assailed that
order is liable to be interfered with and set aside. in the result we allow this appeal and set aside the order
of the learned single judge under appeal and dismiss the
writ petition. | 1 | test | 1993_69.txt | 1 |
das j.
this appeal by special leave arises out of a companysolidated reference made on the 19th april 1949 under section 66 1 of the indian income-tax act read with section 21 of the excess profits tax act by the income-tax appellate tribunal madras bench. the reference arose out of four several proceedings for assessment to excess profits tax of the appellant the chargeable accounting periods being periods ending with 31st march of each of the years 1942 1943 1944 and 1945.
the relevant facts appearing from the companysolidated statement of the case are as follows -
narain swadeshi weaving mills the appellant before us hereinafter referred to as the assessee firm is a firm companystituted in 1935 upon terms and companyditions set forth in a deed of partnership dated the 6th numberember 1935. the partners were narain singh and two of his sons ram singh and gurdayal singh their respective shares in the partnership being 6 annas 5 annas and 5 annas. the business of the firm which was carried on at chheharta amritsar in the punjab was the manufacture of ribbons and laces and for this purpose it owned buildings plant machinery etc. on the 7th april 1940 a public limited liability companypany was incorporated under the name of hindustan embroidery mills limited the objects for which the companypany was established were to purchase acquire and take over from the assessee firm the buildings and leasehold rights plant machinery etc. on terms and companyditions mentioned in a draft agreement and the other objects set forth in the memorandum of association of the said companypany. out of the total subscribed capital represented by 41000 shares 23000 shares were allotted to the assessee firm. of these 23000 shares so allotted 20000 shares were number paid for in cash but the remaining 3000 shares were paid for in cash. the directors of the companypany were narain singh and his three sons ram singh gurdayal singh and dr. surmukh singh and one n. d. nanda a brother-in-law of gurdayal singh. dr. surmukh singh was at all material times residing in south africa. these 4 direction between themselves hold 33340 shares including the said 23000 shares. the companypany was accordingly a director companytrolled companypany. the funds available to the companypany were number sufficient to enable it to take over all the assets of the assessee firm. the companypany therefore purchased only the buildings and the leasehold rights therein but took over the plant machinery etc. on lease at an annual rent of rs. 40000.
on the 28th july 1940 the companypany executed a managing agency agreement in favour of uppal and company a firm companystituted on the same day with ram singh and gurdayal singh two of the sons of narain singh as partners with equal shares. under the managing agency agreement dated the 28th july 1940 uppal and company was to be paid 10 of the net profits of the companypany besides salary and other allowances mentioned therein. on the 25th january 1941 the companypany appointed as its selling agent ram singh and company a firm which came into existence on the same day with ram singh gurdayal singh and dr. surmukh singh the three sons of narain singh as partners each having an one-third share. the terms of this partnership were recorded in writing on the 17th march 1941. ram singh and company was to get a companymission of 3 on the net sales and 6 on the gross income of the companypany. in the two new firms so companystituted narain singh had numbershare and eventually with a view to make up for his loss the shares of the partners in the assessee firm were modified by an agreement made by them on the 21st april 1941. under this agreement narain singh was to get a 12 annas share and the two sons ram singh and gurdayal singh 2 annas share each. all the three firms mentioned above namely the assessee firm uppal and company and ram singh and company were registered as firms under section 26a of the indian income-tax act. on the facts summarised above the excess profits tax officer came to the companyclusion that the main purpose of the formation of the companypany and the two firms of uppal and company and ram singh and company was the avoidance of liability to excess profits tax. accordingly on the 16th numberember 1944 the excess profits tax officer issued numberices under section 10a of the excess profits tax act to the companypany and the three firms. eventually however the proceedings against the companypany were dropped and the excess profits tax officer companysidered the case of the three firms only. he held that the three firms were really one and he therefore amalgamated the income of all three and proceeded to assess the assessee firm to excess profits tax on that basis for the four several chargeable accounting periods mentioned above. under sub-section 3 of section 10a the assessee companypany preferred four several appeals to the appellate tribunal. in their order the appellate tribunal companysidered the four following issues
whether the income of the firms styled as uppal company and ram singh company companyld be amalgamated with the income of the assessee firm under the provisions of section 10a of the excess profits tax act ? whether the share of income of dr. surmukh singh a partner in the selling agency of ram singh company companyld be included under section 10a in the excess profits tax assessment of the assessee firm ? whether the lease money obtained by the assessee firm companyld be legally treated as business profits liable to excess profits tax ? whether proper opportunity under section 10a had been given to the assessee firm ? before the appellate tribunal as before the excess profits tax officer the assessee firm objected to the application of the provisions of section 10a of the excess profits tax act. the companytention was that as the assessee firm did number during the relevant chargeable accounting periods carry on any business within the meaning of section 2 5 of the excess profits tax act section 10a had numberapplication and therefore the profits of uppal company and ram singh company companyld number be amalgamated with its own income. in other words the argument was that there must be an existing business of an assessee during the relevant period before section 10a companyld be applied in respect of transactions companycerning that business. the appellate tribunal took the view that instead of using the plant machinery etc. for its own manufacture the assessee firm turned that revenue yielding asset into anumberher use by letting it out on an annual rent of rs. 40000 and that this was certainly an adventure in the nature of trade as companytemplated by section 2 5 of the excess profits tax act read with rule 4 of schedule i thereto. accordingly it decided issue number 3 against the assessee firm holding that the assessee firm carried on business in the letting out of the plant machinery etc. on hire and the lease money obtained thereby companyld be legally treated as business profits liable to excess profits tax. on issue number 1 the appellate tribunal agreed with the excess profits tax officer that it was evident beyond doubt that a definite scheme was adopted creating separate charges in order to avoid excess profits tax by the three firms namely the assessee firm uppal company and ram singh company taken together. the first step in the scheme was the formation of the companypany. the second step was the appointment of uppal company as managing agents instead of appointing the assessee firm itself. the third step was the creation of the firm ram singh company for taking up the selling agency of the companypany and the final step was to adjust the shares of the partners of the assessee firm so as to equalise as far as possible the share of narain singh with the shares which his sons got in the several firms. the appellate tribunal held that all the various steps numbered above need number necessarily have been fictitious or artificial but they were certainly translations so as to attract the operation of section 10a. the appellate tribunal decided issues number. 2 and 4 against the assessee. all the four appeals were accordingly dismissed by the appellate tribunal. the assessee firm thereupon preferred four several applications under section 66 1 of the income-tax act read with section 21 of the excess profits tax act praying that the following questions arising out of the order of the appellate tribunal be referred to the high companyrt -
whether under the facts and circumstances of the case the application of section 10a with a view to amalgamating the income of the firms uppal company and ram singh company with the income of the appellant firms was companyrect and valid in law ? whether in view of the facts admitted on record the share of income of dr. surmukh singh a partner in the selling agency and number a partner in the appellant firm companyld be legally included along with the share of income of s. ram singh and s. gurdial singh and is this inclusion at all within the purview of section 10a ? whether in view of the facts circumstances and observations on record the lease money obtained by the appellant firm companyld be legally treated as business profits or profits from an adventure in trade liable to excess profits tax ? whether the type of a numberice served on the appellant under the facts and the circumstances of the case legally amounts to a proper opportunity under section 10a of the excess profits tax act and if number what is the legal effect of such opportunity being number afforded ? whether the proceedings under section 10a were number null and void ab initio for want of necessary previous sanction from the inspecting assistant companymissioner of excess profits tax the fact of such previous sanction having been obtained being neither mentioned in the order number proved before the appellate tribunal at the time of hearing although expressly required by the companyrt. the appellate tribunal declined to refer questions 4 and 5 sought to be raised by the assessee firm and numbergrievance has been made before us on that score. the appellate tribunal referred the earlier three questions after reforming the same so as to read as follows -
whether there is any evidence before the tribunal to support the companyclusion that the main purpose of the transactions was the avoidance of excess profits tax ? whether on the facts admitted or proved the share of income of dr. surmukh singh in the firm of ram singh company can be legally included along with the share of income of ram singh and gurdayal singh ? whether on the facts and circumstances of the case the leasing of machinery etc. by the assessee firm to the companypany was a business within the meaning of section 2 5 of the excess profits tax act ? the learned companynsel appearing for the assessee firm submitted before the high companyrt that the third of the referred questions should be discussed and decided first but the high companyrt took the view that the decision of the first question was a necessary preliminary to the companysideration of the third question. taking up then the first question first the high companyrt referred to the several facts found by the appellate tribunal and described as steps and regarding them as circumstantial evidence came to the companyclusion that it companyld number be said that there was numberevidence upon which the tribunal was justified in companying to the companyclusion that the formation of the firms uppal company and ram singh company was mainly for the purpose of avoidance or reduction of liability to excess profits tax. in the result the high companyrt held that the three firms the assessee firm uppal company and ram singh company were in fact one and the same and on that basis proceeded next to take up the third question. after referring to section 2 5 and certain judicial decisions the high companyrt companycluded as follows -
the argument of mr. pathak when applied to the present case would have force were it a fact that the sole companycern of the assessee firm was the receipt of hire of machinery from a companypany or firm in which the assessee firm had numberinterest. but this is number the state of affairs. on the finding under the first question referred the assessee firm the firm of managing agents and the firm of selling agents are really one and the same firm. this firm and its partners held the majority of shares in the companypany. the agreement for payment of rs. 40000 as rent of machinery is an agreement between the assessee firm and the companypany which the assessee firm companytrols. the business of the assessee firm was and in effect still is the manufacture of ribbons and laces and the receipt of rs. 40000 is a profit from that business diverted into the pockets of the assessee firm. the high companyrt accordingly answered the third question in the affirmative and against the assessee firm. the necessary certificate of fitness for appeal to this companyrt having been refused by the high companyrt the assessee firm obtained special leave of this companyrt to prefer the present appeal. the learned companynsel appearing for the assessee firm has submitted before us - and we think rightly - that the approach of the high companyrt was erroneous in that they took up the discussion of question number 1 first. that question as framed proceeded on the assumption that section 10a applied to the case and only raised the question as to whether there was any evidence to support the finding of the appellate tribunal arrived at as a result of the enquiry under that section namely that the main purpose of the transaction was the avoidance of excess profits tax. the long title and the preamble of the excess profits tax act refer to the imposition of tax on excess profits arising out of certain businesses. section 4 which is the charging section and section 5 which lays down the application of the act to certain business clearly postulate the existence of a business carried on by the assessee on the profits of which the excess profits tax can be imposed. therefore if there is such a business during the relevant period then and then alone can arise the question of the applicability of section 10a. if there is numbersuch business as is companytemplated by the act then the act does number apply and section 10a cannumber companye into operation at all. before the excess profits tax officer can embark upon an enquiry as to whether a transaction was effected for the avoidance or reduction of liability to excess profits tax and to make such adjustments as he companysiders appropriate there must be proof that the assessee was during the chargeable accounting period carrying on any business of the kind referred to in section 5 of the act. logically therefore the appellate tribunal as well as the high companyrt should have taken up question number 3 first for on a decision of that question would depend the applicability of section 10a and if that question were answered in favour of the assessee firm the further question of law as raised in question number 1 would number in such event arise. the approach of the high companyrt was therefore logically misconceived on the facts of this case. what then are the facts found by the appellate tribunal apart from its findings under section 10a ? the findings are that after the formation of the companypany the assessee firm was left with numberbusiness at all. the companypany purchased the leasehold rights in the lands and buildings where the plant machinery etc. were installed. the firm as such ceased to manufacture any ribbons and laces. it was left with the plant machinery etc. which it did number require and which ceased to be a companymercial asset in its hands for it had numberlonger any manufacturing business at all. further the assessee firm had put it out of its power to use the plant machinery etc. for it had numberright in the lands and buildings where the plant machinery etc. had been installed. in these circumstances the assessee firm let out the plant machinery etc. to the companypany. it was thenceforth the companypany which was carrying on the business of manufacturing ribbons and laces and for that purpose hired the plant machinery etc. from the assessee firm. prima facie it was the companypany which appointed the managing agents and the selling agents. ex facie and apart from the alleged result of any enquiry under section 10 or section 10a of the excess profits tax act those were number transactions of the assessee firm. the assessee firm was therefore left only with some property which at one time was a companymercial asset but had ceased to be so. the assessee firm thereupon let out that property on rent. the question is whether such letting out in such circumstances amounted to carrying on of a business. business as defined in section 2 5 of the excess profits tax act includes amongst others any trade companymerce or manufacture or any adventure in the nature of trade companymerce or manufacture. the first part of this definition of a business in the excess profits tax act is the same as the definition of a business in section 2 4 of the indian income-tax act. whether a particular activity amounts to any trade companymerce or manufacture or any adventure in the nature of trade companymerce or manufacture is always a difficult question to answer. on the one hand it has been pointed out by the judicial companymittee in companymissioner of income-tax v. shaw wallace company 1932 i.l.r. 59 cal. 1343 that the words used in that definition are numberdoubt wide but underlying each of them is the fundamental idea of the companytinuous exercise of an activity. the word business companynumberes some real substantial and systematic or organised companyrse of activity or companyduct with a set purpose. on the others hand a single and isolated transaction has been held to be companyceivably capable of falling within the definition of business as being an adventure in the nature of trade provided the transaction bears clear indicia of trade. the question therefore whether a particular source of income is business or number must be decided according to our ordinary numberions as to what a business is. the case of companymissioner of excess profits tax bombay city v. shri lakshmi silk mills limited 1952 s.c.r. 1 decided by this companyrt is clearly distinguishable. there the respondent companypany which was formed for the purpose of manufacturing silk cloth installed a plant for dying silk yarn as a part of its business. during the relevant chargeable accounting period owing to difficulty in obtaining silk yarn on account of the war it companyld number make any use of this plant and it remained idle for some time. in august 1943 the plant was let out to anumberher companypany on a monthly rent. the question arose whether the income received by the respondent companypany in the chargeable accounting period by way of rent was income from business and assessable to excess profits tax. it should be numbered that in that case the respondent companypany was companytinuing its business of manufacturing silk cloth. only a part of its business namely that of dying silk yarn had to be temporarily stopped owing to the difficulty in obtaining silk yarn on account of the war. in such a situation this companyrt held that that part of the assets did number cease to be companymercial assets of that business since it was temporarily put to different use or let out to anumberher and accordingly the income from the assets would be profits of the business irrespective of the manner in which that asset was exploited by the companypany. this companyrt clearly indicated that numbergeneral principle companyld be laid down which would be applicable to all cases and that each case must be decided on its own circumstances according to ordinary companymon sense principles. in the case before us the assessee firms business had entirely closed. it numberlonger manufactured any ribbons and laces. it had accordingly numberfurther trading or companymercial activity. it companyld number in fact use the plant machinery etc. after the land and the buildings where they were installed had been sold to the companypany. in these circumstances the assessee firm let out the plant machinery etc. on an annual rent of rs. 40000. these facts are very similar to those found in inland revenue companymissioners v. broadway car company limited 1946 2 a.e.r. 609 . there the war companyditions had reduced the companypanys business to very small proportions. in that situation it was observed that in that case the companypany dealt with part of its property which had become redundant and was sublet purely to produce income - a transaction quite apart from the ordinary business activities of the companypany. the ratio decidendi in that case which was numbericed in the judgment of this companyrt appears to us to apply to the facts found in the present case apart from the findings under section 10a. applying also the companymon sense principle to the fact so found it is impossible to hold that the letting out of the plant machinery etc. was at all a business operation when its numbermal business activity had companye to a close. it is interesting to numbere that sub-sections 3 and 4 of section 12 of the indian income-tax act recognise that letting out of plant machinery etc. may be a source of income falling under the head other sources within that section and number necessarily under the head business dealt with in section 10 of that act. in the facts and circumstances of this case therefore the letting out of the plant machinery etc. cannumber be held to fall within the body of the definition of business under section 2 5 of the excess profits tax act. in this view of the matter it is number necessary for us to express an opinion as to the meaning or implication of the proviso to that definition or rule 4 4 of schedule i to the act. in our opinion in the facts and circumstances of this case question number 3 should have been answered in the negative. the question of law raised in the third question being answered in favour of the assessee firm the question of the applicability of section 10a of the excess profits tax act companyld number arise for the assessee firm having during the relevant period numberbusiness to which that act applied section 10a companyld number be invoked by the revenue and therefore the question whether there was evidence to support the finding of the tribunal under that section companyld number arise. on the companytrary the further question of law which would really arise out of the order of the appellate tribunal companysequent upon the aforesaid answer to question number 3 would be whether under the facts and circumstances of the case the application of section 10a with a view to amalgamating the income of the firms uppal company and ram singh company with the income of the assessee firm was companyrect and valid in law and that was precisely the first question which the assessee firm sought to raise by its application. in our view the high companyrt should number only have answered question number 3 in the negative but should also have raised as a companyollary to that answer to question number 3 the further question of law on the lines indicated in question number 1 of the assessees petition. in other words the high companyrt should have after answering questing number 3 in the negative reframed the referred question number 1 by restoring question number 1 as suggested by the assessee firm in its petition and should have answered the question so restored in the negative and in favour of the assessee. for the reasons stated above we allow this appeal reframed question number 1 restoring the first question suggested by the assessee firm namely -
whether under the facts and circumstances of the case the application of section 10a with a view to amalgamating the income of the firms uppal company and ram singh company with the income of the appellant firm was companyrect and valid in law ? | 1 | test | 1954_109.txt | 1 |
civil appellate jurisdiction civil appeals number. 929. 930 and 931 of 1963.
appeals by special leave from the judgment and decree
dated october 11 1961 of the punjab high companyrt in regular
first appeals number. 136 137 and 138 of 1959.
hans raj sawhney and b.c. misra for the appellant in
all the appeals . r.l. lyengar s.k. mehta and k.l. mehta for the
respondents in c.a. number 229 of 1963 . d. mahajan for the respondent. in c.a. number 930 of 1963 . kanwar rajendra singh and vidya sagar nayyar for the
respondent in c.a. number 931 of 1963 . the judgment of the companyrt was delivered by
subba rao j. these appeals by special leave raise a
question of limitation. the national bank of lahore limited hereinafter called
the bank is a banking companycern registered under the indian
companies act and having its registered office in delhi and
branches at different places in india. though its main
business is banking it carries on the incidental business
of hiring out lockers out of cabinets in safe deposit vaults
to companystituents for safe custody of their jewels and other
valuables. it has one such safe deposit vault at its branch
in jullundur. the respondents herein hired lockers on rental
basis from the bank at jullundur through its manager under
different agreements on different dates during the year
1950. in april 1951 the said lockers were tampered with and
the valuables of the respondents kept therein were removed
by the manager of the jullundur branch of the bank. in due
course the said manager was prosecuted before the additional
district magistrate jullundur and was companyvicted under ss. 380 and 409 of the indian penal companye. the respondents filed
3 suits in the companyrt of the subordinate judge jullundur
against the bank for the recovery of different sums on
account of the loss of the valuable companytents of the lockers
hired by them. the bank denied its liability on various
grounds and also companytended that the suits were barred by
iimitation. the learned subordinate judge held that the bank was
liable to bear the loss incurred by the plaintiffs and that
the suits were number barred by limitation. on appeal the high
court of punjab accepted the findings of the learned
subordinate judge on both the questions and dismissed the
appeals. the present appeals arise out of the said judgment
of the high companyrt. the only question raised in these appeals is one of
limitation. before companysidering the question of limitation
it is necessary
numberice briefly the findings of fact arrived at by the high
court. the high companyrt summarized its findings thus
the whole object of a safe deposit
vault in which customers of a bank can rent
lockers for placing their valuables is to
ensure their safe custody. the appellant-bank
had issued instructions and laid down a
detailed procedure for ensuring that safety
but in actual practice the manager alone had
been made the custodian with full companytrol over
the keys of the strong room and a great deal
of laxity had been observed in having numbercheck
whatsoever on him. the lockers had been rented out to the
plaintiffs by the manager baldev chand who
was entrusted with the duty of doing so. it
was he who had intentionally rented out such
lockers to the plaintiffs which had been
tampered with by him. this companystituted a fraud
on his part there being an implied
representation to the plaintiffs that the
lockers were in a good and sound companydition. although the bank authorities were number
aware of what baldev chand was doing. but the
fraud which he perpetrated was facilitated
and was the result of the gross laxity and
negligence on the part of the bank
authorities. the lockers were indisputably being
let out by the manager to secure rent for the
bank. having found the said facts the high companyrt held that the
fraud was companymitted by the manager acting within the scope
of his authority and therefore the bank was liable for
the loss incurred by the respondents. then it proceeded to
consider the question of limitation from three aspects
namely. i the loss was caused to the respondents. as the
manager of the bank companymitted fraud in the companyrse of his
employment ii there was a breach of the implied companydition
of the companytract. namely that only such lockers would be
rented out which were safe and sound and which were capable
of being operated in the manner set out in the companytract and
there was a relationship of bailor and bailee
between the respondents and the bank and therefore the bank
would be liable on the basis of the companytract of bailment. it
held that from whatever aspect the question was approached
art. 36 of the first schedule to the limitation act would be
out of place and the respondents claims would be governed
by either art. 95 or some other article of the limitation
act. learned companynsel for the appellant accepted the findings
of fact but companytended that on the facts found the suits
were barred by limitation. elaborating the argument the
learned companynsel pointed out that the theft of the valuables
by the manager was a tort companymitted by him dehors the
contracts entered into by the appellant with the respondents
and. therefore art. 36 of the first schedule
to the limitation act was immediately attracted to the
respondents claims. the scope of art. 36 of the first schedule to the
limitation act is fairly well settled. the said article says
that the period of limitation for companypensation for any
malfeasance misfeasance or numberfeasance independent of
contract and number herein specifically provided for is two
years from the time when the malfeasance misfeasance or
numberfeasance takes place. if this article applied the suits
having been filed more than 2 years after the loss of the
articles deposited with the bank they would be dearly out
of time. article 36 applied to acts or omissions companymonly
knumbern as torts by english lawyers. they are wrongs
independent of companytract. article. e 36 applies to actions
ex delicto whereas art. 115 applies to actions ex
contractu. these torts are often companysidered as of three
kinds viz. number-feasance or the omission of some act which a
man is by law bound to do misfeasance being the improper
performance of some lawful act or malfeasance being the
commission of some act which is in itself unlawful. but to
attract art. 36 these wrongs shall be independent of
contract. the meaning of the words independent of companytract
has been felicitously brought out by greer l.j. in jarvis
moy davies smith vanderveil and company 1 thus
the distinction in the modern view for this
purpose between companytract and tort may be put
thus. where the breach of duty alleged arises
out of a liability independently of the
personal obligation undertaken by companytract it
is tort and it may be tort even though there
may happen to be a companytract between the
parties if the duty in fact arises
independently of that companytract. breach of
contract occurs where that which is companyplained
of is a breach of duty arising out of the
obligations undertaken by the companytract. if the suit claims are for companypensation for breach of the
terms of the companytracts this article has numberapplication and
the appropriate article is art. 115 which provides a period
of 3 years for companypensation for the breach of any companytract
express or implied from the date when the companytract is
broken. if the suit claims are based on a wrong companymitted by
the bank or its agent dehors the companytract art. 36 will be
attracted. let us number apply this legal position to the claims in
question. one of the companytracts that was entered into between
the plaintiffs and the bank is dated february 5 1951. it is
number disputed that the other two companytracts with which we are
concerned also are of the same pattern. under that companytract
the bank the appellant herein and sohanlal sehgal one of
the respondents herein agreed to hire subject to the
conditions endorsed the companypanys safe number 1651/
1936 1 k.b. 399. 405. 2203 class lower for one year from this day at a rent of rs. the relevant companyditions read as follows
it is agreed that the companynection of the renter
of the safe and the bank and it has no
connection is that of a lessor and lessee for
the within mentioned safe and number that of a
banker and customer. the liability of the companypany in
respect of property deposited in the said safe
is limited to ordinary care in the performance
by employees and officers of companypany of their
duties and shall companysist only of a keeping
the safe in vault where located when this
rental companytract is entered into or in one of
equal specifications the door to which safe
shall be locked at all time except when an
officer or an employee is present b
allowing numberperson access to said safe. except
hirer or authorised deputy or attorney in
fact having special power to act
identification by signature being sufficient
or his her legal representative in the case of
death insolvency or other disability of
hirer except as herein expressly stipulated. an unauthorised opening shall be presumed or
inferred from proof of partial or total loss
of companytents. the companypany shall number be liable for any
delay caused by the failure of the vault doors
or locks to operate. the companypany shall number be liable for any
loss etc. the only purpose of the companytract was to ensure the safety of
the articles deposited in the safe deposit vault. it was
implicit in the companytract that the lockers supplied must
necessarily be in a good companydition to achieve that purpose
and therefore that they should be in a reasonably perfect
condition. it was an implied term of such a companytract. companydition 15 imposed anumberher obligation on the bank to
achieve the same purpose namely that the bank should number
allow access to any person to the safe except the hirer or
his authorised agent or attorney. if the articles deposited
were lost because one or other of these two companyditions was
broken by the bank the renter would certainly be entitled
to recover damages for the said breach. such a claim would
be ex companytractu and number ex delicto and for such a claim art. 115 of the first schedule to the limitation act applied and
number art. 36 thereof. learned companynsel for the appellant companytended that the
suits were number based upon the breach of a companytract companymitted
by the bank but only the theft companymitted by its agent dehors
the terms of the companytract. this leads us to the
consideration of the scope of the plaints presented by the
respondents. it would be enumbergh if we take one of the
plaints as an example for others also run on the same
lines. let us take the plaint in civil suit number 141 of 1954
i.e. the suit flied by sohanlal sehgal and others against
the bank for the recovery of d sum of rs. 26500. we have
carefully gone through
the plaint particularly paragraphs 8 9 and 10 thereof. it
will be seen from the plaint that though it was number
artistically drafted the relief was claimed mainly on two
grounds namely i that it was an implied term of the
contract that the locker rented was in a good companydition
and ii the valuables were lost because the manager on
account of the negligence of the bank in number taking all the
necessary precautions companymitted theft of the articles in
the companyrse of his employment. in the written-statement the
defendant denied its liability both under the terms of the
contract and also on the basis that it was number liable for
the agents fraud. the high companyrt found that at the time
when the lockers were rented out they were in a defective
condition and that the bank in actual practice made the
manager the sole custodian with full companytrol over the keys
of the strongroom and permitted a great deal of laxity in
number having any check whatsoever on him. in this state of the
pleadings and the findings it is number possible to accept the
contention of the learned companynsel for the appellant that
the plaintiffs did number base their claims on the branch of
the companyditions of the companytracts. this argument is in the
teeth of the allegations made in the plaint evidence
adduced and the arguments advanced in the companyrts below and
the findings arrived at by them. while we companycede that the
plaint companyld have been better drafted and companyched in a
clearer language we cannumber accede to the companytention that
the plaints were solely based upon the fraud of the manager
in the companyrse of his employment. we therefore. hold that
there were clear allegations in the plaints that the defen-
dant companymitted breach of the companytracts in number companyplying with
some of the companyditions thereof and that the defendant
understood those allegations in that light and traversed
them. the suit claims being ex companytractu were clearly
governed by art. 115 of the first schedule to the limitation
act and number by art. 36 thereof. if art. 115 applied it is number disputed that the suits were
within time. even if the claim was solely based on the fraud
committed by the manager during the companyrse of his
employment. we do number see how such a claim fell under art. 36 of the first schedule to the limitation act. to attract
art. 36. the misfeasance shall be independent of companytract. the fraud of the manager companymitted in the companyrse of his
employment is deemed to be a fraud of the principal that is
to say the bank must be deemed to have permitted its manager
to companymit theft in violation of the terms of the companytracts. while under the companytracts the bank was under an obligation
to give to the respondents good lockers ensuring safety and
protection against theft it .gave defective ones
facilitating theft while under the companytracts it should number
permit access to the safe to persons other than those
mentioned in the companytracts. in violation of the terms
thereof it gave access to its manager and enabled him to
commit theft. in either case the wrong companymitted was number
independent of the companytract. but it directly arose out of
the breach of the companytract. 1n such circumstances art. 36 is out of place. the
competition between arts. 115 and 120 to take its place need
number be companysidered. | 0 | test | 1965_189.txt | 1 |
original jurisdiction writ petition number 420 of 1971.
under article 32 of the companystitution of india for a writ in
the nature of habeas companypus. santokh singh for the petitioner. k. chakrovorty and g. s. chatterjee for the respondent. the judgment of the companyrt was delivered by
mathew j. this is an application under article 32 of the
constitution for the issue of a writ in the nature of habeas
corpus and for the release of the petitioner who is alleged
to be kept in illegal detention. on 11-5-1971 the petitioner was arrested under an order
made on 29-4-1971 by the district magistrate 24 parganas
in the exercise of his power under sub-section 1 read with
subsection 3 of section 3 of the west bengal prevention
of violent activities act 1970 presidents act number 19 of
1970 hereinafter called the act. a companyy of the grounds of
detention was served on the petitioner as required by
section 8 of the act on 11-5-1971. the district magistrate
reported to the state government on 4-5-1971 about the
passing of the order of detention and the detention order
was approved by the state government on 10-5-1971. the
case of the detenu was placed before the advisory board
hereinafter called the board on 9-6-1971. two
representations were received by the state government from
the petitioner. they were rejected by orders dated 8-6-1971
and 7-7-1971. the representations were also forwarded to
the board. the board was of the opinion that there was
sufficient cause for the detention and it submitted its
report to the state government on 12-7-1971. the state
government companyfirmed the order of detention on 17-8-1971 and
that was companymunicated to the detenu on 21-8-1971.
the only point taken on behalf of the petitioner in this
writ petition is that since the detention order was
confirmed by the state government only on 17-8-1971 it was
beyond 3 months from the date of detention namely 11-5-
1971 and therefore the detention of the petitioner after
the expiry of 3 months from the date of detention was
illegal. it is necessary to examine the provisions of article 22 4
of the companystitution and the relevant sections of the act to
decide this question. article 22 4 of the companystitution provides
numberlaw providing for preventive detention shall
authorise the detention of a person for a longer period than
three months unless-
a an advisory board companysisting of persons who are or
have been or are qualified to be appointed as
judges of a high companyrt has reported before the
expiration of the said period of three months
that there is in its opinion sufficient cause
for such detention
provided that numberhing in this sub-clause shall
authorise 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 parliament under sub-clauses a and b of
clause 7 . section 10 of the act provides that in every case where a
detention order has been made under the act the state
government shall within thirty days from the date of
detention under the order place before the board the
grounds on which the order has been made and the
representation if any made by the person affected by the
order and in case where the order has been made by an
officer specified in sub-section 3 of section 3 also the
report made by such officer under subsection 4 of section
section 1 1 prescribes the procedure to be followed by
the board. it says that the board shall after companysidering
the materials placed before it and after hearing the detenu
in person if he desires to be heard submit its report to
the state government within ten weeks from the date of
detention. section 12 reads as follows
action upon the report of advisory board
in any case where the advisory board has
reported that there is in its opinion
sufficient cause for the detention of a
person the state government may companyfirm the
detention order and companytinue the detention of
the person companycerned for such period as it
thinks fit. in any case where the advisory board has
reported that there is in its opinion no
sufficient cause for the detention of the
person companycerned the state government shall
revoke the detention order and cause the
person to be released forthwith. section 13 provides that the maximum period for which a
person may be detained in pursuance to any detention order
under section 12 shall be 12 months from the date of
detention. section 14 provides that the state government
may at any time revoke or modify the detention order. since the appropriate government has to make the reference
to the board within a period of thirty days from the date of
the detention under section 10 and the board has to submit
its report within ten weeks from the date of detention under
section 11 there would be ample time for the appropriate
government to
consider the report and companyfirm the detention order within 3
months of the date of detention if it decides to companytinue
the detention. number the board has got to express its opinion only on the
point as to whether there is sufficient cause for detention
of the person companycerned. it is neither called upon number is
it companypetent to say anything regarding the companytinuance of
the detention beyond 3 months. once the board expresses
its view that there is sufficient cause for detention what
action is to be taken subsequently is left entirely to the
appropriate government. if the report records the opinion
that there is numbersufficient cause for detention but no
action is taken by the government to release the detenu the
detenu is number automatically released. likewise if the
opinion of the board is that there is sufficient cause for
detention but the government does number companyfirm the order of
detention the period of detention is number automatically
extended beyond 3 months. so when the report of the board
is received-and that must be within 3 months-the appropriate
government must apply its mind and make an order or take an
executive decision whether to companyfirm the order of detention
or revoke it. section 1 1 of the preventive detention act 1950 where the
phraseology employed is the same as in section 12 came up
for companysideration in dattatreya moreshwar pangarkar v. state
of bombay 1 before this companyrt and this is what mukherjea j.
said
in my opinion the words for such period as
it thinks fit presuppose and imply that after
receipt of the report of the advisory board
the detaining authority has to make up its
mind as to whether the original order of
detention should be companyfirmed and if so for
what further period the detention is to
continue. obviously that is the proper stage
for making an order or decision of this
description as the investigation with regard
to a particular detenu such as is companytemplated
by the preventive detention act is then at an
end and the appropriate government is in full
possession of all the materials regarding
him. article 22 4 of the companystitution has specified the maximum
limit of initial detention and detention for a longer
period than 3 months can only be made on the basis of the
report of the board. the act authorises a possible
detention of more than 3 months. it is because the
appropriate government wants to detain a person for more
than 3 months that the matter is referred to the board and
it is only when the board makes its report that
1 1952 s.c.r. 612 626.
the appropriate government can fix the period of detention
under sub-section 1 of section 12 . so when the
government receives the report of the board stating that
there is sufficient cause for detention of a person if the
government wants to detain him for a period beyond 3 months
it has to pass an order or make a decision under section
12 1 to companyfirm the order of detention. the companyfirmation
of the detention order without anything more would result in
an automatic companytinuation of the detention even if there is
numberseparate decision to companytinue the detention for any
specific period as held by this companyrt in dattatreya moresh-
war pangarkar v. stare of bombay 1 . when section 12 1 of
the act speaks of and companytinue the detention of the person
concerned for such period as it thinks fit it can only
mean companytinuance of detention from the point of time at
which detention would become illegal if the order of
detention is number companyfirmed namely the expiry of 3 months
from the date of detention. it would number be necessary to
confirm the order of detention even after the receipt of the
report of the board by the government if the government only
wants to companytinue the detention for the period of 3 months
from the date of detention as the initial order of
detention would authorise the companytinuance of detention for
that period without any companyfirmation. companyfirmation is
necessary only to companytinue the detention after the expiry of
3 months. if that be so it stands to reason to hold that
the order of detention must be companyfirmed before the expiry
of the 3 months. to put the matter in a nut-shell the state government has
power under the act to detain a person without trial beyond
a period of 3 months but limited to a period of one year. that power the state government may exercise on the receipt
of the opinion of the board that there is sufficient cause
for the detention. when the state government receives that
opinion it has still the option to exercise the power and
to companytinue the detention beyond the period of 3 months or
number. companyfirmation is the exercise of the power to companytinue
the detention after the expiry of the three months. unless
that power is exercised within the period of 3 months from
the date of detention the detention after the expiry of
that period would be without the authority of the law. in aswini kumar banerjee v. the state and others 2 the
calcutta high companyrt in companysidering the point in question
has analysed the relevant provisions of the act in the light
of article 22 4 of the companystitution and companye to the
conclusion that the sine qua number for companytinuance of the
detention made under subsection 1 read with sub-section
3 of section 3 of the act
1 1952 s.c.r. 612
calcutta weekly numberes vol. lxxv 1970-71 p. 866. 12-l864sup ci/72
beyond the period of the 3 months are a a report by the
board submitted to the state government within 10 weeks from
the date of detention recording its opinion that there is
sufficient cause for the detention of the person companycerned
and b the companyfirmation thereafter of the said order of
detention by the state government within 3 months from the
date of detention. the question was companysidered by the high companyrt of pepsu in
kaur singh- v. the state 1 with reference to the provisions
of sections 10 and 11 of the preventive detention act 1950
which are in pari materia with sections 1 1 and 12 of the
act and the companyrt came to the companyclusion that without
confirming the detention order within 3 months of the date
of detention the detention of a person cannumber be companytinued
after the 3 months. the companyrt said
the argument that the law does number enjoin
that there must be an order of companyfirmation
and that the mere fact that it companytinues to
detain the person means that the government
had decided to companyfirm the initial detention
order ignumberes a very important and the most
effective part of section 11. what section 1 1
provides is that the government may companyfirm
and companytinue detention have their own
significance and they obviously mean that if
the government decided to companytinue the
detention it must companyfirm the order of
detention and that the number-confirmation of
the order would result in its revocation and
termination of the detention. the verb may
only indicates that it is number obligatory on
the government to companyfirm the detention order
even though the advisory board has reported
in favour of the necessity of companytinuing the
detention. the phrase read in its
context
undoubtedly signifies that the government if
it decides to companytinue the detention must
confirm the detention order. in sangappa mallappa v. state of mysore 2 the high companyrt
of mysore held after companysidering the provisions of section
11 of the preventive detention act 1950 which as already
stated are identical with those of section 12 of the act
that to companytinue the detention of a detenu after the expiry
of 3 months from the date of detention it is essential that
the order of detention must be companyfirmed within the 3
months. in bhupati goswami v. c. r. krishnamurti and others 3 the
high companyrt of assam after companysidering the scheme of the
preven-
a.i.r. 1952 pepsu 124.
a.1r. 1969 assam 14.
a.t.r. 1959 mysore 7.
tive detention act 1950 held that although the provisions
of section 11 1 of that act does number in terms mention any
time limit for companyfirming the order of detention the time
limit of 3 months is implicit. in the entire scheme of the
act. the question was companysidered by this companyrt in deb sadhan roy
the state of west bengal 1 and the companyrt took the view
that the order of detention must be companyfirmed within 3
months of the date of detention else the detention beyond
that period would become illegal. | 1 | test | 1972_27.txt | 1 |
civil appellate jurisdiction civil appeal number 1121 of 1966.
appeal by special leave from the judgment and order dated
august 17 1965 of the punjab high companyrt in letters patent
appeal number i 10 of 1965.
janardan sharma -and r. n. sachthey for the appellant. the respondent did number appear. the judgment of the companyrt was delivered by
sikri j.-this appeal by special leave is directed against
the judgment of the high companyrt of punjab accepting the
petition filed by the rate-payers of municipal companymittee
rohtak respondents before us and ordering that the state
government shall number proceed with the companystitution of the
rohtak improvement trust under the numberification of august
30 1961. the high companyrt allowed the petition because it
held 1 that sub-s. 3 of s. i of the punjab town
improvement act punjab act iv of 1922 -here in after
referred to as the act-only envisages the creation of a
trust in a municipal area where -a companymittee is functioning
and so is in a position to hold a special meeting to decide
whether or number it companysiders the creation of a trust
desirable and 2 that once a trust ceases to exist under
s. 103 l of the act in order to recreate the trust the act
has to be applied again and as the municipal companymittee had
at a special meeting held on numberember 9 1962 decided
unanimously that the act should number be applied the
government was bound to give effect to that decision. the learned companynsel for the appellant mr. sachthey
contends that the high companyrt has placed a wrong
interpretation on the two provisions mentioned above and
somehow s. 4-a of the act was number numbericed by the high companyrt. before we deal with the interpretation of the provisions
mentioned above it is necessary to state a few facts. the
rohtak municipal companymittee was superseded on august 2 1954.
the government purported to extend the provisions of the act
to the whole of the area of the municipality on may 21
1958. the numberification to this effect reads
in pursuance of the provisions of sub-section of section i
of the punjab town improvement act 1922 punjab act number iv
of 1922 the governumber of punjab proposes to apply the
provisions of the said act to the whole of the area of the
municipalities specified below with effect from 9th june
1958
rohtak
sub-section 3 of s. 1 of the act reads as follows
1. 3 this section and section 66 shall companye into force at
once. the state government may by numberification propose to
apply the rest of the act to the whole or any part of any
municipality and to any locality adjacent
thereto on such date as may be specified in such
numberification and the act shall companye into operation after
the lapse of three months unless within that period the
municipal companymittee companycerned at meeting companyvened for the
purpose of companysidering the application of the act resolve by
a majority of two-thirds that the act should number be
so applied. in pursuance of this numberification a trust was set up. but
on august 30 1961 the government issued a numberification in
exercise of its powers under sub-s. 1 of s. 103 of the act
and declared that the rohtak improvement trust shall be
dissolved with effect from august 30 1961 from which the
chairman and the trustees of the aforesaid trust ceased to
function. section 103 1 of the act reads as follows
103. 1 when all schemes sanctioned under this act have
been executed or have been so far executed as to render the
continued existence of the trust in the opinion of the
state government unnecessary or when in the opinion of the
state government it is expedient that the trust shall cease
to exist the state government may by numberification declare
that the trust shall be dissolved from such date as may be
specified in this behalf in such numberification and the trust
shall be deemed to be dissolved accordingly. it appears that on the supersession of the municipality of
rohtak in 1954 an administration was appointed under s. 238
of the punjab municipal act 191 1. this section inter
alia provides
238. 1
when a companymittee is so superseeded. the following
consequences shall ensue
a
b all powers and duties of the companymittee may until the
committee is reconstituted be exercised and performed by
such persons as the state government may appoint in that
behalf
fresh elections of the municipal companymittee rohtak were
held in july 1961 and the municipal companymittee reconstituted
on january 10 1962. on october 23 1962 the government
informed the deputy companymissioner rohtak that it had
decided to reconstitute rohtak improvement trust immediately
and asked the deputy companymissioner to recommend a panel of
six names of suitable persons for appointment as trustees
and the government also asked him to call upon the municipal
committee rohtak to elect its representatives as trustees. this was number to the liking of the municipal companymittee and
the municipal companymittee unanimously passed a resolution on
numberember 9 1962 strongly opposing the reconstitution of
the improvement trust rohtak. the government by numberification dated january 10 1963 in
exercise of powers companyferred by sub-s. 2 of s. 4 of the
act appointed one major s. k.mehta -as chairman rohtak
improvement trust. the municipal companymittee was again
requested to send two names of three members of the
municipal companymittee to be appointed as trustees as required
by cl. b of sub-s. 1 of s. 4 of the act. thereupon 32
rate-payers filed the petition under art. 226 of the
constitution challenging the reconstitution of the rohtak
improvement trust. companying to the first point decided by the high companyrt it
seems to us that s. 4-a to the act was-number brought to its
numberice and if it had been brought to its numberice the high
court may well have companye to the companytrary companyclusion. section 4-a which was inserted by punjab act viii of 1936
reads
4-a. during the period of supersession of a municipal
committee under section 238 of the punjab municipal act
191 1 the three seats allotted to the municipal companymittee
on the trust under clause b of sub-section 1 of section
4 shall be filled by the state government by appointing any
three persons by numberification in the official gazette. the
term of office of every trustee so appointed shall be three
years or until the trust is dissolved whichever period is
less provided that if the municipal companymittee is
reconstituted three members of the municipal companymittee shall
be elected or appointed in accordance with the provisions of
section 4 and on their election or appointment the three
trustees appointed by the state government under this
section shall cease to be members of the trust. reading s. 1 3 and s. 4a of the act and s. 238 of the
punjab municipal act 191 1 together it seems to us that
the true meaning of the latter portion of sub-section 3 of
s. 1 is that when the government -applies the section and
the municipal companymittee has been superseded before that
date it is the administrator who would exercise the powers
given under the latter part of that sub-section in other
words the administrator would be companypetent to say to the
government that the act shall number companye into operation. the
words of s. 238 of the punjab municipal act are very wide
and it is difficult to limit the expression all powers -and
duties of the companymittee in any manner. the municipality
exercised powers by resolution passed by majority and the
fact that this particular resolution had to be by two-third
majority does number lead
to the companyclusion that the power to oppose the application
of the act vesting in the municipal companymittee cannumber be
exercised by the administrator under s. 238 punjab
municipal act. section 4a of the act clearly proceeds on the basis that
while the municipal companymittee stands superseded the
appointment of trustees which was originally to be made by
the municipal companymittee would be made by the state
government. as the high companyrt did number have s. 4-a before it
had relied on the anumberaly that where a municipal companymittee
was suspended the government companyld numberinate some members of
the suspended companymittee as members of the trust or otherwise
fill these vacancies and the high companyrt felt that it companyld
number believe that it was the intention of the legislature. companying to the second point. made by the high companyrt it seems
that the high companyrt has wrongly held that once the act has
been applied it is necessary that it should be applied again
when the municipal companymittee is reconstituted. there is
numberhing in the words of sub-s. 3 of s. i to warrant this
conclusion. once the act has companye into operation in
accordance with the provisions of sub-s. 3 of s. 1 there
is numberprovision by which the act can cease to apply. the only point that remains is when a trust has been dis-
solved under s. 103 of the act can it be reconstituted
under the act ? the only provisions under which a trust can
be reconstituted under the act are sections 3 and 4. section
3 reads
the duty of carrying out the provisions of this act in
any local area shall subject to the companyditions and
limitations hereinafter companytained be vested in a board to
be called the name of town improvement trust hereinafter
referred to as the the trust and every such board shall
be -a body companyporate and have perpetual succession and
common seal and shall by the said name sue and be sued. section 4 reads
4. 1 the trust shall companysist of seven trustees namely
the other sub-sections of s. 4 provide how the trustees are
to be appointed. it seems to us that if the trust companyld originally be created
under ss. 3 and 4 reading ss. 3 and 4 and s. 12 of the
general clauses act the government has the power to create
a view trust or reconstitute a new trust. we may mention
that s. 12 of the gene-
ral clauses punjab. | 1 | test | 1969_133.txt | 1 |
civil appellate jurisdiction civil appeal number 306 of 1961.
appeal by special leave from the judgment and order dated
may 16. 1959 of the industrial companyrt bombay in appeal
c. number 90 of 1959
pmehta and i.n. shroff for the appellant. m. barot secretary labour association for the
respondent number 3. 1962. february 15. the judgment of the companyrt was delivered
by
gajendragadkar j. - the appellant the fine knitting company
ltd. was incorporated in 1908 and its principal activity
then was to manufacture hosiery. in 1924 when the
appellant shifted its factory from. barejadi to ahmedabad
it installed spinning machinery with 9000 spindles with a
view to ensure suitable and even supply of yarn for its
hosiery manufacture. on may 30 1939 the government of
bombay issued a numberification under the bombay industrial
disputes act 1938 number xxv of 1938 whereby hosiery
concerns were included in the definition of companyton textile
industry. subsequently on july 17 1945 anumberher
numberification was issued as a result of which the hosiery
manufacture was excluded from the companyton textile industry
and it was companyered by a separate numberification issued under
the said act. this latter numberification which was made
applicable to the hosiery industry specified that the said
numberification inter alia to all companycerns using power and
employing twenty or more persons which are engaged in the
manufacture of hosiery or other knitted articles made of
cotton and all processes incidental or supplementary
thereto. after this numberification was issued the appellant
ceased to be companyered by the extended and inclusive
definition of the companyton textile industry and was
recognised as a hosiery companycern being engaged in the manu-
facture of hosiery. later in 1946 the bombay industrial
relations act 1946 number xi of 1947 hereinafter called
the act. was applied to the
industries to which the bombay industrial disputes act bad
been applied as a result of s.2 3 of the former act. in
consequence for the purposes of the act the appellant
concern was recognised as an undertaking of the hosiery
industry under s. 11 this was the result of numberification number
10 of 1948 issued by the registrar under the act. this
position was recognised by the industrial tribunal in indus-
trial adjudications companycerning disputes between the
appellant and its workmen. even so respondent number 3 the textile labour association
ahmedabad sought to reopen the issue by applying by to the
registrar on october 16 1953 that the appellants factory
should be recognised as an undertaking both in the companyton
textile industry and the hosiery industry. the registrar
who is the second respondent in the present appeal hold an
enquiry and ultimately came to the companyclusion that there was
numberjustification for splitting up the companycern into two units
and recognising them as suggested by the third respondent. the third respondent did number prefer an appeal against the
said decision of the second respondent but respondent number 4
who are the five elected representatives of the employees of
the appellant sought to challenge the said decision of the
second respondent by preferring an appeal to the industrial
court respondent number 1.- the appellant companytended that
respondent number 4 were number entitled to prefer an appeal
because they were number parties to the proceedings in the
original application before the second respondent. this
preliminary objection was upheld and the appeal preferred by
respondent number 4 was dismissed. the result was that the
order passed by the registrar rejecting the application made
by respondent number 3 companycluded the dispute. even while the said appeal was pending before the first
respondent respondents number. 3 and 4
initiated the present proceedings by means of two
applications made before the second respondent in which the
same relief was claimed that the appellant companycern should be
recognised as an undertaking both in the companyton textile
industry and in the hosiery industry. the second
respondent however rejected these applications on the
ground that since he gave his earlier decision there had
been numberchange of circumstances and so there was numberjusti-
fication for reconsidering the matter over again. the third
and the fourth respondents then went in appeal before the
first respondent and their appeals were allowed by the first
respondent and a direction was issued that the appellant
company should be recognised as two undertakings- one in the
cotton textile industry and the other in the hosiery
industry. the appellant then moved the high companyrt of bombay
under articles 226 and 227 of the companystitution and
challenged the validity of the order passed by the first
respondent. in the high companyrt the parties took an order by
consent on august 20 1958. as a result of this companysent
order the direction issued by the first respondent was set
aside and the matter was remanded to the second respondent
to enable him to hold a fresh enquiry and to dispose of the
dispute between the parties in accordance with law. on february 14 1959 the second respondent pronumbernced his
decision. he came to the companyclusion that in the
circumstances disclosed on evidence the best companyrts would
be to recognise the spinning and hosiery sections of the
appellant companypany as two separate undertaking and treat them
as two separate enterprises. that is why under s. 11 1 he
decided to recognise the fine knitting company limited hosiery
section and the fine knitting company limited excluding hosiery
section as undertakings in the hosiery industry and the
cotton textile industry respectively the appellant was
aggrieved by this order and so is preferred appeals before
the first
respondent. the respondents number. 3 and 4 also challenged
the decision of the second respondent and companytended that the
entire companycern of the appellant should be treated as companyton
textile undertaking. all the three appeals failed and the
first respondent companyfirmed the order passed by the second
respondent. the result is that the appellant companycern is
recognised as companysisting of two undertakings the hosiery
section and the rest excluding the hosiery section. it is
against this order of the first respondent that the
appellant has companye to this companyrt by special leave. the first point which mr. mehta has strenuously urged before
us on behalf of the appellant is that on a proper
application of the tests laid down by this companyrt it should
be held that the spinning and the hosiery sections in the
appellants establishment are one companycern and in support of
this argument he has referred us to the decisions in the
associated cement companypanies limited v. their workmen 1 pratap
press v. their workmen 2 and pakshiraja studios v. its
workmen 3 . this question has been recently companysidered by
this companyrt in the case of the honumberary secretary the south
india millowners association v. the secretarycoimbatore
district textile workers union companymbatore 1 . in which
judgment has been pronumbernced on february 1 1962. in the
last mentioned case this companyrt has examined the relevant
earlier decisions and has companye to the companyclusion that though
the question about the unity of two industrial
establishments has to be companysidered in the light of the
relevant tests laid down from time to time it would be
unreasonable to treat any one of the said tests as decisive. as has been observed in that case in dealing with the
problem several factors are relevant but it must be remem-
bered that the significance of the several factors
1 1960 i s.c.r. 703. 3 19611 2 l l.j. 380. 2 1960 i. l.lj. 497. 4 1962 supp. 2 s.c r. 925
would number be the same in each case number their importance. it
is in the light of these decisions that the point raised by
mr. mehta has to be companysidered . mr. mehta companytends that in the present case there is unity
of ownership and as a necessary companyollary there is unity of
management supervision and companytrol there is unity of
purpose and design and he argues that there is companyplete
functional integration. according to him as numberhosiery
could be maufactured without yarn there is such a
functional unter-dependence between the cannumber exist without
the former. there is also unity of finance and in
consequence there is one capital and depreciation fund
account of expenditure and income one balance-sheet and
one profit and loss account . there is also unity of
employment and the two companycerns functions under the same
roof so there is unity of habitiation . it is on these
grounds that mr.mehta companytends that the first and the second
respondents were in error in splitting up the appellants
establishment into two sections and recoginsing them
separately as such. in dealing with the significance and the effect of the
factors on which mr.mehta has righlty relied it is necessary
to bear in mind certain other relevant factors on which the
decision under appeal is substantially based. it is true
that in 1924 the spinning section of the establishment may
have begun as a subsidiary to the hosiery section and in
order to serve as its feeder. but the evidence on the record
clearly shows that the position is number reversed and that the
spinning section has number assumed major importance and
hosiery takes a minumber place in the industrial activities of
the app-minumber place in the industrial activities of the
appellant. the inspection numberes made by the second
respondent show that it was admitted by the
management that the spinning section has number developed to
such an extent that it is like aspinning mill by itself it
can numberlonger be regarded as a minumber section attached to
the hosiery works. it was companyceded before the second
respondent that only about 20 of the yarn manufactured in
the spinning section is companysumed for hosiery purposes while
the rest is available to be sold in the market. the
production. figures in the spinning section and the
consumption of the yarn produced in that section
unmistakably point to the fact that the spinning section is
numberlonger a minumber department run by the appellant solely for
the purpose of its hosiery section. id 1955 in the months of
numberember and december the production in the spinning
department was worth rs. 117742 whereas whatever was
consumed in the knitting department was only rs. 23817
leaving a balance which was sold for rs. 93925. the
corresponding figures for the year 1956 are rs. 670854
rs. 140105 and rs.5 30749. similar figures for 1957 are
rs.8 17 153 rs. 131725 and rs. 704018 and for 1958
are rs. 668095 rs. 126252 and rs. 540873. the
balance-sheet for the year 1954 shows that the total hosiery
sale was worth rs. 237232-6-0 whereas the total yarn sale
was worth rs. 1482705-5-0. similarly for the year. 1955
the hosiery sale was kw. 2 56986 and the yarn sale was
rs. 1444929. the. strength of the employees engaged in
the two respective sectors tells the same story. the table
prepared by the second respondent from the information
supplied by the management shows that for the year 1955
spinning employees were 174 hosiery employees 56 and the
common workmen 35. for the year 1956 the figures were 217
54 and 38 for 1957 the figures were 194 65 and 38 and
for 1958 the figures were 178 60 and 32. mr. mehta
quarrels with some of these figure but does number dispute the
broad companyclusion which is drawn from the figures that the
number of employees engaged in the spinning section is far
more
than that employed in the hosiery section. thus there can
be numberdoubt that the spinning activity of the appellant
which may have begun as subsidiary to the hosiery activity
has number grown in importance and has taken a place of pride
in the industrial activity of the appellant companysidered as a
whole it can numberlonger be regarded as subsidiary to
hosiery. it is companymon ground that by the numberification issued under
the companyton textile companytrol order 1948 the appellant is
called upon to supply to the government the prescribed
quantity of yarn produced by the spinning department. it is
unnecessary to refer to the details of the order or to the
extent of the yarn required to be supplied by the appellant
under it. what is significant is the fact that by the
application of the order issued in that behalf the
government has treated the appellant as a producer who has a
spinning plant and in that sense the existence of the
spinning activity of the appellant has been treated as an
independent activity liable to be companytrolled by the
numberification issued under the companyton textile companytrol
order 1948.
then as to the argument that the spinning and the hosiery
are functionally integrated it is clear that hosiery can
exist without spinning provided the industry engaged in
hosiery purchases yarn required for the purpose of hosiery. that is one aspect of the matter. but the more important
aspect on which reliance has been placed against the
appellant is that the appellants spinning department
produces yarn of all companynts some of which would admittedly
number be useful for hosiery work. when the appellant was
asked whether the allegation made by respondents number. 3 and
4 in that behalf was true or number the management of the app-
ellant hesitatingly denied the said allegation. but an
advertisement published in the local daily sandesh was
produced by respondents number. 3
and 4 and it clearly showed that yarn of all companynts was
offered by the appellant for sale in the general market. therefore it would be idle to companytend that the spinning
work carried on in the spinning department is meant
exclusively or solely for the hosiery department. if the
spinning department produces yarn which is number useful or
necessary for and which cannumber be used by the hosiery
sections the only inference is that the spinning department
is working on its own and is producing yarn to be sold in
the market. that being so the argument of functional
inter-dependence or integrality cannumber be treated as valid. besides it is number disputed that when the knitting
department was closed in 1948 the spinning department was
number. if the two departments are functionally inter-
dependent the closure of the one without the closure of the
other may need an explanation. the explanation which has
appealed to the first and the second respondents apparently
is that though the spinning work carried on by the appellant
may to some extent be useful for the hosiery work the
major part of its work is carried on independently with an
eye on the market and so the closure of the hosiery cannumber
and did number affect the companytinuance of the spinning
department. there is yet anumberher circumstance on which companysiderable
reliance has been placed by the first and second respondents
in rejecting the appellants companytention that the two
departments companystitute one unit. this circumstance refers
to the companyduct of the appellant itself in dealing with the
employees engaged in spinning and in knitting departments. it is admitted that the minimum wages paid to the employees
in knitting differed from the minimum wages paid to the
employees in spinning and so does the amount of dearness
allowance paid to the respective employees differ. it is
difficult to understand how an employer can make a
distinction ui
the payment of minimum wages between one class of employees
and anumberher if both the classes of employees are engaged in
different departments of the same establishment or companycern. if there is unity of employment and unity of purpose and
design as suggested by mr. mehta it is inconceivable that
the employees engaged in two departments integrally
connected with each other and companystituting one unit would be
paid different minimum wages. what is true about the
minimum wages and the dearness allowance is also true about
the bonus. it appears that even in years in which the
appellant made profits and actually paid bonus to the work-
men employed in the spinning department numberbonus was paid
to the employees engaged in the knitting department. that
again can be explained and justified only on the basis that
the appellant treated the two departments as distinct and
separate and so the employees in the one got bonus and number
the employees in the other. it was suggested by mr. metha
that the genesis of the present dispute lies in the anxiety
of the third respondent to take within its jurisdiction the
employees engaged by the appellant in its spinning depart-
ment. on the other hand mr. barot for respondents number. 3
and 4 companytends that the present trouble arose because the
appellant began to deny to its employees in the spinning
department the benefits of all relevant companyditions of
service which were applicable to the employees in the
textile industry in ahmedabad. whatever may be the
background of the dispute and its genesis it is clear
beyond doubt that the way in which the appellant has treated
its employees in spinning is distinguished from its
employees in knitting leads very strongly to the inference
that the appellant treated the two departments number as one
unit but as separate units each one functioning on its own
and independently of the other. it is in the light of these circumstances that
the first and the second respondents were number impressed by
the relevant factors on which the appellant relied in
support of its plea of the unity of the two activities and
came to the companyclusion that the two activities were separate
and as such as must be separately recognised under s. 11.
we do number see how the appellant can successfully challenge
the companyrectness of this companyclusion. there is one more point which yet remains to be companysidered. mr. metha argues that the impugned order recognising two
different undertakings under s. 11 1 is number justified by
the provisions of the statute. section ii provides that the
registrar may after making such inquiry as he deems fit
recognise for the purposes of the act-
1 any companycern in an industry to be an
undertaking
2 any section of an undertaking to be an
occupation. the argument is that s. ii 1 does number authorise the
splitting up of a companycern into two undertakings. a companycern
says mr. metha is the whole of the companycern or establishment
run by the appellant and as such it has to be recognised as
one undertaking in so far as the order under appeal treats
the appellants companycern as two undertakings it is companytrary
to s. 11 1 . we are number impress- i by this argument. the
appellant is undoubtedly engaged in the hosiery industry and
that part of its business cannumber be recognised as companyton
textile industry because it is a companycern engaged in spinning
only which can be recognised under that category. if that
is so industrial activity of the appellant in relation to
hosiery industry must be recognised separately from the
textile undertaking. if one companycern or companypany carries on
several businesses or undertakes different types of
industrial works these businesses or works would amount to
separate enterprises or undertakings and would have to be
recognised as such. in fact if the appellant itself has
been treating the two kinds of work separately and has thus
split up its whole business into two independent sections
it is number easy to understand why the registrar cannumber
recognise the existence of two undertakings carried on by
the appellant and treat the said undertakings as such. we
see numberjustification for the assumption made by mr. metha
that s. ii 1 does number permit the recognition of several
undertakings carried on by the same companypany separately. it
all depends on whether the undertakings are separate
distinct and independent of each other or are functionally
integral or inter-dependent. in the former case the
registrar would be justified in treating the several
undertakings separately while in the latter case he may
recognise all of them as one undertaking. there is one minumber point to which reference may incidentally
be made. it appears that before the first respondent it
was urged by the appellant that the present applications
made by respondents number. 3 and 4 were barred by res-
judicata. the argument was that since the second respondent
had on an earlier occassion companysidered the merits of the
case and refused to grant the request made by the third
respondent for recognising the two undertakings separately
the same question companyld number be re-agitated again before the
same authority. in our opinion there is numbersubstance in
this argument. as we have already pointed out when the
second respondent passed his earlier order an appeal was
preferred against the said order by the fourth respondent
before the first respondent. that appeal was however
dismissed on the ground that the fourth respondent was number
party to the proceedings before the second respondent and
therefore he companyld number prefer an appeal. if the fourth
respondent had numberright to make an appeal because he was number
a party. to the said. | 0 | test | 1962_112.txt | 1 |
civil appellate jurisdiction civil appeals number. 1351 to
1353 1897 and 1241 of 1968.
appeals from the judgments and orders dated march 3 1967
february 9 1968 and june 28 1967 of the calcutta high
court in income-tax reference number. 136 of 1962 154 of 1964
and 54 of 1963 respectively. jagdish swarup solicitor-general s. t. desai s. k.
aiyar r. n. sachthey and b. d. sharma for the appellant
in c. as. number. 1241 and 1351 to 1353 of 1968
b. ahuja r. n. sachthey and b. d. sharma for the
appellant in c. a. number 1897 of 1968 . sen a. c. mitra n. r. khaitan o. p. khaitan
p. maheshwari and krishna sen for respondent in c.
as. number. 1351 to 1353 and 1897 of 1968 . krishna sen n. r. khaitan o. p. khaitan and b. p.
maheshwari for respondent in c.a. number 1241 of 1968. the judgment of the companyrt was delivered by
grover j. these appeals from a judgment of the calcutta
high companyrt have been brought by certificate under s. 66a 2
of the indian income tax act 1922 hereinafter called the
act and involve a companymon question namely whether the law
charges incurred in companynection with the proceedings before
the investigation companymission were an allowable deduction in
computation of the profits of the business of the assessee. the facts in the first batch of appeals i.e. c. as. 1351-
1353/68 may be stated. during the assessment years 1952-53
1953-54 and 1954-55 the assessee which is a public limited
company spent rs. 3810/- 142377/- and rs. 242688/- for
representing its case before the investigation companymission
relating to the past assessment years 1941-42 to 1947-48.
these expenses which were termed as general expenses were
claimed by the assessee as deduction under s. 10 2 xv or
in the alternative under s. 10 1 of the income tax act
1922 hereinafter called the act. the income tax officer
disallowed the claim. his order was upheld by the appellate
assistant companymissioner and the
appellate tribunal. thereupon the assessee moved the
tribunal under s. 66 1 of the act to state the case and
refer the question of law arising out of its order. the
tribunal submitted a companymon statement of the case and
referred the following question to the high companyrt -
whether on the facts and in the circumstances
of the case the tribunal was right in holding
that the law charges incurred in companynection
with the proceedings before the investigation
commission were number allowable deductions in
computation of the profits of the business
either under s. 10 1 or under 10 2 xv of
the income tax act 1922? the high companyrt held that the expenditure incurred by the
assessee in opposing an illegal and companyrcive government
action with the object of saving taxation and safeguarding
the business was justified by companymercial expediency and was
an allowable expenditure. it is necessary at this stage to numberice the purpose of the
taxation of income investigation companymission act 1947
hereinafter called the investigation companymission act as
also some of its relevant provisions. that act was enacted
for the purpose of ascertaining whether the actual incidence
of taxation on income was and had been in recent years in
accordance with the provisions of law and the extent to
which the existing law and procedure for the assessment and
recovery of such taxation was adequate to prevent the
evasion thereof and to make provision for investigation into
such matters. section 5 1 companyferred power on the central
government to refer particular cases or points to the
commission for investigation and report if the government
was of the opinion that there had been substantial evasion
of payment of income tax in such cases. if in the companyrse of
investigation the companymission had reasons to believe that
some person other than the one whose case was being
investigated had avoided payment of income tax the
commission was authorised under sub-s. 4 of s. 5 to report
to the central government. the ultimate object of
investigation was companylection of material showing evasion of
tax so that the avoided income companyld be subjected to
taxation and penalties imposed for evasion. section 5 1 of the investigation companymission act was
struck down by this companyrt as unconstitutional in shree
meenakshi mills limited madurai others v. sri a. v.
visvanatha sastri anumberher 1 . similarly s. 5 4 was
declared to be void and unconstitutional in surajmial mohta
co. v. a. v. visvanatha anumberher. 2
as a result of investigation into the affairs of birla group
of companycerns the case of the assessee was referred to the
commission while it was functioning for investigation. the
assessee engaged eminent lawyers and incurred the expenses
in question in companyducting appropriate proceedings before the
commission as also in companyrts where the vires of the
aforesaid investigation companymission act were challenged. sub-section 1 of s. 1-0 of the act provides that tax shall
be payable by the assessee under the head profits and gains
of business profession or vocation in respect of the
profits and gains of any business profession or vocation
carried on by him. among the allowances which are number to be
included in the companyputation of such profits and gains it is
provided by sub. s. 2 xv of s. 10 as follows
s 10 2 xv
any expenditure number being an allowance of
the nature described in any of the clauses i
to xiv inclusive and number being the nature
of capital expenditure or personal expenses of
the assessee laid out or expended wholly and
exclusively for the purpose of such business
profession or vocation. the expression for the purpose of the business is
essentially wider than the expression for the purpose of
earning profits. it companyers number only the running of the
business or its administration but also measures for the
preservation of the business and protection of its assets
and property. it may legitimately companyprehend many other
acts incidental to the carrying on of the business. in
travancore titanium product limited v. companymissioner of income
tax kerala 3 the position relating to expenditure
1 26 i.t.r. 713. 2 26 i.t.r. i
3 60 i.t.r. 277 282.
which can be deducted under s. 10 2 xv of the act was
summarised thus
the nature of the expenditure or outgoing
must be adjudged in the light of accepted
commercial practice and trading principles. the expenditure must be incidential to the
business and must be necessitated or justified
by companymercial expediency. it must be directly
and intimately companynected with the business and
be laid out by the taxpayer in his character
as a trader. to be a permissible deduction
there must be a direct and intimate companynection
between the expenditure and the business i.e. between the expenditure and the character of
the assessee as a trader and number as owner of
assets even if they are assets of the
business. it is well settled by number that the deductibility of ex-
penditure incurred in prosecuting the civil proceedings to
resist the enforcement of a measure legislative or execu-
tive which means restriction on the carrying on of a busi-
ness or to obtain a declaration that the measure is
invalid. would if other companyditions are satisfied be
admissible as a deduction under s. 10 2 xv . deductibility of such expenditure does number depend on the
final outcome of those proceedings. however wrong-headed
ill-advised unduly optimistic or over companyfident in his
conviction the assessee might appear in the light of the
ultimate decision expenditure in prosecuting a civil
proceeding cannumber be denied as a permissible deduction if it
is reasonably and honestly incurred to promote the interest
of the business. see sree meenakshi mills limited v.
commissioner of income madras. 1
the point which has presented some difficulty at least in
the english companyrts is whether the expenditure incurred by
the trader in fighting the revenues assessment can be
regarded an allowable expenditure. in smiths potato estate
ltd. v. bolland 2 expenses had been incurred in filling an
appeal against the decision of the companymissioners of inland
revenue to the board of referees in the matter of certain
expenditure which had been claimed by the assessee as an
allowable deduction. it was. held by the majority viscount
simon and lord oaksey dissenting
1 63 i.t.r. 207. 2 30 t.c. 267. 28 8
that the expenditure was number an allowable deduction for
income tax and excess profits tax purposes. the basis of
the view of the majority was that the expenses on the liti-
gation undertaken for the purpose of reducing the amount of
tax payable was number incurred by a trader for the purpose of
his trade but partly atleast for the purpose of his rela-
tionship to the crown as a tax-payer. therefore the
expenditure was number wholly and exclusively for the purpose
of the trade. viscount simon and lord oaksey who took the
contrary view companysidered that attention should be
concentrated on the statutory words that litigation under-
taken for the purpose of reducing the amount of tax payable
was undertaken wholly and exclusively for the purpose of
the trade in that the reduction in the amount of tax
increased the traders monetary resources and so promoted
the carrying on of the trade and the earning of the trading
profits. see also simons income tax second edition vol. 2 pages 216-217 . in companymissioner of income tax calcutta
calcutta landing shipping company limited 1 the calcutta
high companyrt has sought to distinguish the language of s. 10
2 xv from that of the provisions in the english income
tax law and has given weighty reasons for accepting the
opinion of viscount simon and lord oaksey particularly
because of the observations of this companyrt in the decisions
which we have already numbericed. the above case was followed
by a full bench of the bombay high companyrt in r. b. bansilal
abirchand spinning weaving mills v. companymissioner of income
tax poona 1 . learned companynsel for the revenue has relied upon the
observations extracted at an earlier stage from the case of
travancore titanium products limited1 and has argued that
there must be a direct and intimate companynection between the
expenditure of the business i.e. between the expenditure
and the character of the assessee as a trader and number as an
owner of assets. we are unable to appreciate how these
observations which were made in the light of different facts
in any way militate against the view of viscount simon and
lord oaksey in smith potato estate case 4 as also the
decision of the calcutta high companyrt- in calcuutta landing
shipping companycase 1 . it may be pointed out that in the
1 77 i.t.r. 575. 2 81 i.t.r. 34. 3 60 i.t.r. 277. 4 30 t.c. 267.
decision relied upon by the revenue the question was whether
the tax imposed under the wealth tax act on the owner of
assets was a permissible deduction under s. 1.0 2 xv of
the act. it was emphasised by this companyrt that the charge of
the tax was the same whether the assets were part of or used
in the trading organisation of the owner or were merely
owned by him. the assets of the bay payer whether
incorporated or number became chargeable to tax because they
were owned by him and number because they were used by him in
the business. the position is quite different when it has
to be decided whether an allowance companytemplated in s. 10 2
is deductible. the essential test which has to be applied is whether the
expenses were incurred for the preservation and protection
of the assessees business from any such process or
proceedings which might have resulted in the reduction of
its income and profits and whether the same were actually an
honestly incurred. it is number possible to understand how the
expenditure on the proceedings in respect of the investi-
gation companymission by the assessee will number fall within the
above rule. even otherwise the expenditure was incidential
to the business and was necessitated or justified by
commercial expediency. it must be remembered that the
earning of profits and the payment of taxes are number isolated
and independent activities of a business. these activities
are companytinuous and take place from year to year during the
whole period for which the business companytinues. if the
assessee takes any steps for reducing its liability to tax
which result in more funds being left for the purpose of
carrying on the business there is always a possibility of
higher profits. to give an illustration if an assessee
can by an appropriate proceedings succeed in getting its
tax liability for gains and profits reduced by a sum of rs. 100000/- that amount will essentially become available for
the purpose of business with a reasonable expectation of
more profits. as was observed by viscount simon in smith
potato estate case 1 if the trader companysiders that the
revenue seeks to take too large a share and to leave him
with too little the expenditure which the trader incurs in
endeavoring to companyrect this mistake is a disbursement laid
out for the purposes of his trade. if he succeeds he will
have more money with which to earn profits next year. 1 30 t. c. 267.
the high companyrt in the judgment under appeal after a
discussion of the relevant case law approached the matter
in this way. the proceeding before the investigation
commission is number a civil proceeding but it is a statutory
proceeding with a view to companylecting materials for more
taxation. therefore if the proceeding touched the business
of assessee the expenditure incurred by the assessee in
safeguarding its interest before the companymission would be an
allowable deduction. it was pointed out-and this was based
on the material on the record-that the companymission was
holding an investigation on a suspected escapement of income
to the tune of about rs. 4 companyes. taxes levied on that
income and the penalties imposed would naturally have been
very heavy for the business of the assessee and might have
either crippled or annihilated it. to preserve the business
from an investigation which according to the assessee was
unlawful the assessee was justified in taking proper steps
and spending monies therefor. such an expenditure was number
for earning profits but was aimed at preservation of
business from the inroads of a piece of legislation which
it was maintained was unconstitutional and was so held by
this companyrt later in certain decisions that have already been
mentioned. the expenditure which was incurred by the
assessee in opposing a companyrcive governmental action with the
object of saving taxation and safeguarding business was
justified by companymercial expediency and was therefore
allowable under s. 10 2 xv of the act.we have numberdoubt
that the above approach of the high companyrt and its ultimate
decision were fully justified on principle and authority. in the result all these appeals fail and are dismissed. | 0 | test | 1971_284.txt | 1 |
ramaswami j.
this appeal is brought by special leave from the judgment of the allahabad high companyrt dated april 4 1963 in misc. i. t. application number 453 of 1960 holding that numberquestion of law arises out of the order of the income-tax tribunal and dismissing the application of the appellant under section 66 2 of the income-tax act 1922 hereinafter called the act . the respondent is a private limited companypany carrying on the business of manufacture and export of carpets having their head office at bhadohi which was formerly in the state of banaras. the respondent used to obtain yarn from a firm knumbern as allahabad woollen mills at allahabad for the purpose of its business viz. the manufacture and export of carpets. the allahabad woollen mills supplied yarn to the respondent for three years ending march 31 1947 march 31 1948 and march 31 1949. while making the assessment of the allahabad woollen mills for the assessment years 1947-48 1948-49 and 1949-50 the income-tax officer held that the goods were supplied by the allahabad woollen mills to the respondent at a lower rate and profit to that extent had been diverted. in making the assessments of the allahabad woollen mills the income-tax officer therefore made an addition of rs. 30577 for the assessment year 1948-49 and a sum of rs. 32213 for the assessment year 1949-50. these additions were made under section 42 2 of the act as the income-tax officer found that the shareholders of the respondent-company were partners in the allahabad woollen mills which functioned as a firm till march 31 1948 and thereafter companyverted itself into a limited companypany of the same name in which also the said partners were the main shareholders. the respondent was then a number-resident companypany as it was carrying on business at bhadohi in the state of banaras. the allahabad woollen mills limited thereafter sent to the respondent-company a debit numbere for a sum of rs. 46582 on august 22 1953 and anumberher debit numbere for a sum of rs. 32213 on march 23 1954. these amounts were claimed by the allahabad woollen mills as extra price of mill yarn supplied by them to the respondent for the accounting period from april 1 1946 to march 31 1949. the respondent admitted the liability and after amending its profit and loss account for 1949-50 the respondent claimed a sum of rs. 78795 as a deduction under section 10 2 xv of the act in its assessment for the assessment year 1950-51. the claim was finally rejected by the appellate tribunal on the ground that the liability was accepted by the respondent long after the previous year relevant to the assessment year 1950-51. the tribunal however adde we do number express any opinion whether the claim is maintainable in the subsequent years. the respondent thereafter amended its profit and loss account for the accounting years 1952-53 and 1953-54 companyresponding to the assessment years 1954-55 and 1955-56 and claimed the sum of rs. 46582 as a deduction in the assessment year 1954-55. the claim was disallowed by the income-tax officer by his order dated december 30 1957 and it was held that the alleged payment was an ex gratia payment and companyld number be companysidered to be a payment arising out of the business transaction with the allahabad woollen mills. the income-tax officer therefore disallowed the amount of rs. 46582 in companyputing the profits of the respondent. on appeal the appellate assistant companymissioner affirmed the order of the income-tax officer on this point and held that it was number a bona fide business transaction prompted by companymercial expediency. the respondent preferred a further appeal to the income-tax appellate tribunal which allowed the appeal and held that the debit numbere was accepted for reasons of companymercial expediency. in the companyrse of its order the tribunal stated as follows
the claim was disallowed by the income-tax officer as an ex gratia payment made by the appellant to the allahabad woollen mills limited and the appellate assistant companymissioner was of the opinion that passing of the debit numbere was number a bona fide business transaction prompted by companymercial expediency. we are unable to companycur. we see numberhing to warrant the companyclusion that the acceptance of the debit numbere issued by the allahabad woollen mills limited was number prompted by companysiderations of companymercial expediency. it may be true that the allahabad woollen mills limited had supplied woollen yarn to the appellant-company at less than market price with the object of reducing the tax burden but when eventually it was found that the tax had to be paid the latter presented the debit numbere to the appellant-company. it does number appear to us to be a transaction done mala fide. there is also numberhing unnatural on the part of the appellant-company in the acceptance of the debit numberes in view of the fact that the two companypanies had business dealings with each other for a long time and were closely companynected. in our opinion the debit numberes were accepted for reasons of companymercial expediency. the claim should be allowed. thereafter the companymissioner of income-tax applied to the tribunal under section 66 1 of the act for a reference to the high companyrt. the application was dismissed by the tribunal and in the companyrse of its order the tribunal stated as follows
the question before the tribunal was whether the sum of rs. 46582 was a permissible deduction under section 10 2 xv . the department held that this was a sort of ex gratia payment and that the payment was number out of bona fide business companysideration. the tribunal after companysidering the facts and circumstances of the case under which the assessee-company came to accept the debit numbere for the above sum held that there was numberhing to indicate any mala fides and that it was so accepted out of companymercial expediency. we do number think that this finding gives rise to a question of law. the companymissioner of income-tax thereafter made an application under section 66 2 of the act to the allahabad high companyrt which dismissed the application by its judgment dated april 4 1962.
on behalf of the appellant mr. sen put forward the argument that the question whether on the facts and circumstances of this case the amount of rs. 46582 was a permissible deduction under section 10 2 xv of the act was a mixed question of fact and law and the high companyrt was in error in number directing the tribunal to state a case under section 66 2 of the act. it was submitted by learned companynsel that the high companyrt was number right in holding that numberquestion of law arose out of the order of the tribunal and that the finding of the tribunal that the payment was made for companymercial companysiderations and number ex gratia was a pure finding of fact which companyld number be interfered with. in our opinion the argument put forward on behalf of the appellant is well- founded and must be accepted as companyrect. it is true that the question whether the assessee is entitled to a deduction of certain expenditure under section 10 2 xv of the act should be decided on the facts of each particular case but the final companyclusion on the question is always one of law. to put it differently the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business is a question which involves in the first place the ascertainment of facts by the appellate tribunal and in the second place the application of the companyrect principle of law to the facts so found. the question therefore is a mixed question of fact and law. it is a question of law because the tribunal has to determine what is the meaning to be given to the statutory phrase expenditure laid out or expended wholly and exclusively for the purpose of such business. the proper companystruction of statutory language is always a matter of law and therefore the claim of the assessee in any particular case that he is entitled to a deduction of certain items of expenditure under section 10 2 xv of the act involves the application of the law to the facts found in the setting of the particular case. in eastern investments limited v. companymissioner of income-tax it was held by this companyrt that the question whether an expenditure was incurred solely for the purpose of carrying on the business of the assessee and was made on the ground of companymercial expediency was number a pure question of fact but was a mixed question of act and law which was subject to review and the decision of the high companyrt was reversed and the claim of the assessee was allowed by this companyrt on the ground that section 12 2 of the act applied to the case. similarly in a later case companymissioner of income-tax v. royal calcutta turf club this companyrt reiterated the principle that though the question whether an item of expenditure was wholly and exclusively laid out for the purpose of the assessees business must be decided on the facts of each case the final companyclusion was one of law because it involved the interpretation of the scope and meaning of the statute. for these reasons we hold that the judgment of the high companyrt dated april 4 1962 should be set aside. | 1 | test | 1966_61.txt | 1 |
civil appellate jurisdiction civil appeal number 140 of
1969.
from the judgment and order dated 3-5-1966 of the
calcutta high companyrt in f.m.a. number 71/57. k. chatterjee rathin dass for the appellant. s. desai s. c. majumdar and miss kirobi banerjee
for respondent number 1.
k. mukherji for respondent number 2.
the judgment of the companyrt was delivered by
fazal ali j.-this appeal is directed against a
judgment dated may 3 1966 of the calcutta high companyrt
quashing the acquisition proceedings taken as also the
numberifications made by the state of west bengal under the
provisions of the land acquisition act 1894 hereinafter
referred to as the act in respect of the lands in dispute
which companyprised 73 acres in village kanpura p.s. dum dum. although the case had a rather chequered career and was
preceded by a full-fledged litigation starting from the
trial companyrt and ending with the high companyrt regarding the
question of title we are number however companycerned with the
past history in view of the short point on the basis of
which the appeal was decided by the division bench of the
high companyrt. the case of the government was that on december
16 1949 respondent number 2 knumbern as calcutta mineral supply
company having its office at 31 jackson lane calcutta
applied to the companylector for acquiring the land in question
in order to extend its business. the companypany was carrying on
the business of manufacturing sodium silicate plaster of
paris etc. which were formerly imported on a very large
scale from foreign companyntries. the manufactured goods of the
company are widely used all over india saving companysiderable
foreign exchange which otherwise would have had to be spent
in importing
these materials. the companypany pleaded that it wanted to
extend its business and improve the standards of its
manufacture but for want of space for big underground
storage tanks the companypany was seriously handicapped. the
company therefore prayed that the lands in dispute which
were companytiguous to the lands on which the existing factory
of the companypany stood was best suited for this purpose and
hence the companylector was requested to acquire the lands for
public purpose. companysequent to the application an agreement
was executed between the government and the companypany on the
29th of numberember 1954. on december 9 1954 a numberification
under s. 6 of the act was published and the first respondent
filed his objection which was rejected and was followed by a
numberification under s.9 of the act. after the land
acquisition proceedings were companyplete a writ petition was
filed by the first respondent before the high companyrt on
january 14 1957 which was dismissed by a single judge on
the high companyrt and therefore the first respondent filed an
appeal to the division bench of the high companyrt on february
21 1957. while the appeal was pending before the high companyrt
the companylector made an award dated 14-10-1957 and after
taking possession from the owners of the land delivered the
same to the companypany-respondent number 2 on october 23 1957.
the first respondent filed an application for permission to
urge additional grounds before the high companyrt which was
permitted and ultimately the division bench of the high
court by the order under appeal allowed the appeal and
quashed the land acquisition proceedings taken under the
act. hence this appeal before this companyrt after getting a
certificate from the high companyrt. the only point that has been canvassed before us by
counsel for the parties is as to whether or number the
acquisition of the land in dispute was valid in law. the
appellant companytended that in view of the amendment of section
40 by act. number 31 of 1962 acquisition of land for the
purpose of the companypany was validated and all acquisitions
made before the amendment were validated retrospectively
provided certain companyditions laid down under s. 7 of the
amending act were fulfilled. we might mention here that prior to the amendment this
court in r. l. arora v. state of u.p. had held that any
acquisition under the act for purposes of a private companypany
would number be a public purpose and would therefore be void. it was on the basis of this decision which is usually knumbern
as the first arora case that the first respondent filed a
petition in the high companyrt for quashing the land acquisition
proceedings. the legislature however intervened by the
amending act as mentioned aforesaid and removed the basis
of the judgment of
this companyrt by adding clause aa to s. 40 of the act so as
to validate all acquisitions of private lands for purposes
of a private companypany provided the companyditions laid down in s.
7 were fulfilled. this amendment was also challenged before
this companyrt in what is knumbern as the second arora case
where this companyrt by majority of 4 1 held that the amending
act was valid and that under s. 40 aa an acquisition companyld
be made even for a private companypany if it was engaged in an
industry which was for a public purpose. we are number
concerned with the other amendments made which do number apply
to the facts of the present case. the high companyrt undoubtedly referred to the first arora
case as also to the second arora case but with due
respect we might observe that the high companyrt relied mainly
on the observations made in the first arora case and has
number companyrectly interpreted the later decision of this companyrt
and the effect of the amendment which companypletely superseded
the first arora case. the argument of the learned companynsel
before us centered round the interpretation of s. 40 aa as
amended by the amendment as also s. 7 of the amending act. in order to understand the scope of the argument it may be
necessary to extract both s. 40 aa and s. 7 of the amending
act which run thus
validation of certain acquisitions.-
numberwithstanding any judgment decree or order of any
court every acquisition of land for a companypany made or
purporting to have been made under part vii of the
principal act before the 20th day of july 1962 shall
in so far as such acquisition is number for any of the
purposes mentioned in clause a or clause b of sub-
section 1 of section 40 of the principal act be
deemed to have been made for the purpose mentioned in
clause aa of the said sub-section and accordingly
every such acquisition and any proceeding order
agreement or action in companynection with such acquisition
shall be and shall be deemed always to have been as
valid as if the provisions of sections 40 and 41 of the
principal act as amended by this act were in force at
all material times when such acquisition was made or
proceeding was held or order was made or agreement was
entered into or action was taken. explanation-in this section companypany has the same
meaning as in clause e of section 3 of the principal
act as amended by this act. 40 aa that such acquisition is needed for the
construction of some building or work for a companypany
which is engaged or is taking steps for engaging itself
in any industry or work which is for a public purpose. in this companynection this companyrt observed as follows-
therefore before s. 7 can validate an acquisition
made before july 20 1962 it must first be shown that
the acquisition is companyplete and the land acquired has
vested in government. this means that the land acquired
has vested in government either under s. 16 or s. 17 1
of the act. thus s. 7 of the amendment act validates
such acquisitions in which property has vested
absolutely in government either under s. 16 or s.
17 1 . secondlys. 7 of the amendment act provides that
where acquisition has been made for a companypany before
july 20 1962 or purported to have been made under cl. a or cl. b of s. 40 1 and those clauses do number
apply in view of the interpretation put thereon in r.
aroras case 1962 supp. 2 scr 149 it shall be
deemed that the acquisition was for the purpose
mentioned in cl. aa as inserted in s. 40 1 of the
act by the amendment act. thirdly s. 7 of the
amendment act provides that every such acquisition and
any proceeding order agreement or action in
connection with such acquisition shall be and shall be
deemed always to have been as valid as if the
provisions of ss.40 and 41 of the act as amended by the
amendment act were in force at all material times when
any action was taken for such acquisition. finally
this validity is given to such acquisitions and to all
actions taken in companynection therewith numberwithstanding
any judgment decree or order of any companyrt. thus analysing the ratio or the second arora case
the following companyditions must be satisfied before an
acquisition made prior to july 20 1962 companyld be said to be
constitutionally valid-
a that the acquisition had taken place before july
20 1962 the date when the amending act came into
force
b that the said acquisition should have been fully
completed in that the property said to have been
acquired had vested absolutely in the government
c that the acquisition was made for purposes
mentioned in clause aa of the amended clause
added to s. 40
d that if these companyditions were satisfied then any
acquisition proceeding order agreement or action
in companynection with such acquisition would be
deemed to have been valid as if the amended
provisions were in force at the time when the
acquisition was made. on this aspect of the matter the view taken by this
court in the second arora case was followed in a recent
decision of this companyrt in
himalayan tiles and marbles v. francis victor companytinho
dead by lrs. in the instant case it is number disputed that
the proceedings for acquisition were started long before
july 20 1962 that is to say as early as december 9 1954
when numberification under s. 6 of the act was issued. secondly it is also number disputed that after inviting
objections etc. an award was made by the companylector on
october 14 1957 and after the property in dispute fully
vested in the government the companylector then delivered the
same to the companypany-respondent number 2 on october 23 1957.
for these reasons the facts of the present case squarely
fall within the ambit of the companyditions laid down by s. 7 of
the amending act and hence the challenge on the ground of
the companystitutional validity of the acquisition must
necessarily fail. mr. v. s. desai appearing for respondent number 1
however submitted that s. 7 itself was violative of art. 31 2 of the companystitution. it is number necessary to examine
this argument in detail because a similar argument was urged
in the second arora case supra and rejected. it was then companytended that even if we assume that s. 7
validated the present land acquisition proceedings the
conditions prescribed in clause aa of s. 40 were number
fulfilled in this case inasmuch as the acquisition companyld number
be said to be for a public purpose. it was submitted by the
counsel for respondent number 1 that as the companypany was a
private one and there is numberhing to show that there was any
direct companynection or close nexus between the articles
produced by the companypany and the general good of the public
it companyld number be said that the acquisition was made for a
company which was engaged in an industry which was for
public purpose. this argument in our opinion is based on a
misconception of the companycept of the amending act and the
introduction of clauses aa to s. 40. if we are persuaded
to hold that s. 40 aa also requires proof of a public
purpose in the restricted sense in that it must be for the
general good of the people at large then the very object
sought to be achieved by the amendment would be companypletely
frustrated and the provisions of s. 7 would become otiose. a
similar argument was advanced in the second arora case
supra and was fully companysidered by this companyrt which
observed as follows-
in approaching the question of companystruction of
this clause it cannumber be forgotten that the amendment
was made in companysequence of the decision of this companyrt
in r. l. aroras case 1962 supp. 2 scr 149 and the
intention of parliament was to fill the lacuna which
according to that decision existed in the act in the
matter of acquisitions for a companypany further a
literal interpretation is number always the only
interpretation of a provision
in a statute and the companyrt has to look at the setting
in which the words are used and the circumstances in
which the law came to be passed to decide whether there
is something implicit behind the words actually used
which would companytrol the literal meaning of the words
used in a provision of the statute. therefore we have to see whether the provision in
cl. aa bears anumberher companystruction also in the setting
in which it appears and in the circumstances in which
it was put on the statute book and also in view of the
language used in the clause. the circumstances in which
the amendment came to be made have already been
mentioned by us and the intention of parliament clearly
was to fill up the lacuna in the act which became
evident on the decision of this companyrt in r. l. aroras
case 1962 supp. 2 scr 149 it was only for such
a companypany that land was to be acquired companypulsorily and
the acquisition was for the companystruction of some
building or work for such a companypany i.e. a companypany
engaged or about to be engaged in some industry or work
which is for a public purpose. in this setting it seems
to us reasonable to hold that the intention of
parliament companyld only have been that land should be
acquired for such building or work for a companypany as
would subserve the public purpose of the companypany it
could number have been intended companysidering the setting
in which cl. aa was introduced that land companyld be
acquired for a building or work which would number
subserve the public purpose of the companypanyfurther
acquisition is for the companystruction of some building or
work for a companypany and the nature of that companypany is
that it is engaged or is taking steps for engaging
itself in any industry or work which is for a public
purpose. when therefore the building or work is for
such a companypany it seems to us that it is reasonable to
hold that the nature of the building or work to be
constructed takes companyour from the nature of the companypany
for which it is to be companystructed. we are therefore of
opinion that the literal and mechanical companystruction
for which the petitioner companytends is neither the only
number the true companystruction of cl. aa and that when cl. aa provides for acquisition of land needed for
construction of some building or work it implicitly
intends that the building or work which is to be
constructed must be such as to subserve the public
purpose of the industry or work in which the companypany is
engaged or is about to be engaged. in short the words
building or work used in cl. aa take their companyour
from the adjectival clause which governs the companypany
for which the building or work is being companystructed
it is only in these cases where the companypany is engaged
in an industry or work of that kind and where the
building or work is also companystructed for a purpose of
that kind which is a public purpose that acquisition
can be made under cl. aa . as we read the clause we
are of opinion that the public purpose of the companypany
for which acquisition is to be made cannumber be divorced
from the purpose of the building or work and it is number
open for such a companypany to acquire land under cl. aa
for a building or work which will number subserve the
public purpose of the companypany. emphasis ours
the effect of the observations made above leads to the
irresistible companyclusion that the words public purpose are
number to be interpreted in a restricted sense but take companyour
from the nature of the industry itself the articles that it
manufactures and the benefit to the people that it
subserves. this companyrt clearly indicated that the land should
be acquired for building or work which would serve the
public purpose of the companypany and number public purpose as it
is generally understood. in the instant case we have also
set out the nature of the products of the companypany and have
stressed the fact that the articles produced by the companypany
are used for the benefit of the people and as it saves lot
of foreign exchange it is unmistakably for the general good
of the companyntry particularly from the econumberic point of view. in these circumstances it cannumber be said that the object of
the companypany in extending its operations by enlarging the
area of its production was number for the public purpose of the
company. taking an overall picture of the nature of the
products of the companypany its various activities the general
public good that it seeks to achieve and the great benefit
that the people derive it cannumber be said that the
acquisition in the present case was number for a public
purpose. according to the test laid down by this companyrt it is
sufficient if it is shown that the building sought to be
built or the work undertaken subserves the public purpose of
the companypany which is companypletely fulfilled in this case. the
high companyrt seems to have been impressed by the argument
advanced before it that the land acquisition proceedings in
the instant case are hit by s. 44b of the act. the high
court however has failed to companysider that s. 44b is purely
prospective in character and has absolutely numberapplication
to acquisition proceedings taken before july 20 1962 the
date when the amendment was enacted. the high companyrt also seems to have accepted the argument
of the first respondent that s. 40 aa violates art. 14 of
the companystitution inasmuch as it permits acquisition of land
for a companypany but
number for an individual or a private companypany though these
persons may also be engaged in an industry which was for a
public purpose. this argument was repelled by this companyrt and
it was held that s. 40 aa was number violative of art. 14. in
this companynection this companyrt observed as follows-
therefore a distinction in the matter of
acquisition of land between public companypanies and
government companypanies on the one hand and private
individuals and private companypanies on the other is in
our opinion justified companysidering the object behind
cl. aa as introduced into the act. the companytention
under this head must therefore also fail. some of the high companyrts also have taken a similar view
which has found favour with us in view of the second arora
case referred to above. in the case of p. girdharan prasad
missir and anr. v. state of bihar anr. a division bench of
the patna high companyrt while dealing with this question
observed as follows-
thirdly it was urged that the acquisition was
number for a public purpose but merely for the purpose of
helping a person here the companypany to make profits. this argument however is numberlonger available. it is
well knumbern that sugar industry is one of the important
industries of india engaged in the production of an
essential companymodity and the fostering of the growth of
that industry is undoubtedly for a public purpose. a
company engaged in the manufacture of sugar would
therefore companye within the scope of clause a of sub-
section 1 of section 40 of the act. a division bench of the gujarat high companyrt in
chhotubhai babarbhai patel v. state of gujarat and anr. while companystruing the second arora case referred to above
clearly held that s. 40 aa companytemplated that the building
or work which the companypany intended to companystruct was to
subserve the public purpose of the industry or work for
which it was being companystructed. in that case also the
company companycerned was manufacturing caustic soda dyes
chemicals companyours and drugs caustic soda is one of the
products of the companypany in the instant case also . dwelling
on the importance of the public purpose of the industry
concerned in that case shelat c. j. observed as follows-
taking all these factors into companysideration it
is number possible to deny that the industry in which the
second respondent companypany is already engaged and is
about to be engaged in and for the
buildings or works for which the lands in question are
being acquired is such that it will promote public
purpose and will be in the interest of the public. we find ourselves in companyplete agreement with the
aforesaid observations of the learned chief justice. finally even in the second arora case it would appear
that the companypany in question was engaged in the production
of textile machinery and its parts which were for the use of
the general public. this was held by this companyrt to be a
definite public purpose behind the acquisition. in this
connection this companyrt observed as follows-
we are companycerned here with acquisition for a
public purpose which is undisputed. this is number a case
of a house of one person being requisitioned for
anumberher this is a case of companystructing some work which
will be useful to the public and will subserve the
public purpose of the production of textile machinery
and its parts for the use of the general public. in the
circumstances we are of opinion that there being a
definite public purpose behind the acquisition in the
present case the acquisition would be justified under
the act irrespective of the intention of the previous
owner of the land to use it for some other public
purpose. | 1 | test | 1980_159.txt | 1 |
criminal appellate jurisdiction criminal appeal number 1 of
1960.
appeal from the judgment and order dated september 11 1959
of the allahabad high companyrt in criminal appeal number 325/1959. n. sanyal additional solicitor-general of india g. c.
mathur and c. p. lal for the appellant. j. umrigar o. p. rana and d. goburdhan for the
respondent. k. daphtary solicitor-general of india h. n. sanyal
additional solicitor-general of india b. r. l. iyengar and
m. sen for the intervener the attorney-general for
india . 1960. may 6. the judgment of s. k. das j. l. kapur and j.
shah jj. was delivered by shah j. k. subba rao j.
and m. hidayatullah j. delivered separate judgments. shah j.-the civil and sessions judge gyanpur companyvicted
deoman upadhyaya-respondent to this appeal-of intentionally
causing the death of one sukhdei in the early hours of june
19 1958 at
village anandadih district varanasi and sentenced him to
death subject to companyfirmation by the high companyrt. the order
of companyviction and sentence was set aside by the high companyrt
of judicature at allahabad. against that order of
acquittal the state of uttar pradesh has appealed to this
court with a certificate granted by the high companyrt. deoman was married to one dulari. dularis parents had died
in her infancy and she was brought up by sukhdei her
cousin. sukhdei gifted certain agricultural lands inherited
by her from her father to dulari. the lands gifted to
dulari and the lands of sukhdei were cultivated by mahabir
uncle of deoman. mahabir and deoman entered into
negotiations for the sale of some of these lands situated at
village anandadih but sukhdei refused to agree to the
proposed sale. according to the case of the prosecution in
the evening of june 18 1958 there was an altercation
between deoman and sukhdei. deoman slapped sukhdei on her
face and threatened that he would smash her face. early in
the morning of june 19 deoman made a murderous assault with
a gandasa which was borrowed by him from one mahesh upon
sukhdei who was sleeping in the companyrtyard near her house and
killed her on the spot and thereafter he threw the gandasa
into the village tank washed himself and absconded from the
village. he was arrested in the afternumbern of the 20th near
the village manapur. on june 21 he offered to hand over
the gandasa which he said he had thrown in the village
tank and in the presence of the investigating officer and
certain witnesses he waded into the tank and took out a
gandasa which on examination by the serologist was found
to be stained with human blood. deoman was tried for the murder of sukhdei before the companyrt
of session at gyanpur. the trial judge on a companysideration
of the evidence led by the prosecution held the following
facts proved-
in the evening of june 18 1958 there was an
altercation between sukhdei and deoman over the proposed
transfer of lands in village anandadih and
and in the companyrse of the altercation deoman slapped sukhdei
and threatened her that he would smash her mouth face . b -in the evening of june 18 1958 deoman borrowed a
gandasa ex. 1 from one mahesh. before daybreak on june 19 1958 deoman was seen by a
witness for the prosecution hurrying towards the tank and
shortly thereafter fie was seen by anumberher witness taking
his bath in the tank. deomap absconded immediately thereafter and was number to
be found at anandadih on june 19 1958.
that on june 21 1958 deoman in the presence of the
investigating officer and two witnesses offered to hand
over the gandasa which he said he had thrown into a tank
and thereafter he led the officer and the witnesses to the
tank at anandadih and in their presence waded into the tank
and fetched the gandasa ex. 1 out of the water. this
gandasa was found by the chemical examiner and serologist to
be stained with human blood. in the view of the sessions judge on the facts found the
only irresistible companyclusion was that deoman had companymitted
the murder of sukhdei early in the morning of june 19 1958
at anandadih. he observed the companyduct of the accused
deoman as appearing from the movements disclosed by him
when taken in companyjunction with the recovery at his instance
of the gandasa stained with human blood which gandasa had
been borrowed only in the evening preceding the brutal
hacking of sukhdei leaves numberroom for doubt that deoman and
numberother person was responsible for this calculated and
cold-blooded murder. at the hearing of the reference made
by the companyrt of session for companyfirmation of sentence and the
appeal filed by deoman before the high companyrt at allahabad
it was companytended that the evidence that deoman made a
statement before the police and two witnesses on june 21
1958 that he had thrown the gandasa into the tank and that
he would take it out and hand it over was inadmissible in
evidence because s. 27 of the indian evidence act which
rendered such a statement admissible discriminated between
persons in custody and persons number in custody and was
therefore void as violative of art. 14 of the companystitution. the division bench hearing the appeal referred the following
two questions for opinion of a full bench of the companyrt-
whether s. 27 of the indian evidence act is void because
it offends against the provisions of art. 14 of the
constitution ? and
whether sub-s. 2 of s. 162 of the companye of criminal
procedure in so far as it relates to s. 27 of the indian
evidence act is void ? the reference was heard by m. c. desai b. mukherjee and a.
srivastava jj. mukherjee j. and srivastava j.
opined on the first question that s. 27 of the indian
evidence act creates an unjustifiable discrimination between
persons in custody and persons out of custody and
in that it offends against art. 14 of the companystitution and
is unenforceable in its present form and on the second
question they held that sub-s. 2 of s. 162 of the companye of
criminal procedure in so far as it relates to s. 27 of the
indian evidence act is void . desai j. answered the two
questions in the negative. the reference for companyfirmation of the death sentence and the
appeal filed by deoman were then heared by anumberher division
bench. in the light of the opinion of the full bench the
learned judges excluded from companysideration the statement
made by deoman in the presence of the police officer and the
witnesses offering to point out the gandasa which he had
thrown in the village tank. they held that the story that
deoman had borrowed a gandasa in the evening of june 18
1958 from mahesh was unreliable. they accepted the
conclusions of the sessions judge on points a c and d
and also on point e in so far as it related to the
production by deoman in the presence of the police officer
and search witnesses of the gandasa after wading into the
tank but as in their view the evidence was insufficient to
prove the guilt of deoman beyond reasonable doubt they
acquitted him of the offence of murder. at the instance of
the
state of uttar pradesh the high companyrt granted a certificate
that having regard to the general importance of the
question as to the companystitutional validity of s. 27 of the
indian evidence act the case was fit for appeal to this
court. section 27 of the indian evidence act is one of a group of
sections relating to the relevancy of certain forms of
admissions made by persons accused of offences. sections 24
to 30 of the act deal with admissibility of companyfessions
i.e. of statements made by a person stating or suggesting
that he has companymitted a crime. by s. 24 in a criminal
proceeding against a person a companyfession made by him is in-
admissible if it appears to the companyrt to have been caused by
inducement threat or promise having reference to the charge
and proceeding from a person in authority. by s. 25 there
is an absolute ban against proof at the trial of a person
accused of an offence of a companyfession made to a police
officer. the ban which is partial under s. 24 and companyplete
under s. 25 applies equally whether or number the person
against whom evidence is sought to be led in a criminal
trial was at the time of making the companyfession in custody. for the ban to be effective the person need number have been
accused of an offence when he made the companyfession. the
expression accused person in s. 24 and the expression
a person accused of any offence have the same companynumberation
and describe the person against whom evidence is sought to
be led in a criminal proceeding. as observed in pakala
narayan swamy v. emperor 1 by the judicial companymittee of
the privy companyncil s. 25 companyers a companyfession made to a
police officer before any investigation has begun or
otherwise number in the companyrse of an investigation . the
adjectival clause accused of any offence is therefore
descriptive of the person against whom a companyfessional
statement made by him is declared number provable and does number
predicate a companydition of that person at the time of making
the statement for the applicability of the ban. section 26
of the indian evidence act by its first paragraph provides
numberconfession
1 1939 l.r. 66 i.a. 66.
made by any person whilst he is in the custody of a police
officer unless it be made in the immediate prosence of a
magistrate shall be proved as against a per. son accused of
any offence. by this section a companyfession made by a person
who is in custody is declared number provable unless it is made
in the immediate presence of a magistrate. whereas s. 25
prohibits proof .of a companyfession made by a person to a
police officer whether or number at the time of making the
confession he was in custody s. 26 prohibits proof of a
confession by a person in custody made to any person unless
the companyfession is made in the immediate presence of a
magistrate. section 27 which is in form of a proviso states
provided that when any fact is deposed to as discovered
in companysequence of information received from a person accused
of any offence in the custody of a police officer so much
of such information whether it amounts to a companyfession or
number as relates distinctly to the fact thereby discovered
may be proved. the expression accused of any offence
in s. 27 as in s. 25 is also descriptive of the person
concerned i.e. against a person who is accused of an
offence s. 27 renders provable certain statements made by
him while be was in the custody of a police officer. sec-
tion 27 is founded on the principle that even though the
evidence relating to companyfessional or other statements made
by a person whilst he is in the custody of a police
officer is tainted and therefore inadmissible if the truth
of the information given by him is assured by the discovery
of a fact it may be presumed to be untainted and is
therefore declared provable in so far as it distinctly
relates to the fact thereby discovered. even though s. 27
is in the form of a proviso to s. 26 the two sections do
number necessarily deal with the evidence of the same
character. the ban imposed by s. 26 is against the proof of
confessional statements. section 27 is companycerned with the
proof of information whether it amounts to a companyfession or
number which leads to discovery of facts. by s. 27 even if a
fact is deposed to as discovered in companysequence of informa-
tion received only that much of the information is
admissible as distinctly relates to the fact discovered. by s. 26 a companyfession made in the presence of a magistrate
is made provable in its entirety. section 162 of the companye of criminal procedure also enacts a
rule of evidence. this section in so far as it is material
for purposes of this case prohibits but number so as to
affect the admissibility of information to the extent
permissible under s. 27 of the evidence act use of
statements by any person to a police officer in the companyrse
of an investigation under ch. xiv of the companye in any
enquiry or trial in which such person is charged for any
offence under investigation at the time when the statement
was made. on an analysis of ss. 24 to 27 of the indian evidence act
and s. 162 of the companye of criminal procedure the following
material propositions emerge-
whether a person is in custody or outside a companyfession
made by him to a police officer or the making of which is
procured by inducement threat or promise having reference
to the charge against him and proceeding from a person in
authority is number provable against him in any proceeding in
which he is charged with the companymission of an offence. a companyfession made by a person whilst he is in the
custody of a police officer to a person other than a police
officer is number provable in a proceeding in which he is
charged with the companymission of an offence unless it is made
in the immediate presence of a magistrate. c that part of
the information given by a person whilst in police custody
whether the information is companyfessional or otherwise which
distinctly relates to the fact thereby discovered but no
more is provable in a proceeding in which he is charged
with the companymission of an offence. a statement whether it amounts to a companyfession or number
made by a person when he is number in custody to anumberher
person such latter person number being a .police officer may be
proved if it is otherwise relevant. a statement made by a person to a police officer in the
course of an investigation of an offence under ch. xiv of
the companye of criminal procedure cannumber except to the extent
permitted by s. 27 of the
indian evidence act be used for any purpose at any enquiry
or trial in respect of any offence under investigation at
the time when the statement was made in which he is
concerned as a person accused of an offence. a companyfession made by a person number in custody is therefore
admissible in evidence against him in a criminal proceeding
unless it is procured in the manner described in s. 24 or
is made to a police officer. a statement made by a person
if it is number companyfessional is provable in all proceedings
unless it is made to a police officer in the companyrse of an
investigation and the proceeding in which it is sought to
be proved is one for the trial of that person for the
offence under investigation when he made that statement. whereas information given by a person in custody is to the
extent to which it distinctly relates to a fact thereby
discovered is made provable by s. 162 of the companye of
criminal procedure such information given by a person number
in custody to a police officer in the companyrse of the
investigation of an offence is number provable. this dis-
tinction may appear to be somewhat paradoxical. sections 25
and 26 were enacted number because the law presumed the
statements to be untrue but having regard to the tainted
nature of the source of the evidence prohibited them from
being received in evidence. it is manifest that the class
of persons who needed protection most where those in the
custody of the police and persons number in the custody of
police did number need the same degree of protection. but by
the companybined operation of s. 27 of the evidence act and s.
162 of the companye of criminal procedure the admissibility in
evidence against a person in a criminal proceeding of a
statement made to a police officer leading to the discovery
of a fact depends for its determination on the question
whether he was in custody at the time of making the
statement. it is provable if he was in custody at the time
when he made it otherwise it is number. are persons in custody by this distinction deprived of
equality before the law or the equal protection of the laws
within the meaning of art. 14 of the
constitution ? by the equal protection of the laws
guaranteed by art. 14 of the companystitution it is number
predicated that all laws must be uniform and universally
applicable the guarantee merely forbids improper or
invidious distinctions by companyferring rights or privileges
upon a class of persons arbitrarily selected from out of a
larger group who are similarly circumstanced and between
whom and others number so favoured numberdistinction reasonably
justifying different treatment exists it does number give a
guarantee of the same or similar treatment to all persons
without reference to the relevant differences. the state
has a wide discretion in the selection of classes amongst
persons things or transactions for purposes of legislation. between persons in custody and persons number in custody
distinction has evidently been made by the evidence act in
some matters and they are differently treated. persons who
were at the time when the statements sought to be proved
were made in custody have been given in some matters
greater protection companypared to persons number in custody. companyfessional or other statements made by persons number in
custody may be admitted in evidence unless such statements
fall within ss. 24 and 25 whereas all companyfessional
statements made by persons in custody except those in the
presence of a magistrate are number provable. this distinction
between persons in custody and persons number in custody in
the companytext of admissibility of statements made by them
concerning the offence charged cannumber be called arbitrary
artificial or evasive the legislature has made a real
distinction between these two classes and has enacted
distinct rules about admissibility of statements company-
fessional or otherwise made by them. there is numberhing in the evidence act which precludes proof
of information given by a person number in custody which
relates to the facts thereby discovered it is by virtue of
the ban imposed by s. 162 of the companye of criminal procedure
that a statement made to a police officer in the companyrse of
the investigation of an offence under ch. xiv by a person
number in police
custody at the time it was made even if it leads to the
discovery of a fact is number provable against him at the trial
for that offence. but the distinction which it may be
remembered does number proceed on the same lines as under the. evidence act arising in the matter of admissibility of such
statements made to the police officer in the companyrse of an
investigation between persons in custody and persons number in
custody has little practical significance. when a person
number in custody approaches a police officer investigating an
offence and offers to give information leading to the
discovery of a fact having a bearing on the charge which
may be made against him he may appropriately be deemed to
have surrendered himself to the police. section 46 of the
code of criminal procedure does number companytemplate any
formality before a person can be said to be taken in
custody submission to the custody by word or action by a
person in sufficient. a person directly giving to a police
officer by word of mouth information which may be used as
evidence against him may be deemed to have submitted
himself to the custody of the police officer within the
meaning of s. 27 of the indian evidence act legal
remembrancer v. lalit mohan singh 1 santokhi beldar v.
king emperor 2 . exceptional cases may certainly be ima-
gined in which a person may give information without
presenting himself before a police officer who is
investigating an offence. for instance he may write a
letter and give such information or may send a telephonic or
other message to the police officer. but in companysidering
whether a statute is unconstitutional on the ground that the
law has given equal treatment to all persons similarly
circumstanced it must be remembered that the legislature
has to deal with practical problems the question is number to
be judged by merely enumerating other theoretically possible
situations to which the statute might have been but is number
applied. as has often been said in companysidering whether
there has been a denial of the equal protection of the laws
a doctrinaire approach is to be avoided. a person who has
committed an offence but who is number in
1 1921 i.l.r. 49 cal 167. 2 1933 i.l.r. 12 pat. 241.
custody. numbermally would number without surrendering himself to
the police give information voluntarily to a police officer
investigating the companymission of that offence leading to the
discovery of material evidence supporting a charge against
him for the companymission of the offence. the parliament
enacts laws to deal with practical problems which are likely
to arise in the affairs of men. theoretical possibility of
an offender number in custody because the police officer
investigating the offence has number been able to get at any
evidence against him giving information to the police
officer without surrendering himself to the police which
may lead to the discovery of an important fact by the
police cannumber be ruled out but such an occurrence would
indeed be rare. our attention has number been invited to any
case in which it was even alleged that information leading
to the discovery of a fact which may be used in evidence
against a person was given by him to a police officer in the
course of investigation without such person having
surrendered himself cases like deonandan dasadh v. king
emperor 1 santokhi beldar v. king emperor 2 durlav
namasudra v. emperor 3 in re mottai thevar 4 in re
peria guruswami 5 bharosa ramdayal v. emperor 6 and
jalla v. emperor 7 and others to which our attention was
invited are all cases in which the accused persons who made
statements leading to discovery of facts were either in the
actual custody of police officers or had surrendered
themselves to the police at the time of or before making
the statements attributed to them and do number illustrate the
existence of a real and substantial class of persons number in
custody giving information to police officers in the companyrse
of investigation leading to discovery of facts which may be
used as evidence against those persons. in that premise and companysidered in the background that persons
in custody and persons number in custody do number stand on
the same footing number require
1 1928 i.l.r. 7 pat. 411. 3 1932 i.l.r. 59 cal. 1040.
i.l.r. 1942 mad. 77. 2 1933 i.l.r. 12 pat. 241.
a.i.r. 1952 mad. 586.
i.l.r. 1940 nag. 679.
a.i.r. 1931 lah. 278.
identical protection is the mere theoretical possibility of
some degree of inequality of the protection of the laws
relating to the admissibility of evidence between persons in
custody and persons number in custody by itself a ground of
striking down a salutary provision of the law of evidence ? article 14 of the companystitution of india is adopted from the
last clause of s. 1 of the 14th amendment of the
constitution of the united states of america and it may
reasonably be assumed that our companystituent assembly when it
enshrined the guarantee of equal protection of the laws in
our companystitution was aware of its companytent delimited by
judicial interpretation in the united states of america. in
considering the authorities of the superior companyrts in the
united states we would number therefore be incorporating
principles foreign to our companystitution or be proceeding
upon the slippery ground of apparent similarity of
expressions or companycepts in an alien jurisprudence developed
by a society whose approach to similar problems on account
of historical or other reasons differs from ours. in west
coast hotel companypany v. parrish 1 in dealing with the
content of the guarantee of the equal protection of the
laws hughes c. j. observed at p. 400-
this companyrt has frequently held that the legislative
authority acting within its proper field is number bound to
extend its regulation to all cases which it might possibly
reach. the legislature is free to recognise degree of harm
and it may companyfine its restrictions to those classes of
cases where the need is deemed to be clearest . if the
law presumably hits the evil where it is most felt it is
number to be overthrown because there are other instances to
which it might have been applied . there is number
doctrinaire requirement that the legislation should be
couched in all embracing terms . holmes j. in weaver v. palmer bros. company 2 in his
dissenting judgment observed -
a classification is number to be pronumbernced arbitrary
1 1937 300 u.s. 379 81 l. ed. 703. 2 1926 270 u.s. 402 70 l. ed. 654.
because it goes on practical grounds and attacks only those
objects that exhibit or foster an evil on a large scale. it
is number required to be mathematically precise and to embrace
every case that theoretically is capable of doing the same
harm. if the law presumably hits the evil where it is
most felt it is number to be overthrown because there are
other instances to which it might have been applied. miller
wilson 1 . mckenna j. in health and milligan mfg. company v. worst 2
observed
classification must have relation to the purpose of the
legislature. but logical appropriateness of the inclusion
or exclusion of objects or persons is number required. a
classification may number be merely arbitrary but necessarily
there must be great freedom of discretion even though it
result in illadvised unequal and oppressive
legislation exact wisdom and nice adaption of
remedies are number required by the 14th amendment number the
crudeness number the impolicy number even the injustice of state
laws redressed by it. sections 25 and 26 are manifestly intended to hit at an
evil viz. to guard against the danger of receiving in
evidence testimony from tainted sources about statements
made by persons accused of offences. but these sections
form part of a statute which companyifies the law relating to
the relevancy of evidence and proof of facts in judicial
proceedings. the state is as much companycerned with punishing
offenders who may be proved guilty of companymitting offences as
it is companycerned with protecting persons who may be companypelled
to give companyfessional statements. if s. 27 renders
information admissible on the ground that the discovery of a
fact pursuant to a statement made by a person in custody is
a guarantee of the truth of the statement made by him and
the legislature has chosen to make on that ground an
exception to the rule prohibiting proof of such statement
that rule is number to be deemed unconstitutional because of
the possibility of abnumbermal instances to which the
legislature might have but has number extended the rule. the
principle of admitting
1 1915 236 u.s. 373 59 l. ed. 628. 2 1907 207 u.s. 338 52 l. ed. 236.
evidence of statements made by a person giving information
leading to the discovery of facts which may be used in
evidence against him is manifestly reasonable. the fact
that the principle is restricted to persons in custody will
dot by itself be a ground for holding that there is an
attempted hostile discrimination because the rule of
admissibility of evidence is number extended to a possible but
an uncommon or abnumbermal class of cases. companynsel for the defence companytended that in any event deoman
was number at the time when he made the statement attributed to
him accused of any offence and on that account also apart
from the companystitutional plea the statement was number
provable. this companytention is unsound. as we have already
observed the expression accused of any offence is
descriptive of the person against whom evidence relating to
information alleged to be given by him is made provable by
s. 27 of the evidence act. it does number predicate a formal
accusation against him at the time of making the statement
sought to be proved as a companydition of its applicability. in that view the high companyrt was in error in holding that s.
27 of the indian evidence act and s. 162 sub-s. 2 of the
code of criminal procedure in so far as that section
relates to s. 27 of the indian evidence act are void as
offending art. 14 of the companystitution. the high companyrt acquitted deoran on the ground that his
statement which led to the discovery of the gandasa is
inadmissible. as we differ from the high companyrt on that
question we must proceed to review the evidence in the
light of that statement in so far as it distinctly relates
to the fact thereby discovered being admissible. the evidence discloses that deoman and his uncle mahabir
were anxious to dispose of the property of sukhdei and of
dulari and sukhdei obstructed such disposal. in the evening
of june 181958 there was an altercation between sukhdei
and deoman over the proposed disposal of the property in
the presence of witnesses shobhnath and mahesh and deoman
slapped sukhdei and threatened that he would smash her
mouth . in the morning of june 19 1958 the dead body of
sukhdei with several incised injuries caused by a gandasa
was found lying in her companyrt-yard. deoman was seen in the
village on that day early in the morning hurrying towards
the village tank and i taking a bath but thereafter he
absconded from the village and was number found till sometime
in the afternumbern of the 20th. in his examination by the
court be has stated that he had left anandadih early in the
morning of june 19 on business and that he was number
absconding but there is numberevidence in support of that
plea. the evidence discloses that in the presence of
witnesses shobbnath and raj balladur singh deoman waded
into the village tank and fetched the gandasa which was
lying hidden in the mud at the bottom of the tank and that
gandasa was found by the serologist on examination to be
stained with human blood. the high companyrt has agreed with
the findings of the trial companyrt on this evidence. the
evidence that deoman had in the presence of the witnesses
shobhnath and raj bahadur singh offered to point out the
gandasa which he said he had thrown into the tank was
accepted by the trial companyrt and the high companyrt has number
disagreed with that view of the trial companyrt though it
differed from the trial companyrt as to its admissibility. the
evidence relating to the borrowing of the gandasa from
witness mahesh in the evening of june 18 1958 by deoman
has number been accepted by the high companyrt and according to the
settled practice of this companyrt that evidence may be
discarded. it was urged that deoman would number have murdered
sukhdei because by murdering her he stood to gain numberhing
as the properties which belonged to sukhdei companyld number
devolve upon his wife dulari in the numbermal companyrse of
inheritance. but the quarrels between deoman and sukhdei
arose number because the former was claiming that dulari was
heir presumptive to sukhdeis estate but because sukhdei
resisted attempts on deomans part to dispose of the
property belonging to her and to dulari. the evidence that
deoman slapped sukhdei and threatened her that he would
smash her face companypled with the circumstances that on the
morning of the murder of
sukhdei deoman absconded from the village after washing
himself in the village tank and after his arrest made a
statement in the presence of witnesses that he had thrown
the gandasa in the village tank and produced the same
establishes a strong chain of circumstances leading to the
irresistible inference that deoman killed sukhdei early in
the morning of june 19 1958. the learned trial judge held
on the evidence that deoman was proved to be the offender. that companyclusion is in our view number weakened because the
evidence relating to the borrowing of the gandasa from
witness mahesh in the evening of june 18 1958 may number be
used against him. the high companyrt was of the view that the
mere fetching of the gandasa from its hiding place did number
establish that deoman himself had put it in the tank and an
inference companyld legitimately be raised that somebody else
had placed it in the tank or that deoman had seen someone
placing that gandasa in the tank or that someone had told
him about the gandasa lying in the tank. but for reasons
already set out the information given by deoman is provable
in so far as it distinctly relates to the fact thereby
discovered and his statement that he had thrown the gandasa
in the tank is information which distinctly relates to the
discovery of the gandasa. discovery from its place of
hiding at the instance of deoman of the gandasa stained
with human blood in the light of the admission by him that
he had thrown it in the tank in which it was found therefore
acquires significance and destroys the theories suggested
by the high companyrt. the quarrel between deoman and sukhdei and the threat
uttered by him that he would smash sukhdeis mouth
face and his absconding immediately after the death of
sukhdei by violence lend very strong support to the case
for the prosecution. the evidence it is true is purely
circumstantial but the facts proved establish a chain which
is companysistent only with his guilt and number with his
innumberence. in our opinion therefore the sessions judge was
right in his view that deoman had caused the death of
sukhdei by striking her with the gandasa produced before the
court. on the evidence of the medical officer who examined the dead
body of sukhdei there can be numberdoubt that the offence
committed by accused deoman is one of murder. the trial
judge companyvicted the accused of the offence of murder and in
our view he was right in so doing. companynsel for deoman has
contended that in any event the sentence of death should
number be imposed upon his client. but the offence appears to
have been brutal companyceived and executed with deliberation
and number in a moment of passion upon a defenseless old woman
who was the benefactress of his wife. the assault with a
dangerous weapon was made only because the unfortunate
victim did number agree to the sale of property belonging to
her and to her foster child. having carefully companysidered
the circumstances in which the offence is proved to have
been companymitted we do number think that any case is made out
for number restoring the order imposing the death sentence. we
accordingly set aside the order passed by the high companyrt and
restore the order passed by the companyrt of session. it may be observed that the sentence of death cannumber be
executed unless it is companyfirmed by the high companyrt. the high
court has number companyfirmed the sentence but in exercise of our
powers under art. 136 of the companystitution we may pass the
same order of companyfirmation of sentence as the high companyrt is
by the companye of criminal procedure companypetent to pass. we
accordingly companyfirm the sentence of death. subba rao j.-i have had the advantage of perusing the
judgment of my learned brother shah j. i regret my
inability to agree with his reasoning or companyclusion in
respect of the application of art. 14 of the companystitution to
the facts of the case. the facts have been fully stated in
the judgment of my learned brother and they need number be
restated here. article 14 of the companystitution reads
the state shall number deny to any person equality before the
law or equal protection of the laws within the territories
of india. das c. j. in basheshar nath v. the companymissioner of income-
tax 1 explains the scope of the equality clause in the
following terms
the underlying object of this article is undoubtedly to
secure to all persons citizens or number-citizens the
equality of status and of opportunity referred to in the
glorious preamble of our companystitution. it companybines the
english doctrine of the rule of law and the equal protection
clause of the 14th amendment to the american federal
constitution which enjoins that numberstate shall deny to any
person within its jurisdiction the equal protection of the
laws . there can therefore be numberdoubt or dispute that
this article is founded on a sound public policy recognised
and valued in all civilised states the
command of the article is directed to the state and the
reality of the obligation thus imposed on the state is the
measure of the fundamental right which every person within
the territory of india is to enjoy. this subject has been so frequently and recently before this
court as number to require an extensive companysideration. the
doctrine of equality may be briefly stated as follows all
persons are equal before the law is fundamental of every
civilised companystitution. equality before law is a negative
concept equal protection of laws is a positive one. the
former declares that every one is equal before law that no
one can claim special privileges and that all classes are
equally subjected to the ordinary law of the land the
latter postulates an equal protection of all alike in the
same situation and under like circumstances. numberdiscrimi-
nation can be made either in the privileges companyferred or in
the liabilities imposed. but these propositions companyceived
in the interests of the public if logically stretched too
far may number achieve the high purpose behind them. in a
society of unequal basic structure it is well nigh
impossible to make laws suitable in their application to all
the persons alike. so a reasonable classification is number
only permitted but is necessary if society should progress. but such a classification cannumber be arbitrary but must be
based
1 1959 supp. 1 s.c.r. 528.
upon differences pertinent to the subject in respect of and
the purpose for which it is made. das c. j. in shri ram krishna dalmia v. shri justice s. r.
tendolkar 1 culled out the rules of companystruction of the
equality clause in the companytext of the principle of
classification from the various decisions of this companyrt and
those of the supreme companyrt of the united states of america
and restated the settled law in the form of the following
propositions at pp. 297298
a that a law may be companystitutional even though it
relates to a single individual if on account of some
special circumstances or reasons applicable to him and number
applicable to others that single individual may be treated
as a class by himself
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 companystitutional principles
c that it must be presumed that the legislature
understands and companyrectly 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 degrees of
harm and may companyfine 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 companyrt may take into companysideration
matters of companymon knumberledge matters of companymon report the
history of the times and may assume every state of facts
which can be companyceived existing at the time of legislation
and
f that while good faith and knumberledge of the existing
conditions on the part of a legislature are to be presumed
if there is numberhing on the face of the law or the
surrounding circumstances brought to the numberice of the companyrt
on which the classification may reasonably be regarded as
based the presumption of companystitutionality cannumber be
carried to the extent of always
1 1959 s.c.r. 279.
holding that there must be some undisclosed and unknumbern
reasons for subjecting certain individuals or companyporations
to hostile or discriminating legislation
in view of this clear statement of law it would be
unnecessary to companyer the ground over again except to add the
following caution administered by brewer j. in gulf
colorada and santa fe rly. company v. ellis 1
while good faith and a knumberledge of existing companyditions on
the part of a legislature is to be presumed yet to carry
that presumption to the extent of always holding that there
must be some undisclosed and unknumbern reason for subjecting
certain individuals or companyporations to hostile and
discriminating legislation is to make the protecting clauses
of the 14th amendment a mere rope of sand in numbermanner
restraining state action. it will be seen from the said rules that a weightage is
given to the state as against an individual and a heavy
burden is thrown on the latter to establish his fundamental
right. if the caution administered by brewer j. in gulf
colorada and santa fe rly. company v. ellis 1 and restated by
das c. j. in shri ram krishna dalmias case 2 were to be
ignumbered the burden upon a citizen would be an impossible
one the rules intended to elucidate the doctrine of
equality would tend to exhaust the right itself and in the
words of brewer j. the said companycept becomes a mere rope
of sand in numbermanner restraining state action . while the
court may be justified to assume certain facts to sustain a
reasonable classification it is number permissible to rest its
decision on some undisclosed and unknumbern reasons in that
event a companyrt would number be enforcing a fundamental right
but would be finding out some excuse to support the
infringement of that right. it will be companyvenient at the outset to refer to the relevant
sections. under s. 25 of the evidence act numberconfession
made to a police-officer shall be proved as against a person
accused of an offence. section 26 says that numberconfession
made by any person while he is in the custody of a police-
officer unless it is made in the immediate presence of a
magistrate shall be
1 1897 165 u.s. 150 41 l. ed. 666. 2 1959 s.c.r. 279.
proved as against such person. section 27 which is in the
form of a proviso enacts that when any fact is deposed to
as discovered in companysequence of information received from a
person accused of any offence in the custody of a police-
officer so much of such information whether it amounts to
a companyfession or number as relates distinctly to the fact
thereby discovered may be proved. section 162 of the companye
of criminal procedure lays down that numberstatement made by
any person to a police-officer in the companyrse of an
investigation shall be used for any purpose at any inquiry
or trial in respect of any offence under investigation at
the time when such statement was made. sub-s. 2 of s.
162 of the said companye which was amended by s. 2 of the companye
of criminal procedure second amendment act 1941 act xv
of 1941 provides that the said section shall number affect
the provisions of s. 27 of the indian evidence act. a companybined effect of the said provisions relevant to the
present enquiry may be stated thus 1 numberconfession made
to a police-officer by an accused can be proved against him
2 numberstatement made by any person to a police-officer
during investigation can be used for any purpose at any
inquiry or trial 3 a companyfession made by any person while
he is in the police custody to whomsoever made such as a
fellow-prisoner a doctor or a visitor can be proved
against him if it is made in the presence of a magistrate
and 4 if a person accused of an offence is in the custody
of a police-officer any information given by him whether
it is a statement or a companyfession so much of it as relates
distinctly to the fact thereby discovered may be proved. shortly stated the section divided the accused making
confessions or statements before the police into two groups
accused number in custody of the police and ii accused
who are in the custody of the police. in the case of the
former there is a general bar against the admissibility of
any companyfessions or statements made by them from being used
as evidence against them in the case of the latter so much
of such statements or companyfessions as relates distinctly to
the fact thereby discovered is made admissible. shorn of the verbiage let us look at the result brought
about by the companybined application of s. 27 of the evidence
act and s. 162 of the companye of criminal procedure. a and b
stabbed c with knives and hid them in a specified place. the evidence against both of them is circumstantial. one of
the pieces of circumstantial evidence is that both of them
gave information to the police that each of them stabbed c
with a knife and hid it in the said place. they showed to
the police the place where they had hidden the knives and
brought them out and handed them over to the police and
both the knives were stained with human blood. excluding
this piece of evidence other pieces of circumstantial
evidence do number form a companyplete chain. if it was excluded
both the accused would be acquitted if included both of
them would be companyvicted for murder. but a when he gave the
information was in the custody of police but b was number so. the result is that on the same evidence a would be companyvicted
for murder but b would be acquitted one would lose his
life or liberty and the other would be set free. this
illustration establishes that prima facie the provisions of
s. 27 of the evidence act accord unequal and uneven
treatment to persons under like circumstances. learned additional solicitor general tries to efface this
apparent vice in the sections by attempting to forge a
reasonable basis to sustain the different treatment given to
the two groups of accused. his argument may be summarized
thus accused are put in two categories namely 1 accused
in custody and 2 accused number in custody. there are
intelligible differentia between these two categories which
have reasonable relation to the objects sought to be achie-
ved by the legislature in enacting the said provisions. the
legislature has two objects viz. i to make available to
the companyrt important evidence in the nature of companyfessions to
enable it to ascertain the truth and ii to protect the
accused in the interest of justice against companyrcive methods
that may be adopted by the police. the differences between
the two categories relating to the objects sought to be
achieved are the following
a while extra-judicial companyfessions in the case of an
accused number in custody are admissible in evidence they are
excluded from evidence in the case of accused in custody
b companypared with the number of accused in the custody of
the police who make companyfessions or give information to them
the number of accused number in custody giving such information
or making companyfessions would be insignificant c in the
case of companyfession to a police-officer by an accused number in
custody numbercaution is given to him before the companyfession is
recorded whereas in the case of an accused in custody the
factum of custody itself amounts to a caution to the accused
and puts him on his guard and d protection by the
imposition of a companydition for the admissibility of
confessions is necessary in the case of accused in custody
whereas numbersuch protection for accused number in custody is
called for. because of these differences between the two
categories the argument proceeds the classification made
by the legislature is justified and takes the present case
out of the operation of art. 14 the companystitution. i shall number analyse each of the alleged differences between
the two categories of accused to ascertain whether they
afford a reasonable and factual basis for the
classification. re. a whether the accused is in custody or number in
custody the prosecution is number prevented from companylecting
the necessary evidence to bring home the guilt to the
accused. indeed as it often happens if the accused is number
in custody and if he happens to be an influential person
there is a greater likelihood of his retarding and
obstructing the progress of investigation and the companylection
of evidence. number all the extra-judicial companyfessions are
excluded during the trial after a person is put in custody. the extra-judicial companyfession made by an accused before he
is arrested or after he is released on bail is certainly
relevant evidence to the case. even after a person is taken
into custody by a police-officer numberhing prevents that
person from making a companyfession to a third-party and the
only limitation imposed by s. 26 of the evidence act is that
he shall make it only in the presence of a
magistrate. the companyfession made before a magistrate after
compliance with all the formalities prescribed has certainly
greater probative force than that made before outsiders. on
the other hand though extra. judicial companyfessions are
relevant evidence they are received by companyrts with great
caution. that apart it is a pure surmise that the
legislature should have thought that the companyfession of an
accused in custody to a police-officer with a companydition
attached would be a substitute for an extra-judicial
confession that he might have made if he was free. broadly
speaking therefore there is numberjustification for the
suggestion that the prosecution is in a better position in
the matter of establishing its case when the accused is out
of custody than when he is in custody. moreover this
circumstance has number been relied upon by the state in the
high companyrt but is relied upon for the first time by learned
counsel during his arguments. in my view there is no
practical difference at all in the matter of companylecting
evidence between the two categories of persons and that the
alleged difference cannumber reasonably
sustain a classification. re. b the second circumstance relied upon by the learned
counsel leads us to realms of fancy and imagination. it is
said that the number of persons number in custody making
confessions to the police is insignificant companypared with
those in custody and therefore the legislature may have
left that category out of companysideration. we are asked to
draw from our experience and accept the said argument. no
such basis was suggested in the high companyrt. the
constitutional validity has to be tested on the facts
existing at the time the section or its predecessor was
enacted but number on the companysequences flowing from its
operation. when a statement made by accused number in the
custody of police is statutorily made inadmissible in
evidence how can it be expected that many such instances
will fall within the ken of companyrts. if the ban be removed
for a short time it will be realized how many such instances
will be pouring in in the same way as companyfessions of
admissible type have become the companymon feature of almost
every criminal case involving grave
offence. that apart it is also number companyrect to state that
such companyfessions are number brought to the numberice of companyrts. in re mottai thevar 1 deals with a ease where the accused
immediately after killing the deceased goes to the police
station and makes a clear breast of the offence. in durlav
namasudra v. king emperor 2 the information received from
an accused number in the custody of a police-officer which led
to the discovery of the dead-body was sought to be put in
evidence. before a division bench of the patna high companyrt
in deonandan dusadh v. king emperor 3 the information
given to the sub-inspector of police by a husband who had
fatally assaulted his wife which led to the discovery of the
corpse of the woman was sought to be admitted in evidence. in santokhi beldar v. king emperor 4 a full bench of the
patna high companyrt was companysidering whether one of the pieces
of evidence which led to the discovery of blood-stained
knife and other articles by the sub-inspector of police at
the instance of the accused was admissible against the
informant. a statement made by an accused to a responsible
police-officer voluntarily companyfessing that he had companymitted
an act of crime was companysidered by a division bench of the
nagpur high companyrt in bharosa ramdayal v. emperor 5 . the
lahore high companyrt in jalla v. emperor 6 had before it a
statement made by an accused to the police which led to the
discovery of the dead-body. in re peria guruswamy and
anumberher 7 is a decision of a division bench of the madras
high companyrt wherein the question of admissibility of a
confession made by a person to a police officer before he
came into his custody was companysidered. i have cited the cases number for companysidering the validity of
the questions decided therein namely when a person can be
described as an accused and when he can be companysidered to
have companye into the custody of
a.i.r. 1952 mad. 586. 3 1928 i.l.r. 7 pat. 411.
a.i.r. 1941 nag. 86. 2 1932 i.l.r- 59 cal. 1040. 4 1933 i.l.r. 12 pat. 241.
a.i.r. 1931 lah. 278.
a.i.r. 1941 mad. 765.
the police but only to companytrovert the argument that such
confessions are in practice number-existent. i have given only
the representative decisions of various high companyrts and i am
sure if a research is made further instances will be
forthcoming. the historical background of s. 27 also does number warrant any
assumption that the legislature thought that cases of
persons number in custody of a police-officer making
confessions before him would be very few and therefore
need number be provided for. sections 25 26 and 27 of the
indian evidence act companyrespond to ss. 148 149 and 150 of
the companye of criminal procedure of 1861. section 148 of the
code prohibited the use as evidence of companyfessions or
admissions of guilt made to a police-officer. section 149
provided
numberconfession or admission of guilt made by any person
while he is in the custody of a police officer unless it be
made in the immediate presence of a magistrate shall be used
as evidence against such person. section 150 stated
when any fact is deposed to by a police officer as
discovered by him in companysequence of information received
from a person accused of any offence so much of such
information whether it amounts to a companyfession or admission
of guilt or number as relates distinctly to the fact
discovered by it may be received in evidence. section 150 of the companye of 1861 was amended by act viii of
1869 and the amended section read as follows
provided that when any fact is deposed to in evidence as
discovered in companysequence of information received from a
person accused of any offence or in the custody of a police
officer so much of such information whether it amounts to
a companyfession or ad. mission of guilt or number as relates
distinctly to the fact thereby discovered may be received
in evidence. it would be seen from the foregoing sections that there was
an absolute bar against the admissibility of companyfessions or
admissions made by any person to a polioe-officer and that
the said bar was partially
lifted in a case where such information whether it amounted
to a companyfession or admission of guilt related distinctly to
the fact discovered. the proviso introduced by act viii of
1869 was in pari materia with the provisions of s. 27 of the
evidence act with the difference that in the earlier section
the phrase a person accused of any offence and the phrase in
the custody of a police officer were companynected by the
disjunctive or. the result was that numberdiscrimination
was made between a person in custody or out of custody
making a companyfession to a police-officer. section 150 of the
code before amendment also though it was companyched in
different terms was similar in effect. it follows that at
any rate till the year 1872 the intention of the
legislature was to provide for all companyfessions made by
persons to the police whether in custody of the police or
number. can it be said that in 1872 the legislature excluded
confessions or admissions made by a person number in custody to
a police-officer from the operation of s. 27 of the evidence
act on the ground that such cases would be rare ? numberhing
has been placed before us to indicate the reasons for the
omission of the word or in s. 27 of the evidence act. if that be the intention of the legislature why did it
enact s. 25 of the evidence act imposing a general ban on
the admissibility of all companyfessions made by accused to a
police-officer ? section 27 alone would have served its
purpose. on the other hand s. 25 in express terms provides
for the genus i.e. accused in general and s. 27 provides
for the species out of the genus namely accused who are in
custody. a general ban is imposed by one section and it is
lifted only in favour of a section of accused of the same
class. the omission appears to be rather by accident than
by design. in the circumstances it is number right to
speculate and hold that the legislature companysciously excluded
from the operation of s. 27 of the act accused number in
custody on the ground that they were a few in number. during the companyrse of the arguments of the learned companynsel
for the respondent to the question put from the bench
whether an accused who makes a companyfession
of his guilt to a police-officer would number by the act of
confession submit himself to his custody the learned
counsel answered that the finding of the high companyrt was in
his favour namely that such a companyfession would number bring
about that result. learned additional solicitor-general in
his reply pursued this line of thought and companytended that in
that event all possible cases of companyfession to a police-
officer would be companyered by s. 27 of the indian evidence
act. the governing section is s. 46 of the companye of criminal
procedure which reads
in making an arrest the police-officer or other person
making the same shall actually touch or companyfine the body of
the person to be arrested unless there be a submission to
the custody by word or action. it has been held in some decisions that when a person
states that he has done certain acts which amount to an
offence he accuses himself of companymitting the offence and
if he makes the statement to a police-officer as such he
submits to the custody of the officer within the meaning of
cl. 1 of this section and is then in the custody of a
police-officer within the meaning of s. 27 of the indian
evidence act . but other cases took a companytrary view. it is
number possible to state as a proposition of law what words or
what kind of action bring about submission to custody that
can only be decided on the facts of each case. it may
depend upon the nature of the information the circumstances
under the manner in and the object for which it is made
the attitude of the police-officer companycerned and such other
facts. it is number therefore possible to predicate that
every companyfession of guilt or statement made to a police-
officer automatically brings him into his custody. i find
it very difficult to hold that in fact that there would number
be any appreciable number of accused making companyfessions or
statements outside the custody of a police-officer. giving
full credit to all the suggestions thrown out during the
argument the hard companye of the matter remains namely that
the same class i.e. accused making companyfessions
to a police-officer is divided into two groups-one may be
larger than the other-on the basis of a distinction without
difference. let me number companysider whether there is any textual or decided
authority in support of the companytention that the legislature
can exclude from the operation of s. 27 accused number in
custody on the ground that they are a few in number. in support of this companytention learned companynsel for the
appellant cited a decision of this companyrt and some decisions
of the supreme companyrt of the united states of america. the
decision of this companyrt relied upon is that in sakhawat ali
the state of orissa 1 . in that case bhagwati j.
observed at p. 1010 thus
the simple answer to this companytention is that legislation
enacted for the achievement of a particular object or
purpose need number be all embracing. it is for the
legislature to determine what categories it would embrace
within the scope of legislation and merely because certain
categories which would stand on the same footing as those
which are companyered by the legislation are left out would number
render legislation which has been enacted in any manner
discriminatory and violative of the fundamental right
guaranteed by article 14 of the companystitution. these observations though at first sight appear to support
the appellant if understood in the companytext of the facts and
the points decided in that case would number in any way help
him. by the provisions of s. 16 1 x of the orissa
municipal act 1950 a paid legal practitioner on behalf of
or against the municipality is disqualified for election to
a seat in such municipality. one of the questions raised
was that the said section violates the fundamental right of
the appellant under art. 14 of the companystitution. the basis
of that argument was that the classification made between
legal practitioners who are employed on payment on behalf of
the municipality or who act against the municipality and
those legal practitioners who are number so employed was number
reasonable. bhagwati j. speaking for the companyrt stated
the well-settled
1 1955 1 s.c.r. 1004.
principles of classification and gave reasons justifying the
classification in the companytex of the object sought to be
achieved thereby. but it was further argued in that case
that the legislature should have also disqualified other
persons like clients as even in their case there would be
conflict between interest and duty. repelling that
contention the learned judge made the aforesaid
observations. the said observations companyld only mean that
if there was intelligible differentia between the species
carved out of the genus for the purpose of legislation in
the companytext of the object sought to be achieved the mere
fact that the legislation companyld have been extended to some
other persons would number make the legislation
constitutionally void. on the other hand if the passage be
construed in the manner suggested by learned companynsel for the
appellant it would be destructive of number only the principle
of classification but also of the doctrine of equality. number do the american decisions lay down any such wide
proposition. in john a. watson v. state of maryland 1 the
constitutional validity of maryland companye of 1904 which made
it a misdemeanumber for any doctor to practise medicine without
registration was challenged. the said companye exempted from
its operation physicians who were then practising in that
state and had so practised prior to january 1 1898 and
could prove that within one year of the said date they had
treated at least twelve persons in their professional
capacity. the supreme companyrt of america affirmed the
validity of the provision. the reason for the
classification is stated at p. 989 thus
dealing as its followers do with the lives and health of
the people and requiring for its successful practice
general education and technical skill as well as good
character it is obviously one of those vocations where the
power of the state may be exerted to see that only properly
qualified persons shall undertake its responsible and
difficult duties. then the learned judge proceeded to state
such exceptions proceeds upon the theory that those who
have acceptably followed the profession in
1 1910 218 u.s. 173 54 l. ed. 987.
the companymunity for a period of years may be assumed to have
the qualifications which others are required to manifest as
a result of an examination before a board of medical
experts. the classification is therefore number sustained upon any
mathematical calculation but upon the circumstance that the
groups excluded were experienced doctors whereas those
included were number. in jeffrey manufacturing companypany v.
harry o. blagg 1 the supreme companyrt of america justified a
classification under ohio workmens companypensation act which
made a distinction between employers of shops with five or
more employees and employers of shops having a lesser number
of employees. employers of the former class had to pay
certain premiums for the purpose of establishing a fund to
provide for companypensation payable under the said act. if an
employer did number pay the premium he would be deprived of
certain defences in a suit filed by his employee for
compensation. it was companytended that this discrimination
offended the provisions of the 14th amendment of the
constitution. day j. sustained the classification on the
ground that the negligence of a fellow servant is more
likely to be a cause of injury in the large establishments
employing many in their service than in smaller ones. it
was also companyceded that the state legislature was number guilty
of arbitrary classification. it is therefore manifest
that the classification was number based upon numerical
strength but on the circumstance that the negligence of a
fellow servant is more likely to happen in the case of
larger establishments. the passage at p. 369 must be
understood in the light of the facts and the companycession made
in that case. the passage runs thus
having regard to local companyditions of
which they state legislature must be presumed to have
better knumberledge than we can have such regulation companyered
practically the whole field which needed it and embraced
all the establishments of the state of any size and that
those so small as to employ only four or less might be
regarded as a negligible
1 1915 235 u.s. 571 59 l. ed. 364.
quantity and need number be assessed to make up the guaranty
fund or companyered by the methods of companypensation which are
provided by this legislation. the passage presupposes the existence of a classification
and cannumber in my view support the argument that an
arbitrary classification shall be sustained on the ground
that the legislature in its wisdom companyered the field where
the protection in its view was needed. number the
observations of mckenna j. in st. louis iron mountain
southern railway companypany v. state of arkansas 1 advance
the case of the appellant. the learned judge says at p. 779
thus
we have recognized the impossibility of legislation being
all-comprehensive and that there may be practical groupings
of objects which will as a whole fairly present a class of
itself although there may be exceptions in which the evil
aimed at is deemed number so flagrant. in that case the state legislature made an exemption in
favour of railways less than 100 miles in length from the
operation of the statute forbidding railway companypanies with
yards or terminals in cities of the state to companyduct
switching operations across public crossings in cities of
the first or second class with a switching crew of less than
one engineer a fireman a foreman and three helpers. mckenna j. sustained its companystitutional validity holding
that the classification was number arbitrary. the observations
cited do number in any way detract from the well-established
doctrine of classification but only lay down that the
validity of a classification must be judged number on abstract
theories but on practical companysiderations. where the
legislature prohibited the use of shoddy new or old even
when sterilized in the manufacture of companyfortables for
beds the supreme companyrt of america held in weaver v. palmer
brothers company 2 that the prohibition was number reasonable. it was held that companystitutional guaranties may number be made
to yield to mere companyvenience. holmes j. in his dissenting
judgment observed at p. 659 thus
1 1916 240 u. s. 518 60 l. ed. 776. 2 1926 270 u. s. 402 70l. ed. 654.
a classification is number to be pronumbernced arbitrary because
it goes on practical grounds and attacks only those objects
that exhibit or foster an evil on a large scale. it is number
required to be mathematically precise and to embrace every
case that theoretically is capable of doing the same harm. even this dissenting opinion says numberhing more than that in
ascertaining the reasonableness of a classification it
shall be tested on practical grounds and number on theoretical
considerations. in west companyst hotel companypany v. parrish 1
a state statute authorized the fixing of reasonable minimum
wages for women and minumbers by state authority but did number
extend it to men. in that companytext hughes c. j. observed
at p. 713 thus
this companyrt has frequently held that the legislative
authority acting within its proper field is number bound to
extend its regulation to all cases which it might possibly
reach. these observations assume a valid classification and on that
basis state that a legislation is number bound to companyer all
which it might possibly reach. a neat summary of the american law on the subject is given
in the companystitution of the united states of america
prepared by the legislative reference service library of
congress 1952 edn. at p. 1146 thus
the legislature is free to recognize degrees of harm a
law which hits the evil where it is most felt will number be
overthrown because there are other instances to which it
might have been applied. the state may do what it can to
prevent what is deemed an evil and stop short of those cases
in which the harm to the few companycerned is thought less
important than the harm to the public that would ensue if
the rules laid down were made mathematically exact. exceptions of specified classes will number render the law
unconstitutional unless there is numberfair reason for the law
that would number equally require its extension to the excepted
classes. 1 1937 300 u. s. 379 81 l. ed. 703.
these observations do number out across the doctrine of
classification but only afford a practical basis to sustain
it. the prevalence of an evil in one field loudly calling
for urgent mitigation may distinguish it from other field
where the evil is incipient. so too the deleterious effect
of a law on the public if it is extended to the excluded
group marks it off from the included group. different
combination of facts with other. wise apparently indentical
groups may so accentuate the difference as to sustain a
classification. but if the argument of the learned companynsel
namely that the legislature can in its discretion exclude
some and include others from the operation of the act in
spite of their identical characteristics on the ground only
of numbers be accepted it will be destructive of the
doctrine of equality itself. therefore the said and similar decisions do number justify
classification on the basis of numbers or enable the
legislature to include the many in and exclude the few from
the operation of law without there being an intelligible
differentia between them. number do they support the broad
contention that a legislature in its absolute discretion may
exclude some instances of identical characteristics from an
act on alleged practical companysiderations. even to exclude
one arbitrarily out of a class is to offend against art. 14
of the companystitution. let us number apply the said principles to the facts of the
present case. assuming for a moment that the ratio between
the accused in the companytext of companyfessions is 1000 in custody
and 5 out of custody how companyld that be companyceivably an
intelligible ground for classification ? assuming again that
the legislature thought such an exemption is unwarranted-
that such cases would number arise at all and need number be
provided for companyld that be a reasonable assumption having
regard to the historical background of s. 27 of the evidence
act and factual existence of such instances disclosed by
decisions cited supra ? as i have already stated that such
an exemption is an unwarranted flight into the realms of
imagination in the teeth of expressed caution administered
by das c. j. in shri ram
krishna dalmias case 1 and by brewer j. in gulf
colorada and santa fe rly. company v. ellis 2 . re. c number can i find any intelligible differentia in the
caution alleged to be implied by accused being taken into
custody. the argument is-that under s. 163 of the companye of
criminal procedure numberpolice-officer or other person shall
prevent by any caution or otherwise any person from making
in the companyrse of any investigation under this chapter any
statement which he may be disposed to make of his own free
will and as an accused is allowed to make any statement he
chooses without his being placed on guard by timely caution
numberstatement made by him is permitted to be proved whereas
by the accused being taken into custody the argument
proceeds by the said act itself the accused gets sufficient
warning that his statement may be used in evidence and that
this difference affords a sufficient basis for the
classification. i am number satisfied that taking into custody
amounts to a statutory or implied caution. if that be the
basis for the distinction there is numberjustification that an
accused once taken into custody but later released on bail
should number be brought in within the meaning of s. 27 of the
indian evidence act. re. d the fourth item of differentia furnishes an
ironical companymentary on the argument advanced. the
contention is that an accused in custody needs protection in
the matter of his companyfession and therefore a companydition is
imposed before the companyfession is made admissible. there is
an obvious fallacy underlying this argument. the
classification is made between accused number in custody making
a companyfession and accused in custody making a companyfession to a
police-officer the former is inadmissible and the latter is
admissible subject to a companydition. the point raised is why
should there be this discrimination between these two
categories of accused ? it is numberanswer to this question to
point out that in the case of an accused in custody a
condition has been imposed on the admissibility of his
confession. the companydition imposed may be to some extent
affording a guarantee for the truth
1 1959 s.c.r. 279. 2 1897 165 u. s. 150 41 ed. 666.
of the statement but it does number efface the clear dis-
tinction made between the same class of companyfessions. the
vice lies number in the companydition imposed but in the
distinction made between these two in the matter of
admissibility of a companyfession. the distinction can be wiped
out only when companyfessions made by all accused are made
admissible subject to the protective companydition imposed. number only the alleged differentia are number intelligible or
germane to the object sought to be achieved the basis for
the distinction is also extremely arbitrary. there is no
acceptable reason why a companyfession made by an accused in
custody to a police-officer is to be admitted when that made
by an accused number in custody has to be rejected. the
condition imposed in the case of the former may to some
extent soften the rigour of the rule but it is irrelevant
in companysidering the question of reasonableness of the
classification. rankin j. in durlav namasudra v. emperor
1 in a strongly worded passage criticised the anumberaly
underlying s. 27 thus at p. 1045
in a case like the present where the
confession was made to the police if the man was at liberty
at the time he was speaking what he said should number be
admitted in evidence even though something was discovered as
a result of it it cannumber be admitted in
evidence because the man was number in custody which of
course is thoroughly absurd. there might be reason in
saying that if a man is in custody what he may have said
cannumber be admitted but there can be numbere at all in saying
that it is inadmissible in evidence against him because he
is number in custody. in the present case the self-same paradox is sought to be
supported as affording a reasonable basis for the
classification. the only solution is for the legislature to amend the
section suitably and number for this companyrt to discover some
imaginary ground and sustain the classification. 1
therefore hold that s. 27 of the indian evidence act is
void as violative of art. 14 of the companystitution. 1 1932 59 cal. 1040
if so the question is whether there is any scope for
interference with the finding of the high companyrt. the high
court companysidered the entire evidence and found the following
circumstances to have been proved in the case
a that in the evening of june 18 1958 there was an
altercation between sukhdei and deoman accused over the
proposed transfer of property in anandadih in the presence
of shobh nath p. w. 5 and mahesh p. w. 7 and that in
the companyrse of this altercation deoman slapped her and
threatened that he would smash her mouth
b that at about dawn on june 19 1958 the accused was
seen by khusai p. w. 8 hurrying to wards a tank and
shortly afterwards was seen by mata dihal p. w. 11
actually bathing in that tank before it was fully light
c that the accused absconded immediately afterwards and
was number to be found at anandadih on june 19 1958 and
d that on june 21 1958 the accused in the presence of
the investigating officer p. w. 14 shobh nath p. w. 5
and raj bahadur singh p. w. 6 stated that he companyld hand
over the gandasa which he had thrown into a tank that
he was then taken to that tank and in the presence of the
same witnesses waded in and fetched the gandasa ex. i
out of the water and that this gandasa was found by the
chemical examiner and serologist to be stained with human
blood . the high companyrt held that the said circumstances are by no
means sufficient to prove the guilt of the accused-appellant
beyond reasonable doubt. on that finding the high companyrt
gave the benefit of doubt to the accused and acquitted him
of the offence. the finding is purely one of fact and there
are numberexceptional circumstances in the case to disturb the
same. in the result the appeal fails and is dismissed. hidayatullah j.-the facts of the case have been stated in
full by shah j. in the judgment which he has delivered
and which i had the advantage of
reading. i have also had the advantage of reading the
judgment of subba rao j. i respectfully agree generally
with the companyclusions and the reasons therefor of shah j.
i wish however to make a few observations. section 27 of the indian evidence act is in the chapter on
admissions and forms part of a group of sections which are
numbered 24 to 30 and these sections deal with companyfessions
of persons accused of an offence. they have to be read with
ss. 46 and 161164 of the companye of criminal procedure. section 24 makes a companyfession irrelevant if the making of it
appears to the companyrt to have been caused by inducement
threat or promise having reference to the charge against the
accused person from a person in authority and by which the
accused person hopes that he would gain some advantage or
avoid some evil of a temporal nature in reference to the
proceedings against him. section 25 makes a companyfession to a
police officer inadmissible against a person accused of any
offence. section 26 says that numberconfession made by a
person whilst he is in the custody of a police officer shall
be proved unless it be made in the immediate presence of a
magistrate. section 27 then provides
provided that when any fact is deposed to as discovered
in companysequence of information received from a person accused
of any offence in the custody of a police officer so much
of such information whether it amounts to a companyfession or
number as relates distinctly to the fact thereby discovered
may be proved. section 161 of the companye of criminal procedure empowers a
police officer of stated rank to examine orally any person
supposed to be acquainted with the facts and circumstances
of the case. such person is bound to answer all questions
relating to the case but number questions which would have a
tendency to expose him to a criminal charge or to a penalty
or forfeiture. the police officer may make a written record
of the statement. section 163 of the companye then lays down
the rule that numberpolice officer or other person in
authority shall offer or make or cause to be offered or
made any inducement threat or promise as is mentioned in
the indian evidence act s. 24 and further that numberpolice
officer or other person shall prevent by any caution or
otherwise any person from making in the companyrse of any
investigation any statement which he may be disposed to make
of his own free will. section 162 of the companye then makes
statements reduced into writing inadmissible for any purpose
except those indicated but leaves the door open for the
operation of s. 27 of the indian evidence act. section 164
confers the power to record companyfessions on magistrates of
stated rank during investigation or at any time afterwards
before the companymencement of the enquiry or trial. such
confessions are to be recorded after due caution to the
person making the companyfession and only if there is reason to
believe that they are voluntary. section 46 of the companye
provides that in making an arrest the police officer or
other person making the same shall actually touch or companyfine
the body of the person to be arrested unless there be a
submission to the custody by word or action. when an offence is companymitted and investigation starts the
police have two objects in view. the first is the
collection of information and the second is the finding of
the offender. in this process the police question a number
of persons some of whom may be only witnesses and some who
may later figure as the person or persons charged. while
questioning such persons the police may number caution them
and the police must leave the persons free to make whatever
statements they wish to make. there are two checks at this
stage. what the witnesses or the suspects say is number be
used at the trial and a person cannumber be companypelled to
answer a question which answer may incriminate him. it is
to be numbericed that at that stage though the police may have
suspicion against the offender there is numberdifference
between him and other witnesses who are questioned. those
who turn out to be witnesses and number accused are expected to
give evidence at the trial and their former statements are
number evidence. in so far as those ultimately charged
are companycerned they cannumber be witnesses save exceptionally
and their statements are barred under s. 162 of the companye and
their companyfessions under s. 24 of the indian evidence act. their companyfessions are only relevant and admissible if they
are recorded as laid down in s. 164 of the companye of criminal
procedure after due caution by the magistrate and it is made
clear that they are voluntary. these rules are based upon
the maxim nemo tenetur prodere seipsum numberone should be
compelled to incriminate himself in an address to police
constables on their duties hawkins j. later lord
brampton observed
neither judge magistrate number juryman can interrogate an
accused person or require him to answer the questions
tending to incriminate himself. much less then ought a
constable to do so whose duty as regards that person is
simply to arrest and detain him in safe custody. in english law the statement of an accused person can be
tendered in evidence provided he has been cautioned and the
exact words of the accused are deposed to. says lord
brampton
there is however numberobjection to a companystable listening
to any mere voluntary statement which a prisoner desires to
make and repeating such statement in evidence number is there
any objection to his repeating in evidence any companyversation
he may have heard between the prisoner and any other person. but he ought number by anything he says or does to invite or
encourage an accused person to make any statement without
first cautioning him that he is number bound to say anything
tending to criminate himself and that anything he says may
be used against him. perhaps the best maxim with respect to
an accused person is keep your ears and eyes open and your
mouth shut . see sir howard vincents police companye
in ibrahim v. emperor 1 lord sumner gave the history of
rules of companymon law relating to companyfessions and pointed out
that they were as old as lord hale . lord sumner observed
that in reg. v. thompson 2
1 1914 a.c. 599. 2 1893 2 q.b. 12.
and earlier in the king v jane warrickshall 1 it was ruled
to quote from the second case
a companyfession forced from the mind by the flattery of hope
or by the torture of fear companyes in so questionable a shape
when it is to be companysidered as the evidence of guilt that
numbercredit ought to be given to it. lord sumner added
it is number that the law presumes such statements to be
untrue but from the danger of receiving such evidence judges
have thought it better to reject it for the due
administration of justice reg. v. baldry 2 . accordingly
when hope or fear were number in question such statements were
long regularly admitted as relevant though with some
reluctance and subject to strong warnings as to their
weight. even so in the judgment referred to by lord sumner parke
b. bewailed that the rule had been carried too far out of
too much tenderness towards prisoners in this matter and
observed
i companyfess that i cannumber look at the decisions without some
shame when i companysider what objections have prevailed to
prevent the reception of companyfessions in evidence justice and
commonsense have too frequently been sacrificed at the
shrine of mercy. whatever the views of parke b. lord sumner points out that
when judges excluded such evidence it was rather
explained by their observations on the duties of policemen
than justified by their reliance on rules of law. lord sumner has then traced the history of the law in
subsequent years. in 1905 channel j. in beg v. knight
and thavre 3 referred to the position of an accused in
custody thus
when he has taken any one into custody he ought number to
question the prisoner i am number aware of any distinct rule of
evidence that if such improper questions are asked the
answers to them are inadmissible but there is clear
authority for saying that the
1 1783 1 leach 263 168 e.r. 234. 2 1852 5 company c.c. 523. 3 1905 20 company c.c. 711
judge at the trial may in his discretion refuse to allow the
answers to be given in evidence. five years later the same learned judge in rex v. booth and
jones 1 observed
the moment you have decided to charge him and practically
got him into custody then inasmuch as a judge cannumber ask a
question or a magistrate it is ridiculous to suppose that a
policeman can. but there is numberactual authority yet that
if a policeman does ask a question it is inadmissible what
happens is that the judge says it is number advisable to press
the matter. it is to be numbericed that lord sumner numbered the difference of
approach to the question by different judges and observed
that
logically these objections all go to the weight and number to
the admissibility of the evidence. what a person having
knumberledge about the matter in issue says of it is itself
relevant to the issue as evidence against him. that he made
the statement under circumstances of hope fear interest or
otherwise strictly goes only to its weight even the
rule which excludes evidence of statements made by a
prisoner when they are induced by hope in authority is a
rule of policy. the judicial companymittee did number express any opinion as to
what the law should be. the state of english law in 1861
when these rules became a part of the indian law in a
statutory form was thus that the police companyld question any
person including a suspect. the statements of persons who
turned out to be mere witnesses were entirely inadmissible
they being supposed to say what they companyld on oath in
court. statements of suspects after caution were admissible
but number before the caution was administered or they were
taken in custody but companyfessions were as a rule excluded
if they were induced by hope fear threat etc. when the indian law was enacted in 1861 it is companymonplace
that the statute was drafted in england. two departures
were made and they were 1 that numberstatement made to a
police officer by any
1 1910 5 cr. app. rep. 177.
person was provable at the trial which included the accused
person and 2 that numbercaution was to be given to a person
making a statement. in so far as the accused was companycerned he was protected
from his own folly in companyfessing to a charge both after and
before his custody unless he respectively did so in the
immediate presence of a magistrate or his companyfession was
recorded by a magistrate. in either event the companyfession
had to be voluntary and free from taint of threat promise
fear etc. the law was framed to protect a suspect against
too much garrulity before he knumber that he was in danger
which sense would dawn on him when arrested and yet left the
door open to voluntary statements which might clear him if
made but which might number be made if a caution was
administered. without the caution an innumberent suspect is
number in a position to knumber his danger while a person
arrested knumbers his position only too well. without the
caution the line of distinction ceased and the law very
sensibly left out the statements altogether. thus before
arrest all suspects whether rightly suspected or wrongly
were on par. neither the statements of the one number of the
other were provable and there was numbercaution at all. the english law then was taken as a model for accused in
custody. section 27 which is framed as an exception has
rightly been hold as an exception to ss. 24-26 and number only
to s. 26. the words of the section were taken bodily from
the king v. lockhart where it was said
but it should seem that so much of the companyfession as
relates strictly to the fact discovered by it may be given
in evidence for the reason of rejecting extorted
confessions is the apprehension that the prisoner may have
been thereby induced to say what is false but the fact
discovered shews that so much of the companyfession as
immediately relates to it is true. that case followed immediately after warrickshalls case
2 and summarised the law laid down in the earlier case. the accused in that case had made a
1 1785 1 leach 386 168 e.r. 295 and footnumbere to 1783
leach 263. 2 1783 1 leach 263 168 e. r. 234.
confession which was number receivable as it was due to
promise of favour. as a result of the companyfession the goods
stolen were found companycealed in a mattress. it was companytended
that the evidence of the finding of the articles should number
be admitted. nares j. with mr. baron eyre observed
it is a mistaken numberion that the evidence of companyfessions
and facts which have been obtained from prisoners by
promises or threats is to be rejected from a regard to
public faith numbersuch rule ever prevailed. the idea is
numberel in theory and would be as dangerous in practice as it
is repugnant to the general principles of criminal law. companyfessions are received in evidence or rejected as
inadmissible under a companysideration whether they are or are
number intitled to credit this principle respecting
confessions has numberapplication whatever as to the admission
or rejection of facts whether the knumberledge of them be
obtained in companysequence of an extorted companyfession or
whether it arises from any other source for a fact if it
exists at all must exist invariably in the same manner
whether the companyfession from which it is derived be in other
respects true or false. anumberher case is numbered in the footnumbere in the english report
series. in february session 1784 dorothy mosey was tried
for shop-lifting and a companyfession had been made by her and
goods found in companysequence of it as in the above case. buller j. present mr. baron perryn who agreed said
a prisoner was tried before me buller j. where the
evidence was just as it is here. i stopped all the
witnesses when they came to the companyfession. the prisoner
was acquitted. there were two learned judges on the bench
who told me that although what the prisoner said was number
evidence yet that any facts arising afterwards may be given
in evidence though they were done in companysequence of the
confession. this point though it did number affect the
prisoner at the bar was stated to all the judges and the
line drawn was that although companyfessions improperly
obtained cannumber be received in evidence yet that the acts
done after-
wards may be given in evidence though they were done in
consequence of the companyfession. where however numberfact was discovered the statement was
number held admissible. see rex v. richard griffin 1 and rex
francis jones 2 . in rex v. david jenkins 1 the prisoner was company victed
before bayley j. present park j. of stealing certain
gowns and other articles. he was induced by a promise from
the prosecutor to companyfess his guilt and after that
confession he carried the officer to a particular house
but the property was number found. the evidence of the
confession was number received the evidence of his carrying
the officer to the house as abovementioned was. but bayley
j. referred the point for companysideration of the judges. the
judges were of opinion that
the evidence was number admissible and the companyviction was
therefore wrong. the companyfession was excluded being made
under the influence of a promise it companyld number be relied
upon and the acts of the prisoner under the same
influence number being companyfirmed by the finding of the
property were open to the same objection. the influence
which might produce a groundless companyfession might also
produce a groundless companyduct. it would appear from this that s. 27 of the indian evidence
act has been taken bodily from the english law. in both the
laws there is greater solicitude for a person who makes a
statement at a stage when the danger in which he stands has
number been brought home to him than for one who knumbers of the
danger. in english law the caution gives him the necessary
warning and in india the fact of his being in custody takes
the place of caution which is number to be given. there is
thus a clear distinction made between a person number accused
of an offence number in the custody of a police officer and one
who is. it remains to point out that in 1912 the judges of the
kings bench division framed rules for the guidance of the
police. these rules though they had no
1 1809 russ. ry. 151 168 e.r. 732. 2 1809 russ. ry. 152. 3 1822 russ. ry 492 168 e.r. 914.
force of law laid down the procedure to be followed. at
first four rules were framed but later five more were
added. they are reproduced in halsburys laws of england
3rd edn. vol. 10 p. 470 para. 865. these rules also
clearly divide persons suspected of crime into those who are
in police custody and those who are number. it is assumed that
a person in the former category knumbers his danger while the
person in the latter may number. the law is tender towards the
person who may number knumber of his danger because in his case
there is less chance of fairplay than in the case of one who
has been warned. it is to be numbericed that in the royal companymission on police
powers and procedure 1928-29 cmd 3297 numberhing is said to
show that there is anything invidious in making statements
leading to the discovery of a relevant fact admissible in
evidence when such statements are made by persons in
custody. the suggestions and recommendations of the
commission are only designed to protect questioning of
persons number yet taken in custody or taken in custody on a
minumber charge and the use of statements obtained in those
circumstances. the law has thus made a classification of accused persons
into two 1 those who have the danger brought home to them
by detention on a charge and 2 those who are yet free. in the former category are also those persons who surrender
to the custody by words or action. the protection given to
these two classes is different. in the case of persons
belonging to the second category the law has ruled that
their statements are number admissible and in the case of the
first category only that portion of the statement is
admissible as is guaranteed by the discovery of a relevant
fact unknumbern before the statement to the investigating
authority. that statement may even be companyfessional in
nature as when the person in custody says i pushed him
down such and such mineshaft and the body of the victim is
found as a result and it can be proved that his death was
due to injuries received by a fall down the mineshaft. it is argued that there is denial of equal protection
of the law because if the statement were made before
custody began it would be inadmissible. of companyrse the
making of the statement as also the stage at which it is
made depends upon the person making it. the law is
concerned in seeing fairplay and this is achieved by
insisting that an unguarded statement should number be
receivable. the need for caution is there and this caution
is very forcefully brought home to an accused when he is
accused of an offence and is in the custody of the police. there is thus a classification which is reasonable as well
as intelligible and it subserves a purpose recognised number
for over two centuries. when such an old and time-worn rule
is challenged by modern numberions the basis of the rule must
be found. when this is done as i have attempted to do
there is numberdoubt left that the rule is for advancement of
justice with protection both to a suspect number yet arrested
and to an accused in custody. there is ample protection to
an accused because only that portion of the statement is
made admissible against him which has resulted in the
discovery of a material fact otherwise unknumbern to the
police. i do number therefore regard this as evidence of
unequal treatment. before leaving the subject i may point out that the
recommendation of the royal companymission was
xlviii a rigid instruction should be issued to the
police that numberquestioning of a prisoner or a person in
custody about any crime or offence with which he is or
may be charged should be permitted. this does number exclude
questions to remove elementary and obvious ambiguities in
voluntary statements under number 7 of the judges rules but
the prohibition should companyer all persons who although number
in custody have been charged and are out on bail while
awaiting trial. this is a matter for the legislature to companysider. in view of what i have said above and the reasons given by
shah j. i agree that the appeal be allowed as proposed by
him. | 1 | test | 1960_99.txt | 1 |
civil appellate jurisdiction civil appeals number. 1659 to
1662 of 1967.
appeals by certificate from the judgment and order dated
january 31 1964 of the andhra pradesh high companyrt at
hyderabad in writ petition number. 337/63 746/62 735/62 and
807/62 respectively. ram reddy and a. v. v. nair for the appellant. c. chagla h. k. puri and niranjana shah for the res-
pondents in c. a. number 1659 respondents 1 to 10 12 to 14
16 and 19 to 29 in c.a. number 1660 respondent number 1 in
a. number 1661 and respondents number. 1 to 5 in c.a. number
1662 . the judgment of the companyrt was delivered by
grover j.-the sole question which has to be decided in
these appeals by certificate from a judgment of the andhra
pradesh high companyrt is the meaning of the word independent
in s. 9 of the minimum wages act 1948 hereinafter called
the act. the act was enacted to provide for fixing the minimum rates
of wages in certain employments. section 2 gives the
definition of various expressions. clauses e h and i
give the meaning of the words employer wages and
employee respectively. section 3 provides for fixing of
the minimum rates of wages by the appropriate government and
their review at certain intervals. section 5 gives the
procedure for fixing and revising minimum wages. section 5
reads
s. 5 1 in fixing minimum rates of wages in
respect of any scheduled employment for the
first time under this act or in revising
minimum rates of wages so fixed the
appropriate government shall either-
a appoint as many companymittees and sub-
committees as it companysiders necessary to hold
enquiries and advise it in respect of such
fixation or revision as the case may be or
b by numberification in the official gazette
publish its proposals for the information of
persons likely to be affected thereby and
specify a date number less than two months from
the date of the numberification on which the
proposals will be taken into companysiders
after companysidering the advice of the
committee or companymittees appointed under clause
a of sub-section
1 or as the case may be all representations
received by it before the date specified in
the numberification under clause b of that sub-
section the appropriate government shall by
numberification in the official gazette fix or
as the case may be revise the minimum rates
of wages in respect of each scheduled
employment and unless such numberification
otherwise provides it shall companye into force
on the expiry of three months from the date of
its issue
provided
section 9 relates to companyposition of companymittees etc. and is
in these terms
s.9.each of the companymittees sub-committees
and the advisory board shall companysist of
persons to be numberinated by the appropriate
government representing employers and
employees in the scheduled employments who
shall be equal in number and independent
persons number exceeding one-third of its total
number of members one of such independent
persons shall be appointed the chairman by the
appropriate government. the government order which was challenged related to the
revision of minimum wages in the bidi industry. it was
based on the recommendation of a companymittee companysisting of six
members two of whom were chief inspector of factories
hyderabad and deputy chief inspector of factories
hyderabad the former being the chairman. these two
officers were to be on the companymittees from among the
category of independent persons mentioned in s. 9. the whole
controversy has centered on the question whether the
aforesaid two officers companyld be regarded as independent per-
sons. there are a number of decisions of the high companyrts. in majority of them namely jaswant rai beri others v.
state of punjab anumberher 1 d. m. s. rao others v. the
state of kerala anumberher 2 bengal motion pictures
employees union calcutta v. kohinumberr pictures private limited
others 3 ramkrishna ramnath nagpur anumberher v. the
state of maharashtra anumberher 4 chandrabhava boarding
lodging and others v. state of mysore. 5 and p. gangadharan
pillai v. state of kerala others 6 has been held that
the mere fact that a person happens to be government
servant or that he is an officer he does number cease to be an
independent person within the meaning of s. 9. the only two
decisions in which a companytrary view has been taken are
narottamdas harjivandas v. p. v. gowarikar inspector
a.i.r. 1958 punj. 425.
a.i.r. 1964 cal. 519.
a.i.r. 1968 mys. 156.
a.i.r. 1963 kerala 115.
a.t.r. 1964 bom. 51.
a.i.r. 1968 kerala 218. 16--l761sup.c.i./73
minimum wages 1 and kohinumberr pictures private limited v.
state of west bengal others 2 the latter is a judgment
of the learned single judge of the calcutta high companyrt. it
may be mentioned that in the judgment under appeal the
andhra pradesh high companyrt has also taken the same view as
the madhya pradesh companyrt. the reasoning of bishan narain j in the punjab case is
quite simple. the learned judge companysidered that in the
context of s. 9 an independent person means a person who is
neither an employer number an employee in the employment for
which minimum wages are to be fixed the presence of
independent persons is necessary to safeguard the interests
of those whose requirements are met by the trade companycerned. in a welfare state according to him it is the business of
the government to create companyditions wherein private
employers can carry on their trade profitably as long as the
workmen are number exploited. in such circumstances the
appointment of a labour companymissioner who is companyversant with
the employment companyditions cannumber be objected to on the
ground that he was number an independent person. in the first
kerala case c. a vaidialingam j as he then was gave some
additional reasons for supporting the view of bishan narain
he referred to s. 2 i of the industrial disputes act
1947 for illustrating that a person shall be deemed to be
independent for the purpose of his appointment as chairman
or other members of a board companyrt or tribunal if he was
unconnected with the industrial dispute referred to such
board companyrt or tribunal or with any industry directly. effected by such dispute. this is what the learned judge
observed with reference to the provisions of s. 9
when-it speaks of persons to be numberinated by
the government to the companymittee representing
employers and employees in the scheduled
employments and also. of numberinating an
independent person in my view the object
of the enactment is that the independent
person should be who has numberhing to do with
the employers or employees in the scheduled
employment in question. it may that under
particular circumstances when an industry in
which the state government as an employer may
also be vitally interested and in which case
it can be companysidered to be an employer it may
number be proper to numberinate an official to the
committee treating him as an independent
member. a division bench of the calcutta high companyrt companysisting of
bose c. j. and g. k. mitter j. as he then was in bengal
motion pictures employees union v. kohinumberr pictures p. limited
3 referred
a.i.r. 1961 m.p. 182.
a.i.r. 1964 cal. 519. 2 1961 2 l.l.j. 741.
to the legislative policy underlying the enactment of the
act. what is aimed at is the statutory fixation of minimum
wages with a view to obviating the chances of exploitation
of labour. such being the main object it was natural to
expect that the government would seek the assistance of
persons who were well companyversant with the companyditions of
labour industrial companypetition profits from the industry and
various other relevant factors which are to be companysidered in
fixing the minimum wages. it companyld hardly be doubted that
persons like the labour companymissioner or the deputy labour
commissioner are most suitable persons to be companysulted for
the purpose. the other reason given in the calcutta case
was similar to the one which prevailed with bishan narain
j. in the punjab case. in the bombay case the division
bench referred to certain rules framed under s. 30 of the
act by the government of bombay. according to rule 4
provision was made for terms of office of members of the
board and a distinction was made in subrules 2 and 3 between
the number-official member and the official member of the
board. from the scheme of the rules it was inferred that
even government officials were companytemplated to fall within
the category of independent persons. it is unnecessary to
refer to the other decisions which favour the majority view. in the madhya pradesh case p. v. dixit c.j. delivering the
judgment of the bench said that the expression independent
persons did riot mean persons who were independent only of
employers and employees in the scheduled employment and in-
cluded officials. the ordinary companynumberation of the word
independent person it was pointed out is of a person who
is number dependent on any body authority or organisation and
who is able to form his own opinion without any companytrol or
guidance of any outside agency. it appears that in this
case the learned judges were influenced by the companysideration
that the state is actively interested in the wage earners
and in the matter of fixation of minimum wages. that
precluded government officials from falling within the class
of independent persons provided for by s. 9. in kohinumberr
pictures case 1 a learned single judge while appreciating
that the advisory companymittees companystituted under 5 read with
s. 9 of the act have a purely advisory function took the
view that the appropriate government in fixing the minimum
rates of wages was number at all a disinterested person. he
also took-into companysideration the interest which the
government may have in fixing the minimum wages. according
to him the fixation of minimum wages is an operation
compelling the employer to make a payment whether he wishes
it or number and in most cases companytrary to his wishes. three
parties are involved in such companypulsory fixation namely
the government the employer and the employed. if
1 1961 2.l.l.j. 741.
the advisory companymittee is really to companysist of independent
persons categories. they should be independent of all the
three
mr. chagla for the respondents has relied a great deal on
the dictionary meanings of the word independent as given
in shorter oxford english dictionary. one of the principal
meaning given is number depending upon the authority of
anumberher number in position of subordination number subject to
external companytrol or rule. according to mr. chagla a
government official cannumber be regarded as independent
because he is to depend upon the authority of the government
and is in position of subordination and is subject to
external companytrol. it has been strenuously urged that the
whole object of having an advisory companymittee is to get an
impartial opinion or advice in the matter of fixing of
minimum wages. the companymittee has to companysist of
representatives of employers and the employees in the
scheduled employment who have to be equal in number. the
presence of independent persons number exceeding one third of
the total number of members is necessary to ensure that a
proper balance is maintained between the view of the
representatives of the employers and the employees
respectively. if a government official and in particular
one associated either with labour or factories in his
official capacity is brought into the companymittee he is. likely to be biased in his views for various reasons. he
may-knumber the policy of the government or he may himself have
participated in the formulation of that policy. he may have
certain predilection because of special knumberledge obtained
by him while serving in a department which is companynected. with labour or industry. all these matters would divest him
of the character of an independent person. in our judgment the view which has prevailed with the majo-
rity of the high companyrts must be sustained. the companymittee or
the advisory board can only tender advise which is number
binding on the government while fixing the minimum wages or
revising the same as the case may be. of companyrse the
government is expected particularly in the present
democratic set up to take that advice seriously into
consideration and act on it but it is number bound to do so. the language of s. 9 does number companytain any indication whatso-
ever that persons in the employment of the government would
be excluded from the category of independent persons. these
words have essentially been employed in companytradistiction to
representatives of employers and employees. in other words
apart from the representatives of employers and employees
there should be persons who should be independent of them. it does number follow that persons in theservice or employ of
the government were meant to be excluded and they cannumber be
regarded as independent persons vis-a-vis therepresentatives
of the employers and employees. apart from this the
presence of high government officiais
who may have actual working knumberledge about the problems of
employers and employees can afford a good deal of guidance
and assistance in formulating the advice which is to be
tendered under s. 9 to the appropriate government. it may
be that in certain circumstances such persons who are in the
service of the government may cease to have an independent
character if the question arises of fixation of minimum
wages in a scheduled employment in which the appropriate
government is directly interested. it would therefore
depend upon the facts of each particular case whether the
persons who have been appointed from out of the class of
independent persons can be regarded as independent or number. but the mere fact that they happen to be government
officials or government servants will number divest them of
the character of independent persons. we are number impressed
with the reasoning adopted that a government official will
have a bias or that he may favour the policy which the
appropriate government may be inclined to adopt because when
he is a member of an advisory companymittee or board he is
expected to give an impartial and independent advice and number
merely carry out what the government may be inclinded to do. government officials are responsible persons and it cannumber
be said that they are number capable of taking a detached and
impartial view. | 1 | test | 1973_72.txt | 1 |
civil appellate jurisdiction civil appeal number 3844 of
1983.
appeal by special leave from the judgment and order
dated the 25th july 1980 of the delhi high companyrt in l.p.a. number 89 of 1976.
k. gupta for the appellant. b. pai s.n. bhandari and ashok grover for
respondent. number 3.
n. poddar for respondent number 1.
the judgment of the companyrt was delivered by
chinnappa reddy j. it was just the other day that we
were bemoaning the unbecoming devices adopted by certain
employers to avoid decision of industrial disputes on
merits. we numbericed how they would raise various preliminary
objections invite decision on those objections in the first
instance carry the matter to the high companyrt under art. 226
of the companystitution and to this companyrt under art. 136 of the
constitution and delay a decision of the real dispute for
years sometimes for over a decade. industrial peace one
presumes hangs in the balance in the meanwhile. we have number
before us a case where a dispute originating in 1969 and
referred for adjudication by the government to the labour
court in 1970 is still at the stage of decision on a
preliminary objection. there was a time when it was thought
prudent and wise policy to decide preliminary issues first. but the time appears to have arrived for a reversal of that
policy. we think it is better that tribunals particularly
those entrusted with the task of adjudicating labour
disputes where delay may lead to misery and jeopardise
industrial peace should decide all issues in dispute at the
same time without trying some of them as preliminary issues. number should high companyrts in the exercise of their jurisdiction
under art. 226 of the companystitution stop proceedings before a
tribunal so that a preliminary issue may be decided by them. neither the jurisdiction of the high companyrt under art. 226 of
the companystitution number the jurisdiction of this companyrt under
art. 136 may be allowed to be exploited by those who can
well afford to wait to the detriment of those who can ill
afford to wait by dragging the latter from companyrt to companyrt
for adjudication of peripheral issues avoiding decision on
issues more vital to them. art. 226 and art. 136 are number
meant to be used to break the resistance of workmen in this
fashion. tribunals and companyrts who are requested to decide
preliminary questions must therefore ask themselves whether
such threshold part-adjudication is really necessary and
whether it will number lead to other woeful companysequences. after
all tribunals like industrial tribunals are companystituted to
decide expeditiously special kinds of disputes and their
jurisdiction to so decide is number to be stifled by all manner
of preliminary objections journeyings up and down. it is
also worth while remembering that the nature of the
jurisdiction under art. 226 is supervisory and number appellate
while that under art. 136 is primarily supervisory but the
court may exercise all necessary appellate powers to do
substantial justice. in the exercise of such jurisdiction
neither the high companyrt number this companyrt is required to be too
astute to interfere with the exercise of jurisdiction by
special tribunals at interlocutory stages and on preliminary
issues. having sermonised this much we may number proceed to
state the facts which provoked the sermon. the appellant
p. maheshwari was an employee of toshniwal brothers pvt. limited when his services were terminated with effect from
28th july 1969. he raised an industrial dispute and on 3rd
july 1970 the lt. governumber of delhi referred the dispute for
adjudication to the additional labour companyrt delhi under
sections 10 1 c and 12 5 of the industrial disputes act. the dispute referred for adjudication to the labour companyrt
was whether the termination of services of shri d.p. maheshwari is illegal and or unjustified and if so to what
relief is he entitled and what directions are necessary in
this respect ? the management straightaway questioned the
reference by filing writ petition number 159 of 1972 in the
delhi high companyrt. the writ petition was dismissed on 22nd
may 1972. thereafter the management raised a preliminary
contention before the labour companyrt that d.p. maheshwari was
number a workman within the meaning of section 2 s of the
industrial disputes act and the reference was therefore
incompetent. the labour companyrt tried the question whether
p. maheshwari was a workman as defined in section 2 s of
the industrial disputes act as a preliminary issue. both
parties adduced oral and documentary evidence. after
referring to the evidence of the employees witnesses the
labour companyrt said thus according to the evidence of the
claimants witnesses the claimant was employed mainly for
clerical duties and he did discharge the same. the labour
court then referred to the evidence of the witnesses
examined by the management and said thus the said evidence
falls far short of proving that the claimant was in fact
discharging mainly administrative of supervisory duties. the labour companyrt then proceeded to refer to the documents
produced by the management and observed thus the documents
filed by the respondent do number go to show that the real
nature of the duties discharged by the claimant was
supervisory or administrative in nature. the labour companyrt
next referred to what it companysidered to be an admission on
the part of the management who had classified all their
employees into three separate classes a b and c class-a
described as managerial class-b described as supervisory
and class-c described as other staff. the name of d.p. maheshwari was shown in class-c. after reviewing the entire
evidence the labour companyrt finally recorded the following
finding
from the above discussion it is clear that the
claimants evidence shows that he was doing mainly
clerical work of maintaining certain registers
preparing drafts and seeking instructions from the
superiors and respondents lawyers during the period of
his services though designated accounts officer or
officer in special duty or store purchase officer
as a result in my opinion it has to be held that the
nature of the main duties being discharged by the
claimant was clerical and number supervisory or
administrative despite his designation as officer. accordingly he has to be held to be a workman under
section 2 s of the industrial dispute act. the management was dissatisfied with the decision of
the labour companyrt on the preliminary issue. so they invoked
the high companyrts extra-ordinary jurisdiction under art. 226
of the companystitution. a learned single judge of the high
court by his judgment dated 12th july 1976 allowed the writ
petition and quashed the order of the labour companyrt and the
reference made by the government. a division bench of the
high companyrt affirmed the decision of the single judge on 25th
july 1980. the matter is number before us at the instance of
the workman who obtained special leave to appeal under art. 136 on 4th april 1983. the services of the workman were
terminated on 28th july 1969. a year later the dispute was
referred to the labour companyrt for adjudication. thirteen
years thereafter the matter is still at the stage of
decision on a preliminary question. in our view further
comment is needless. shri a.k. gupta the learned companynsel for the appellant
submitted that the high companyrt literally exercised appellate
powers and recorded findings of fact differing from those
recorded by the labour companyrt and this he companyplained had
been done by an unfair reading of the order of the labour
court and without the high companyrt itself companysidering a single
item of evidence or document. we are afraid there is
considerable force in shri guptas criticism. curiously enumbergh the learned single judge of the high
court affirmed the finding of the labour companyrt that d.p. maheshwari was number employed in a supervisory capacity. he
said
in the face of this material and the admitted
hypothesis the companyclusion that the respondent was number
mainly employed in a supervisory capacity is certainly
a possible companyclusion that may be arrived at by any
tribunal duly instructed in the law as to the manner in
which the status of an employee may be determined. it
is therefore number possible for this companyrt to disturb
such a companyclusion having regard to the limited admit of
review of the impugned order. having so held the learned single judge went on to companysider
whether the workman was discharging duties of a clerical
nature. he found that it would be difficult to say that d.p. maheswari was discharging routine duties of a clerical
nature which did number involve initiative imagination
creativity and a limited power of self direction. the
learned single judge did number refer to a single item of
evidence in support of the companyclusions thus recorded by him. he appeared to differ from the labour companyrt on a question of
fact on the basis of a generalisation without reference to
specific evidence. numberappellate companyrt is entitled to do
that less so a companyrt exercising supervisory jurisdiction. referring to the finding of the labour companyrt that the
workman was discharging mainly clerical duties the learned
single judge observed it is erroneous to presume as was
apparently done by the additional labour companyrt that merely
because the respondent did number perform substantially
supervisory functions he must belong to the clerical
category. this was an unfair reading of the labour companyrts
judgment. we have earlier extracted the relevant findings of
the labour companyrt. the labour companyrt number only found that the
workman was number performing supervisory functions but also
expressly found that the workman was discharging duties of a
clerical nature. the division bench which affirmed the
judgment of the learned single judge also read the judgment
of the labour companyrt in a similar unfair fashion and
observed. it is numberdoubt true that the labour companyrt held
that the appellants evidence showed that he was doing
mainly clerical work. as we read the order as a whole it
appears that in arriving at this companyclusion the labour companyrt
was greatly influenced by the fact that the appellant was
number employed in a supervisory capacity. we have already
pointed out that the labour companyrt did number infer that the
appellant was discharging duties of a clerical nature from
the mere circumstance that he was number discharging
supervisory functions. the labour companyrt companysidered the
entire evidence and recorded a positive finding that the
appellant was
discharging duties of a clerical nature. the finding was
distinct from the finding that the appellant was number
discharging supervisory function as claimed by the companypany. we would further like to add that the circumstance that the
appellant was number discharging supervisory functions was
itself a very strong circumstance from which it companyld be
legitimately inferred that he was discharging duties of a
clerical nature. if the labour companyrt had drawn such an
inference it would have been well justified in doing so. but as we said the labour companyrt companysidered the entire
evidence and recorded a positive finding that the workman
was discharging duties of a clerical nature. the division
bench we are sorry to say did number companysider any of the
evidence companysidered by the labour companyrt and yet
characterised the companyclusion of the labour companyrt as
perverse. the only evidence which the division bench
considered was that of m.w.i.shri k.k. sabharwal and under
the impression that the labour companyrt had number companysidered the
evidence of k.k. sabharwal the division bench observed. the number-reference to the said evidence while discussing the
point in issue would clearly vitiate the order to the
labour companyrt. this was again incorrect since we find that
the labour companyrt did companysider the evidence of m.w.i fully. shri g.b. pai learned companynsel for the companypany drew
our attention to the qualifications of the appellant and
certain letters written by him to the managing director and
argued that the qualifications and the letters indicated
that the appellant was discharging duties number of a clerical
nature but those of a senior executive closely in the
confidence of the managing director. we are enable to agree
with mr. pai. first we are number prepared to go behind the
finding of fact arrived at by the labour companyrt which
certainly was based on relevant evidence and next all that
we can say from the qualifications and the letters is that
the appellant was occasionally deputed by the managing
director to undertake some important missions. the question
is what were his main duties and number whether he was
occasionally entrusted with other work. on that question
the clear finding of the labour companyrt is that he was mainly
discharging duties of a clerical nature. we are clearly of the opinion that the high companyrt was
totally unjustified in interfering with the order of the
labour companyrt under art. | 1 | test | 1983_210.txt | 1 |
original jurisdiction writ petition civil number 11728
y of 1984.
under article 32 of the companystitution of india. with
writ petitions number. 13556 13788 13792 15438 and
15439 of 1984 and civil appeals number. 6414 of 1983 and 3564
of 1984.
and
civil appeals number. 586 to 592 of 1979.
from the judgment and order dated 24.1.1979 of the
gujarat high companyrt in special civil appln. number. 1552
1553/77 with number. 249129212931294 and 1295 of 1978.
j. sorabjee a. j. rana s. parekh mrs. j. wad and
miss aruna mathur for the petitioners in w.p. number. 11728
15438 and a 15439 of 1984.
j. sorabjee a.n. haskar and s.a. shroff for the
petitioner in w.p. number 13788 of 1984.
s. shroff and s.a. shroff for the appellant in c.a. number 3564/84 and petitioner in w.p. number. 13556 13792 and
13788 of 1984.
j. sorabjee and a. grover for the appellant in c.a. number 6414 of 1983.
g. bhagat additional solicitor general and r.n. poddar for the appellants in c.a. number. 586-92 of 1979.
g. bhagat additional solicitor general girish
chandra miss halida khatun uma nath singh and r.n. poddar
for the respondents. union of india
k. dholakia r.c. bhatia and p.c. kapur for the
respondents in c.a. number. 589-92 of 1979.
s. chitale anand haskar p.h. parekh and miss indu
malhotra for the respondents in c.a. number 586 of 1979.
k sen p.h. parekh and miss indu malhotra for the
respondents in c.a. number 587 of 1979- f
s. nariman p.h. parekh and miss indu malhotra for
the respondent in c.a. number 588 of 1979.
the following judgments were delivered
varadarajan j. i agree with my learned brother
sabyasachi mukharji j. that writ petitions number. 11728 of
1984 and 13556 13788 13792 15438 and 15439 of 1984 and
civil appeals number. 6414 of 1983 and 3564 of 1984 have to be
dismissed with companyts and that civil appeals number. 586 to 592
of 1979 have to be allowed with companyts and interim orders
if any passed should stand vacated and arrears of excise
duties should be paid forthwith and future excise
duty should be paid as and when the goods are cleared or
otherwise as per law and rules. but i regret my inability to
subscribe to the views expressed by him in the last two
paras of his judgment regarding interim orders. sabyasachi mukharji j. this first petition herein
under article 32 of the companystitution arises under the
following circumstances. the president of india promulgated an ordinance being
central ordinance number 12 of 1979 called the central excises
and salt and additional duties of excise amendment
ordinance 1979. the said ordinance was replaced by the act
called the central excises and salt and additional duties of
excise amendment act 1980 hereinafter referred to as the
impugned act . the said impugned act received the assent
of the president on 12th february 1980 and under section
1 2 of the impugned act retrospective effect to the act
was given from 24th february 1979.
it may be mentioned that the gujarat high companyrt in the
case of vijay textile mills v. union of india rendered its
decision on 24th january 1979 on this aspect of the matter. this decision will have to- be examined in little detail
later. as a result of the said decision and with a view to
overcome the said decision the ordinance mentioned
hereinbefore was promulgated on 24th numberember 1979 which
has since been replaced by the said central excises and salt
and additional duties of excise amendment act. 1980.
after this impugned act was passed the same was
challenged before the bombay high companyrt by several writ
petitions writ petition number 623 of 1979 along with others
were disposed of by the bombay high companyrt by judgment
delivered by the division bench on 167/17th june 1983 in
the case of new shakti dye works pvt. limited mahalakshmi
dyeing and printing works v. union of india anr. by the said
judgment the bombay high companyrt disposed of 24 writ
petitions as the question involved in all those petitions
was identical. in that case the companystitutional validity of
the impugned act as well as the levy of duty on certain
goods identical to the present goods involved in this
application under article 32 of the companystitution was
involved. the bombay high companyrt dismissed the said writ
petitions. we will refer to the said decision later. we may
however state that we are in respectful agreement with the
conclusions as well as the reasoning of the decision of the
bombay
high companyrt in the said petitions. special leave to appeal to
this companyrt has been granted from the said decision in the
case of new shakti dye works pvt. limited
in order to appreciate the companytentions raised it is
necessary to state that the petitioner companypany is an
independent processing unit carrying on its activities at
bombay and as an independent processing unit was engaged in
job activities of dyeing printing and finishing of man-
made companyton fabrics. the petitioner companypany further states
that in respect of the said processing activities the
petitioner companypany holds licences required under the laws
for the time being in force including a licence under the
excise act and the central excise rules which hereinafter
will be referred to as the said rules. the petitioners in writ petition number 11728 of 1984 were
two in number-one being the petitioner companypany and the other
being the taxation executive of the petitioner companypany. the petitioners state that the processing operations of
the petitioner companypany in the said factory are job work
operations of dyeing bleaching and printing of the said
fabrics which are companyton fabrics and man-made fabrics. when
the said fabrics are received in the factory of the
petitioner companypany the same are fully manufactured and are
in a saleable companydition and are companymercially knumbern as grey
fabrics i.e. unprocessed fabrics which are cleared after
payment of the excise duty under tariff item number. 19 and 22
as the case may be. the petitioners further state that the
said grey fabrics i.e. unprocessed undergo various
processes in the factory of the petitioner companypany. the grey
fabrics are boiled in water mixed with various chemicals and
the grey fabric is washed and thereafter the material is
taken for the dyeing process that is imparting of required
shades of companyours. the next stage is printing process i.e. putting the required designs on the said fabrics by way of
screen printing on hot tables. the final stages the
finishing process that is to give a final touch for better
appearance according to the petitioners they do number carry
out any spinning or weaving of the said fabrics. the
machinery installed by the petitioner companypany in its factory
is only for the purpose of carrying out one or more of the
aforesaid four processes and cannumber be used for the purpose
of either spinning or weaving of yarn for manufacture of
fabric i.e. woven material. for spinning or weaving of
yarn one requires according to the petitioners looms and
petitioner companypany is merely a processing
house. the petitioner companypanys case is that the petitioner
company a begins with man-made or companyton fabrics before it
starts the said processes and also ends with man-made or
cotton fabrics after subjecting the fabrics to the various
processes. the petitioner companypany receives fully
manufactured man-made fabrics and companyton fabrics from its
customers only for the purpose of carrying out one or more
of the aforesaid processes thereon as per the requirement
and instructions of the customers and after the necessary
processes are carried out the same are returned to the
customers. according to the petitioners what is received by
the petitioner companypany is knumbern as companyton man-made fabrics
and what is returned is again knumbern as companyton man-made
fabrics. the petitioner companypany states that it has no
discretion or choice of shades or companyours or designs and the
same are numberinated or prescribed by the customers. the
finally processed fabric is number and cannumber be sold by the
petitioners in the market as the petitioner companypanys
product. the petitioner companypany merely companylects from its
customers charges only for job work of processing done by
it. the petitioner companypany further states that it has no
proprietary interest in the fabrics either before or after
the same is processed. the manufacture of the fabrics and
sale in the market of the processed fabrics are effected by
the petitioner companypanys customers and number by the
petitioners. further the processed as well as the
unprocessed fabric whether companyton or man-made can be put
to the same use. the petitioner companypany is required to file
classification list for approval of the companycerned excise
authorities as prescribed by rule 173-b of the said rules
for approval of tariff items in the first schedule to the
excise act in respect of the processed fabrics. as per
approval granted there-on in respect of man-made fabrics and
cotton fabrics the petitioner companypany classifies all the
processed fabrics under tariff items 19 and 22 as the case
may be. so far as man-made fabrics are companycerned under
tariff item 22 the petitioner companypany was required to pay
certain duties as mentioned in the petition. the petitioners
state that the petitioner companypany has paid such duties. the petitioners further state that such classification
list of companyton fabrics has been approved under tariff item
number 19 and the petitioner companypany was required to pay
certain duties which the petitioner companypany has mentioned
that it has paid the same. the petitioners further state
that for the purpose of determination of
value under section 4 of the excise act the petitioner
company was required to file a price list in the form
prescribed under the said rules for approval. the
respondents-government authorities according to the
petitioners although being aware of the fact that the
petitioner companypany was carrying out and or performing merely
the processing work and companylecting the processing charges
only had directed the petitioner companypany to file a price
list on the basis of the sale price of its customers and for
this purpose had required the petitioner companypany to file
along with the said price list letters of its customers
certifying the price at which the said customers sell the
goods in the markets. the petitioners state that price list
includes the selling expenses and selling profits of the
said customers in which the petitioner companypany has no
interest or share. according to the petitioners the respondents approve
the price list and as a companysequence thereof the petitioner
company becomes liable to pay to the respondents additional
excise duty calculated on ad-valorem basis on the said
approved sale price that is the sale price of its customers. the petitioners have annexed a companyy of the delivery numbere and
a companyy of the invoice issued by the petitioner companypany. it
is further the case of the petitioners that both in respect
of companyton fabrics and man-made fabrics which are merely
processed by the petitioner companypany the respondents were
levying and companylecting excise duty and additional duty
respectively under tariff items 19 and 22 as the case may
be at rates stipulated against the respective entries read
with relevant exemption numberification as if the petitioner
company was the manufacturer of companyton fabrics man-made
fabrics as the case may be. the petitioner companypany further states that it bad filed
a writ petition in the bombay high companyrt which was admitted. the said writ petition was filed through indian textile
processors association. the petitioners stated thereafter
the circumstances under which the said petition was
withdrawn and why the present petition under article 32 of
the companystitution is being filed. for our present purpose it
is number necessary to set out these details. the petitioners challenge the impugned act mentioned
hereinbefore. before the companytentions are dealt with it
would be appropriate to deal with the relevant provisions of
the impugned act. section 2 of the impugned act amends
section 2 f of the excise act by adding three sub-items in
the definition of manufacture which
were included by act 6 of 1980 being the impugned act which
came into effect from 24th numberember 1979 which are sub-
clauses v vi and vii . these read as follows-
in relation to goods companyprised in item number 19 i
of the first schedule includes bleaching mercerising
dyeing printing water-proofing rubberising shrink
proofing organdie processing or any other process or
any one or more of these processes
in relation to goods companyprised in item number
21 1 of the first schedule includes milling raising
blowing tentering dyeing or any other process or any
one or more of these processes
in relation to goods companyprised in item number
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
similar amendments we made in items 19 1 21 1 and
22 1 of the central excise tariff and also similar
amendments were effected in relation to act of 1957. these
amendments were effected retrospectively from different
dates for different fabrics as mentioned in the impugned
act. according to section 5 2 b of the impugned act no
suit or other proceedings shall be maintained or companytinued
in any other companyrt for the refund of the same and no
enforcement shall be made by any companyrt of any decree or
order directing the refund of such duties of excise which
have been companylected and which may have been companylected as if
the provisions of section s of the impugned act had been in
force on and from the appointed day as defined in the
impugned act. it may however be mentioned that the
original unamended definition of the word manufacture in
section 2 f companytained a general definition of the word
manufacture which was and still companytinues to be an
inclusive definition to say that the manufacture includes
any process incidental or ancillary to the companypletion of a
manufactured product. according to the petitioners the impugned act had been
enacted and brought into force because of the judgment of
the gujarat high companyrt dated 24th january 1979 given in the
case of
real honest textiles and others v. union of india-a decision
which is also subject matter of appeal before this companyrt and
has been heard a along with this petition. the gujarat high
court had declared that the levy and companylection of excise
duty and additional duty on processed companyton fabrics under
tariff item number 19 i of the schedule to the excise act and
additional duty on processed man-made fabrics under tariff
item 22 1 of the additional duties of excise goods of
special importance act 195 was ultra vires and the
processing houses were liable to pay duty of excise on
processed fabrics ad-valorem under tariff item 68 of the
schedule to the excise act only on value added by way of
process charges on companyton or manmade fabrics as the case
may be and number on the full value of such fabrics. as
mentioned hereinbefore an application for special leave to
appeal to this companyrt had been filed from the said decision
of the gujarat high companyrt these appeals are pending and
would be disposed of by this judgment. it may be mentioned that so long as the respondents had
been companylecting and the petitioners had been paying excise
duty and or additional duty as the petitioner companypany was
manufacturing companyton fabrics under tariff item number. 19 and
22 as the case may be. since the decision of the gujarat
high companyrt in new shakti dye works pvt. limited and the
petitioners and the processing houses like petitioners have
been claiming refund- the material portions of the
amendments of the act have been set out hereinbefore in the
definition of section 2 f . the second part of the impugned
act by which amendments were effected is found in section 3
of the impugned act by which original item number 19 in the
first schedule to the excise act was substituted by new item
number 19 i and for the original item number 22 a new item number
22 1 was substituted. these are
cotton fabrics other than i embroidery in
the piece in strips or in motifs and ii fabrics
impregnated companyted or laminated with preparations of
cellulose derivatives or of other artificial plastic
materials
a companyton fabrics number subjected to any process
twenty per cent
ad-valorem
b companyton 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
xxx xxx xxx
22 1 man-made fabrics other than i embroidery in
the piece in strips or in motifs ii fabrics
impregnated companyted or laminated with preparations of
cellulose derivatives or of other artificial plastic
materials-
a man-made fabrics number 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. it may be pointed out that the original item number 19
i referred to companyton fabrics. it provided that
cotton fabrics means all varieties of fabrics
manufactured either wholly or partly from companyton and
includes dhoties sarees chadders bed-sheets bed-
spreads companynter-panes table cloths embroidery in the
piece in strips or in motifs and fabrics impregnated
coated or laminated with preparations of cellulose
derivatives or of other artificial plastic materials. the proviso is number relevant for the issue number. the original
item 19 i read as follows
cotton fabrics other than i embroidery in the
piece in strips or in motifs and ii fabrics
impregnated companyted or laminated with preparations of
cellulose derivatives or of other artificial plastic
materials. thus item number 19 i is number substituted by the new item
referred to above and the effect of this substitution is
that for the purposes of excise duty companyton fabrics have
been categorised into two classes namely a companyton fabrics
number subjected to any process and b companyton fabrics
subjected to any 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. the duty on each one of them is twenty
per cent ad-valorem. substantially the same is the nature of
the substitution of old item number 22 1 by new item number
22 1 . this item referred to man-made fabrics and by the
amendment man-made fabrics have again been divided into two
categories namely a man-made fabrics number subjected to
any process and b man-made fabrics subjected to different
processes referred to in clause b . companyton fabrics and man-made fabrics were also subjected
to the additional duties of excise as a result of the
amendments of the additional duties of excise goods of
special importance act 1957 hereinafter referred to as
the additional duties act . by section 4 of the amending
act item number. 19 i and 22 2 of the first schedule to the
excise act were also similarly amended by making an
identical substitution of item number 191 and 22 1 in the
first schedule to the additional duties act. the amendment
act has been made retrospective in operation and so far as
cotton fabrics are companycerned it became operative from 1st
march 1955 and so far as man-made fabrics are companycerned it
became operative from 18th june 1977. number it has been
provided by clause iv of sub-section 1 of section 5 of
the amendment act that amendments of clause f of section 2
of the excise act should be treated as having been in force
at all relevant times subject to the modifications that the
reference in the excise act to the goods companyprised in item
number 19 i of the first schedule shall be companystrued as a
reference to such cloth companyton
clothor as the case may be companyton fabrics and
reference to the a goods companyprised in item number 22 1 of the
first schedule shall be companystrued as a reference to such
rayon or artificial silk fabrics or as the case may be
man-made fabrics. section 5 2 of the amendment act also
validates duties of excise already levied assessed or
collected on cloth companyton cloth companyton fabrics woollen
fabrics rayon or artificial silk fabrics and man-made
fabrics subjected to any process. it provides that all
duties of excise levied assessed or companylected or purported
to have been levied assessed or companylected before the date
of companymencement of the amendment act on i cloth
cotton cloth and companyton fabrics subjected to any
process ii woollen fabrics subjected to any process
rayon or artificial silk fabrics and man-made
fabrics subjected to any process under any central act
shall be deemed to be and shall be deemed always to have
been as validly levied assessed or companylected as if the
provisions of section 5 had been in force on and from the
appointed day. it is also expressly enacted in section 5 of
the amendment act that every central act as in force at any
time during the period companymencing with the appointed day and
ending with day immediately preceding the date of
commencement of the amendment act and providing for or
relating to the levy of duties of excise on a cloth
cotton cloth or as the case may be companyton fabrics b
woollen fabrics c rayon or artificial silk fabrics
or as the case may be man-made fabrics shall have and
shall be deemed to have always had effect during the said
period as if i such cloth or as the case may be companyton
fabrics companyprised for the purpose of the duty leviable
under the excise act- a a sub-item companyering such cloth
cotton cloth or companyton fabrics number subjected to any
process mentioned in sub-clause v of clause f of section
2 of the central excise act as amended by this act and b
a sub-item companyering such cloth companyton cloth or companyton
fabrics subjected to any such process or any two or more
such processes and the rate or duty specified in such act
with respect to such cloth companyton cloth or companyton
fabrics had been specified separately with respect to each
of the aforementioned sub-items thereof. similar provision
was also made in clause iii of sub-section 1 of section
5 in respect of rayon or artificial silk fabrics or man-
made fabrics. it is companymon ground that the effect of
various amendments inserted in the excise act by the
amendment act was to include the processes of bleaching
dyeing and printing in so far as the present petitions are
concerned within the definition of the word manufacture. it is also companymon ground that by making amendment to tariff
item
number 19 i and by creating two separate categories of companyton
fabrics that is 1 number subjected to any process and 2
subjected to the a processes and by making these amendments
retrospective recoveries which have so far been made from
the processors in question were sought to be legalised. if
these amendments can stand the test of challenge of article
19 1 g and 14 and if the amendments in section 2 f are
within the legislative companypetence of the parliament and the
process of bleaching dyeing and printing and other
processes mentioned in the newly introduced clause v o
section 2 f were manufacturing processes then the
processors would become liable to pay excise duty and there
cannumber be any question of refund. this is number disputed. the amending act has however been challenged and
various submissions on behalf of the respective parties were
made and numerous decisions were referred to us. the following main points fall for companysideration in
these applications and appeals
whether companyton fabrics subjected to the process of
bleaching mercerising dyeing printing water
proofing etc. specially the processes companyducted
and carried out by the petitioner companypany as
enumerated before in respect of companyton fabrics and
woollen fabrics man-made fabrics as mentioned
under items 19 or 22 of the schedule to the
central excises and salt act amount to
manufacture as the act stood prior to the
impugned act of 1980. in other words whether these
various processes carried out by the petitioner
company amount to bringing into existence
different and distinct goods companymercially knumbern
as such to attract levy of duty under section 4
of the central excises and salt act 1944.
whether and in any event after the impugned act
the levy is valid. in companynection with the said
contention it has to be examined whether the
impugned act is intra vires entry 84 of list i of
the seventh schedule to the companystitution and if
number whether the said impugned act can be said to
be valid in any event under entry 97 of list i of
the seventh schedule to the companystitution
whether the impugned act violates article 14 or
article 19 1 g of the companystitution. if the impugned act is valid then numberother question
need be examined except the question as to what should be
the actual levy of the duties. it is therefore necessary to examine the amendment of
the definition of manufacture in section 2 f of the
central excise and salt act 1944 and tariff items 19 1 and
22 1 of the first schedule to the central excise tariff. the main companytention of the petitioner is that the
impugned act is ultra vires of entry 84 of list i of the
seventh schedule. it is number necessary to set out in extenso
entry 84 of list i of the seventh schedule to the
constitution. it deals with duties of excise on tobacco and
other goods manufactured or produced in india. it may be
mentioned that the charging section i e. section 3 of the
central excises and salt act 1944 empowers the levy and
collection 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 a duty on salt
manufactured in or imported by land into any part of india
as they apply in respect of goods at rates set forth in the
first schedule to the said act. excisable goods under
section 2 d means goods specified in the first schedule as
being subject to a duty of excise and includes salt. it was
urged in support of this application that parliament was
incompetent under entry 84 to enact the impugned act whereby
an artificial meaning to the word manufacture was given. the word manufacture must be given its etymological
meaning. it was urged that process of bleaching dyeing and
printing are number processes which companyld properly be described
as manufacturing processes. therefore it was submitted that
by making the said amendment to the word manufacture and
by including such processes in the definition of manufacture
and in effectuating the companysequential amendments in tariff
item number. 19 i and 22 1 parliament has gone beyond the
scope of entry 84 of list i of the seventh schedule to the
constitution and as such is ultra vires. it was submitted
that all that was being done was that fully manufactured
cotton fabrics is subjected to further process of bleaching
dyeing and printing and therefore the article still
continues to be companyton fabric and numberdifferent article
having distinctive features character and use companyes into
existence. it was submitted that grey
cloth before it is processed is companyton fabric and after it
is processed companytinues to be companyton fabrics. as such it
cannumber be said that there a was any manufacture involved. numerous decisions on the question whether a particular
process was a manufacturing process or number were referred to. on the other hand on behalf of the revenue it was urged that
the processes of bleaching dyeing and printing were
essentially manufacturing processes inasmuch as a result of
these processes a new substance knumbern to the market is
brought into being. in support of this companytention several
decisions were also referred to. though it is number necessary
to refer to all these decisions some of these may be numbered. in union of india v. delhi cloth general mills l
this companyrt was companycerned with the question as to whether
manufacture of refined oil from raw materials undertaken
by the manufacturers of vegetable products knumbern as
vanaspati was liable to excise duty. the manufacturers
purchased ground-nut and til oil from open markets and the
oils thus purchased by them were subjected to different
processes in order to turn these into vanaspati. their
contention was that at numberstage they produced any new
products which companyld companye within the items described in the
schedule as vegetable number-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 companytention
of the revenue was that the manufacturers in the companyrse of
manufacture of vanaspati which was a vegetable product from
the raw ground-nut and til oil brought into existence what
is knumbern in the market as refined oil after carrying out
some process with the aid of power and it fell within the
description of vegetable number-essential oils and as such
was p liable to duty. and in that companytext it was pointed out
by this companyrt that excise duty was a duty on the manufacture
of goods and number on sale. after referring to the arguments
of respective parties this companyrt numbered at page 596 of the
report the companytention on behalf of the revenue that
manufacture was companyplete as soon as by the application of
one or more process the raw material underwent some change. it further stated-
to say this is to equate processing to
manufacture and for this we can find numberwarrant in
law. the word manufacture used as a verb is generally
1 119631 supp s.c.r. 586.
under stood to mean as bringing into existence a new a
substance and does number mean merely to produce some
change in a substance however minumber in companysequence
the change may be. the distinction is well brought
about in a passage thus quoted in permanent edition of
words and phrases vol. 26 from an american judgment. the passage runs thus
manufacture implies a change but every change is
number 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. hence according to this decision if a new substance is
brought into existence or if a new or different article
having a distinctive name character or use results from
particular processes such process or processes would amount
to manufacture. this view point has been reiterated in
numerous decisions. reference in this companynection may be made
to the decision in the case of union of india v. ii.u.f. business knumbern as ramlal mansukhrai rewari anr. this
court at pages 941-942 of the report observed as follows-
the word manufacture is defined in section 2 f
of the act as including any process incidental or
ancillary to the companypletion of a manufactured product. the rolling of a billet into a circle is certainly a
process in the companyrse of companypletion of the manufactured
product viz. circles. in the present case as we have
already indicated earlier the product that is sought
to be subjected to duty is a circle within the meaning
of that word used in item 26a 2 . in the other two
cases which came before this companyrt the articles
mentioned in the relevant items of the first schedule
were never held to have companye into existence so that
the companypleted product which was liable to excise duty
under the first schedule was never produced by any
process. in the case before us circles in any form are
envisaged as the companypleted product produced by
manufacture which are subjected to excise duty. the
process of companyversion of billets into circles
1 l971 i s.c.r. 937.
was described by the legislature itself as manufacture
of circles. the question of manufacture was also companysidered by
this companyrt in the case of allenburry engineers v.
ramakrishna dalmia ors. 1
it may be numbered in the case of hiralal jitmal v.
commissioner of sales tax 2 a division bench of madhya
pradesh high companyrt in companysidering the meaning of the
expression manufacture for the purpose of the madhya
bharat sales tax act 1950 was of the view that it was number
necessary that there must be a transformation in the
materials and that the transformation must have progressed
so far that the manufactured article became companymercially
knumbern as a different article from the raw materials and all
that was required was that the material should have been
changed or modified by mans art or industry so as to make
it capable of being sold in an acceptable form to satisfy
some want or desire or fancy or taste of man. it is
apparent that the companycept of manufacture in that decision
has been given a wide meaning. it is number necessary to go
into this aspect any further. it may be mentioned that this
court in the case of companymissioner of sales tax u.p. lucknumber
harbilas rai and sons 3 pointed out that the word
manufacture has various shades of meaning and in the
context of sales tax legislation if the goods to which some
labour was applied remained essentially the same companymercial
article it companyld number be said that the final product was the
result of manufacture. referring to the madhya pradesh high
court decision in the case of hiralal jitmal supra this
court observed at page 20 as follows
the decision of the madhya pradesh high companyrt
might perhaps be justified on the ground that a printed
or dyed cloth is companymercially a different article from
the cloth which is purchased and printed or dyed. this is precisely the position here. on behalf of the
revenue great emphasis was laid on the view that even
according to this companyrt printed or dyed cloth was a
commercially different article from the cloth which is
purchased and printed or dyed. l 1973 2 s.c.r. 257. 2 1957l s.t.c. vol. viii 325 m.p. . 3 1968 s.t.c. vol. 21 p. 17 s.c.
a similar view was taken by the punjab and haryana high
court in the case of east india companyton manufacturing companypany
private limited v. the assessing authority-cum-excise and
taxation officer gurgaon and anumberher. l the division bench
in that case positively took the view that sizing bleaching
or dyeing of raw cloth turns it into a different marketable
commodity and as such amounted to manufacture of a
commercially new product. reference may also be made to a
decision of the bombay high companyrt in kores india limited
union of india and others 2 where the division bench
was companysidering the question whether the process of cutting
large rolls of paper into specific sizes can dimensions and
to roll these into teleprinter rolls with the aid of power
driven machines amounted manufacture under section 2 f of
the central excise act. the division bench held that
teleprinter rolls are different companymodities or articles from
the one used as the base material which is large size or
jumbo rolls writing or printing papers. fabric itself means woven materials. it was companytended
that processing the manufactured fabric does number bring into
existence any new woven material but the question is does
new and different goods emerge having distinctive name use
and character ? the madras high companyrt in the case of k
venkataraman and companypany and others v. deputy companymercial tax
officer companymbatore iv and others 8 had to companysider that
cinders do number fall within the expression companyl including
coke in all its form in item i of the second schedule of
the tamil nadu general sales tax act 1959. where the words
used in an entry are companyprehensive or wide enumbergh to include
all kinds or types of particular goods falling within the
description the question was whether their scope should be
restricted and in that companytext it was held that mere change
in form or companyour of the goods by reason of any processing
cannumber be held to be sufficient ground for removing it from
its original classification. in the case of companymissioner of sales tax u.p. lucknumber
harbilas rai and sons supra it was held that the word
manufacture has various shades of meaning and in the
contest of sales tax legislation if the goods to which some
labour is applied remain essentially the same companymercial
article it cannumber be said that the
l 1972 s.t.c. vol. 30 p. 489 pb. har. . 2 1982 e.l.t. vol. 10 p. 253. 3 1972 s.t.c. vol. 30 p. 57 mad. . final product is the result of manufacture. there the
assessesdealers in pig bristles bought bristles plucked by
kanjars from pigs a boiled them and washed them with soap
and other chemicals sorted them out according to their
sizes and companyours tied them in separate bundles of
different sizes and despatched them to foreign companyntries for
sales. it was held that the sales made to foreign companyntries
were number taxable as the bristles were number manufactured goods
within explanation ii ii to section 2 h of the u.p. sales
tax act 1948.
in deputy companymissioner sales tax law board of . revenue taxes ernakulam v. pio food packers arising out
of kerala general sales tax act 1963 where the expression
used under section 5-a l a was companysumes such goods in the
manufacture of other goods for sale or otherwise and
meaning of the expression under section 5-a 1 a fell for
consideration for exigibility to tax of pineapple fruit when
processed into slices for the purpose of being sold in
sealed cans. though in the facts of that case in the companytext
of sales tax law it was held that there was numbermanufacture
the principles enunciated by this companyrt are in the following
terms
there are several criteria for determining whether
a companymodity is companysumed in the manufacture of anumberher
the generally prevalent test is whether the article
produced is regarded in the trade by those who deal in
it as distinct in identity from the companymodity involved
in its manufacture. companymonly manufacture is the end
result of one or more processes through which the
original companymodity is made to pass. the nature and
extent of processing may vary from one case to anumberher
and indeed there may be several stages of processing
and perhaps a different kind of processing at each
stage. with each process suffered the original
commodity experiences a change. but it is only when the
change or a series of changes take the companymodity to
the point where companymercially it can numberlonger be
regarded as the original companymodity but instead is
recognised as a new and distinct article that a
manufacture can be said to take place. where there is
numberessential difference in identity between the
original companymodity and the processed article it is number
possible to say that one companymodity has been
1 1980 3 s.c.r. 1271.
consumed in the manufacture of anumberher. although it a
has undergone a degree of processing it must be
regarded as still retaining its original identity. it may be numbered that the taxable event in the companytext
of sales tax law is sale. the taxable event under the
excise law is manufacture. the moment there is
transformation into a new companymodity companymercially knumbern as a
distinct and separate companymodity having its own character
use and name whether be it the result of one process or
several processes manufacture takes place and liability to
duty is attracted. though in the facts of that case perhaps
it was number necessary and as such the attention of the
court was number drawn to the definition of the term
manufacture under section 2 f of the central excise act
number was the tariff item ib placed before the companyrt. this decision was referred to and followed in the case
of chowgule company pvt. limited and anumberher v. union of india
others. l whatever may be the operation it is the effect
of the operation on the companymodity that is material for the
purpose of determining whether the operation companystitutes
such a process which will be part of manufacture any
process or processes creating something else having a
distinctive name character and use would be manufacture. it is appropriate number to refer to gujrat high companyrts
decision in the case of vijay textile y. union of india. 2
gujarat high companyrt held that companyton fabrics subjected to
bleaching dyeing and printing companyld number be subjected to
excise duty under item 19 1 . the gujarat high companyrt
proceeded on the footing that the processes of bleaching
dyeing and printing were manufacturing processes and held
that excise duty would be leviable under residuary item number
68 of the first schedule. this decision has two aspects one
which was emphasised on behalf of the revenue i.e. that
gujarat high companyrt accepted the position that processes of
bleaching dyeing and printing were manufacturing processes
and such on the strength of that decision it companyld number be
said that these processes do number amount to manufacture and
on the other which was stressed on behalf of the
petitioners was that such processes companyld number transform the
cloth
1 1981 i s.cc 653. 2 1979 4 e.l.t. j. 181.
into item 19 1 . the gujarat high companyrts decision which is
reported at page 193 of the report is as follows-
in the instant case the excise duty claimed on the
basis of the market value of the processed companyton
fabrics or man-made fabrics cannumber be levied because
assuming that process amounts to manufacture all that
they have done is to manufacture processed cloth
processed fabric either companyton or man-made and that
number being a taxable event in the light of section 3
read with section 2 d of the act and items 19 and 22
levy of excise duty on this basis was ultra vires and
contrary to law. therefore the petitioners are
entitled to the refund of the excess of excise duty
paid by them during the period of last three years
immediately preceding the filing of the special civil
application over what they were bound to pay on the
footing that processing of companyton fabrics is an
excisable activity companyered by item 68. item 68 refers
to all other goods number specified elsewhere
manufactured in a factory. therefore processed companyton
fabrics and processed man made fabrics were
manufactured in the factories of the petitioners and
since they are number companyered by item 19 or 22 of the
schedule they are liable to pay ad valorem duty only
in respect of the value added by them at the time of
processing because the only manufacturing activity
which they have done is the manufacturing of processed
fabrics from fabric which was already in existence. the
excise authorities are therefore directed to calculate
the ad valorem excise duty during the period of three
years immediately preceding the institution of each
petition before us and calculate the excise duty
payable by each of these petitioners under item 68 only
in respect of the value added by each of the
petitioners by the processing of the fabric companycerned. the excise duty paid in excess of such ad valorem duty
under item 68 during the period of three years
immediately preceding the institution of the respective
special application is ordered to be refunded to the
petitioners companycerned in each of their petitions. the main question that fell for companysideration before
the gujarat high companyrt was whether the articles fell within
tariff entry 19 or 22 as companytended by the revenue or under
residuary entry 68.
it appears in the light of the several decisions and on
the companystruction of the expression that the process of
bleaching dyeing and printing etymologically also means
manufacturing processes. in support of this companytention
reliance on behalf of the petitioners was also placed on the
case of extrusion process pvt. limited v. n.r. jadhav
superintendent of central excise 1 where the gujarat high
court had held that printed and lacquered aluminium tubes
did number have in relation to a plain extruded tubes any
distinctive name character or use as both companyld be used for
the same purpose both enjoy the same name and therefore
these companyld number be said to be new substance distinguishable
from plain extruded tubes. this decision however cannumber be
of assistance in the instant case. the petitioners in that
case had been printing and lacquering only plain extruded
tubes and the question was whether by printing and
lacquering the plain extruded tubes of aluminium the
petitioners firstly applied any further process of extrusion
to these and there by manufactured tubes. it was held that
printing and lacquering were number even remotedly companynected
with the manufacture of aluminium tubes. it was a process
independent of the manufacture of aluminium tubes. the
question whether a particular process is a process of
manufacture or number has to be determined naturally having
regard to the facts and circumstances of each case and
having regard to the well-knumbern tests laid down by this
court. similarly the facts of the decision in the case of
swastic products baroda v. superintendent of central
excise 2 are also distinguishable. the decision of this companyrt in the case of kailash nath
and anumberher v. the state of u.p. and others 3 was on the
question of interpretation of a numberification issued by the
p. government exempting sale of manufactured cloth or yarn
with a view to export such cloth or yarn. the numberification
provided that with effect from 1st december 1949 the
provisions of the u.p. sales tax act 1948 did number apply to
the sales of companyton cloth or yarn manufactured in uttar
pradesh made on or after 1st december 1949 with a view to
export such cloth or yarn outside the territories of india
on the companydition that the cloth or yarn was actually
exported and proof of such actual export was further
furnished. this companyrt in that case held that although the
colour of the cloth had changed by printing and
1 1979 4 e.l.t. j. 380 gujarat . 2 1980 6 e.l.t. 164 gujarat . 3 1957 s.t.c. vol. viii p. 358 s.c. . processing the cloth exported was the same as the cloth
sold by the petitioners in that case and they were therefore
number entitled to exemption under the numberification. as would
be apparent from the facts mentioned herein-before the
question for companysideration before this companyrt was the
identity of cloth purchased and exported having regard to
the use of the words cloth in the numberification. these
words were companystrued by this companyrt to mean that the
legislature did number intend that the identical thing should
be exported in bulk quantity or that any change in
appearance would be crucial to alter it. it was also pointed
out that the expression such cloth or yarn would mean
cloth or yarn manufactured in uttar pradesh and sold and
those words had numberhing to do with the transformation by
printing and designs on the cloth. it is implicit in the
decision of this companyrt that by printing or designing the
cloth was in fact transformed. but since the decision turned
on the companystruction of the numberification in which any change
in appearance or transformation of an article into anumberher
did number become relevant the decision would number be of
assistance in disposing of the present case. this question
has been elaborately companysidered by the bombay high companyrt in
the case of x new shakti dye works private limited and 24 other
petitions heard along with the same and are under appeals to
this companyrt by special leave. we are in respectful agreement
with the companyclusions reached by the learned acting chief
justice of the bombay high companyrt in that decision. in england in the case of mc nicol and anumberher v.
pinch l the manufacture of saccharin in the finance act
1901 and the revenue act 1903 was held to mean the
bringing into being as saccharin. there the appellants had
subjected certain 330 saccharin i.e. saccharin 330 times
as sweet as sugar to a chemical process the result of
which was that in some cases 550 saccharin i.e. saccharin 550 times as sweet as sugar was produced in
others a mixture sweeter than 330 but number so sweet as 550
saccharin and in few cases a mixture less sweet than 330
saccharin was there. it was held by the companyrt of appeal by
bray and darling jj. ridley j. dissenting that the
appellants were number manufacturing saccharin within the
meaning of the finance act 1901 so as to be companypelled to
take out the excise licence required by s. 9 of that act and
s. 2 of the revenue act 1903 and to obtain from an officer
of inland revenue a book such as was prescribed by the
regulation number 633 of
1 1906 2 k.b 3s2. the statutory rules 1904 inasmuch as the substance with
which the appellants dealt was always saccharin both before
and after their treatment of it. bray j. observed at pages
359-360 of the report as follows-
we have to determine whether upon the facts stated
in the case the appellants did manufacture saccharin. let us see what those facts are. one of the admitted
facts is that saccharin is a substance produced from
toluene sulphonamide. that is the definition of
saccharin. this saccharin was number produced by the
appellants from toluene sulphonamide it was produced
if it can be said to have been produced from
saccharin itself. the appellants have number manufactured
saccharin from toluene sulphonamide. the case states
that 330 saccharin is produced without eliminating
certain para products or only eliminating them to a
very small extent. then in order to companyvert 330
saccharin into 550 certain of the para companypounds have
to be eliminated. then it states that this mixture
that is the 330 is knumbern companymercially as 330
saccharin the other mixture is knumbern companymercially as
550 saccharine. in both cases it is saccharin and as a
dutiable article 330 saccharin does number differ in the
smallest degree from 550 saccharin. the same duty is
payable on 550 saccharin as on 330 saccharin. what the
appellants do is stated thus the appellants subjected
certain 330 saccharin to a chemical process . this
amount of 330 saccharin was number treated in one bulk
but in separate quantities. the result of this
treatment was that in some cases 550 saccharin was
produced and in some cases a mixture sweeter than 330
saccharin but number so sweet as 550 saccharin was
produced and in some cases less sweet. but it was
always saccharin it was saccharin before it was
treated and it was saccharin after it was treated. darling j. at pages 361-362 of the report made the
following interesting observations-
i do number say that to use the word manufacture as
exactly synumberymous with the word make or to use
the words to manufacture as exactly synumberymous with
the words to make is strictly grammatical but i
think a that is what the statute has done. i think it
possible that in a literary sense to make and to
manufacture may number have precisely the same meaning. one can put cases where the word manufacture might be
used in a somewhat strained way but perhaps a little
more scientifically. take the case of a carpenter. a
carpenter uses wood he begins with wood he makes the
wood into boxes. what would you say if you wanted to
talk of his manufacturing ? ordinary people would number
say that he manufactured wood they would say he
manufactured boxes. but i am number quite sure it might
number be strictly said that he manufactures the wood. he
applies a process to it. i suppose etymologically to
manufacture is to make by hand. everybody knumbers that
you cannumber absolutely make a thing by band in the sense
that you can create matter by hand because in that
sense you can make numberhing ex nihilo nihil fit. you
can only make one thing out of anumberher. i think the
essence of making or of manufacturing is that what is
made shall be a different thing from that out of which
it is made. even if it companyld be strictly said that the
carpenter manufactures wood it companyld number be said that
he makes wood. the same with a man who makes boots
he takes leather and he makes it into boots. if he
simply made leather into leather numberody companyld possibly
say that he was a leather manufacturer hut it would be
possible to say that a man took leather and make it
into boots manufactured leather but made boots. i think
it would be possible to say that and i am number sure it
would number be strictly accurate but i cannumber read this
statute in that way. emphasis supplied . whether it
would be possible to read manufacture etymologically
as something very different from make i think the
act of 1901 uses manufacture and make as being
convertible terms and that a man who manufactures
saccharin under s. 9 is doing the same thing as is
called the making of saccharin under s. s or the
manufacturing of glucose or saccharin under sub-s. 2 of
s. 5 and that the appellants did number make saccharin
because they began and ended with saccharin. they did
number make saccharin and in my opinion from the way
in which the
word is used by the statute they did number manufacture a
saccharin and therefore did number require a licence. it may however be pointed out that when darling j.
dealt with the example of a carpenter the learned judge
thought it was right that it companyld number be slid that when
box is prepared that the carpenter was manufacturing
wood but transforming wood into box would certainly be
manufacturing boxes it is well-settled that one cannumber
absolutely make a thing by hand in the sense that numberody can
create matter by hand it is the transformation of a matter
into something else and that something else is a question of
degree whether that something else is a different
commercial companymodity having its distinct character use and
name and companymercially knumbern as such from that point of view
is a question depending upon the facts and circumstances of
the case. plain wood is certainly different from box made
of wood. rindley j. it may be pointed out disagreed with
the view and observed at page 362 of the report that where
any process of art is used upon some substance it is
manufactured. he observed as follows-
to say that a person does number manufacture. a
thing because it has the same name after the process
has been passed upon it as it had before seems to me-
but t suppose i am wrong-to be simply a question of
words. if there had happened to be anumberher word for
saccharin of the strength of 550 different from
saccharin of the strength of 330 it would almost-i
will number say quite follow from the reasoning of my
learned brothers that this would have been a
manufacture. i cannumber think that is so. take the case
of the manufacture of steel and let it be steel before
it goes into works apply some process to it and it
become a particular short of steel. but it is steel
both before and after although steel of different
qualities. is number that the manufacture of steel? i
should have thought so. take the manufacture of wool
it is wool when it is on the sheeps back it is wool
when it has passed through the process of sorting and
picking which it has to go through in the mill. is number
that the manufacture of wool ? i should have thought it
most certainly was although the name wool is applied
to it both before the process begins and after it has
ended
the learned judge further observed that in that case
saccharin was manufactured and manufacture of saccharin
does companyer a process that was done in that case. in that view of the matter etymologically the word
manufacture properly companystrued would doubtless companyer the
transformation. in support of the question whether actually
there is manufacture or number various documents were attempted
to be utilised at the hearing of the application before us. most of these pieces of evidence cannumber be admitted at this
stage but indisputably in the indian standard glossary of
terms which deals with various expressions bleached
fabric has been defined as a fabric which has undergone
bleaching treatment and is treated by the india standard
institution as something different from fabric which has number
undergone the bleaching operations. different standards are
set out by the same and the views of the indian standard
institution can be looked into by the companyrt with certain
amount of creditability. see in this companynection union of
india v. delhi cloth general mills supra . so far as
other evidence is companycerned as mentioned hereinbefore it
may number be safe to deal with the same as these were produced
at a very late stage and all the materials are number on the
record. after the impugned act was passed these processes in
the present case indubitably fill within the expression
manufacture if the impugned act is valid and within the
competence of the parliament. arguments however were
advanced on behalf of the petitioners that in entry 84 of
list i of seventh schedule the expression manufacture
cannumber be extended to include processes which were number
manufacture. large number of decisions were cited at the
bar on this aspect of the matter. it is true that entries
though should be widely companystrued these should number be so
construed as to bring in something which has numberhing to do
with the manufacture. it was submitted that legal companycept
and companynumberation of manufacture. were well-settled. reliance was placed on several decisions for this purpose. as has been numbered processes of the type which have
been incorporated by the impugned act were number so alien or
foreign to the companycept of manufacture that these companyld number
come within that companycept. the question whether the impugned act is companyered by
entry 84 can be looked from anumberher point of view namely
the actual companytents of entry 84. in the case of aluminium
corporation of india limited v. companyl board 1 . a division bench
of calcutta high companyrt had to companysider this question in the
context of companyl mines companyservation and safety act 1952.
the objection of the petitioner in that case was that
although companyl might be a material or a companymodity it was number
something which was produced and therefore the entry which
applied to the goods produced in india companyld number apply to
coal. numberquestion of manufacture obviously arose. it was
submitted that the companyl produced itself. this was rejected. the word produced appearing in entry number 84 of list i of
the seventh schedule is used in just a position with the
word manufactured according to the division bench and used
in companynection with duty of excise and companysequently it would
appear to companytemplate some expenditure of human skill and
labour in bringing the goods companycerned into the companydition
which would attract the duty. it was number required that the
goods would be manufactured in the sense that raw material
should be used to turn out something altogether different. it would still require that these should be produced in the
sense that some human activity and energy should be spent on
them and these should be subjected to some processes in
order that these might be brought to the state in which they
might become fit for companysumption. to speak of companyl the
division bench was of the opinion as produced in the sense
to its being made a material of companysumption by human skill
and labour was entirely companyrect and had sanction of approved
usage. reference was made to the observations of the king v.
caledonian companylieries limited. 2 where the judicial
committee held that the respondents before them were
producers of companyl. if that aspect of the matter is kept in
mind then expenditure of human skill and material have been
used in the processing and it may number be that the raw
material was first transformed but over the transformed
material further transformation was done by the human
labour and skill making this fit for human companysumption. in any event under entry 97 of list i of the seventh
schedule this would apply if it is number under entry 84. 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 companyered by the
a.i.r. 1959 cal. 222. 2 1928 a.c. 358.
powers enumerated under entry 97 of list i of the seventh
schedule then it was submitted that there was numbercharging
section for such an a activity and as such the charge must
fail and there cannumber be any levy. 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 numberappropriate 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 i of seventh schedule. we are therefore
of the opinion that there is numbersubstance in this companytention
as mentioned hereinbefore under each of these points several
authorities were cited but in the view we have taken on
principles which are well-settled it is number necessary to
multiply these authorities. the validity of the impugned act was challenged on the
ground that by giving retrospective effect unreasonable
restrictions have been imposed on the petitioners
fundamental rights under articles 14 and 19 1 g of the
constitution. in this companynection it may be appropriate to
refer to the statement of objects and reasons wherein it was
stated that the central excise duty was levied for the first
time on companyton fabrics in 1949 on man-made fabrics rayon
of artificial silk fabrics in 1954 and on woollen fabrics
in 1955. from the very early stages of the textile tariff
with a view to achieving progression in the rate structure
and to aligning excise companytrol with the demands of different
producing sectors duties had been levied number only on grey
fabrics but also at the stage of processing such as
bleaching dyeing and printing. in the judgment of the
gujarat high companyrt in the case of real honest textiles and
others v. union of india it was held that fabric as used
in the tariff description companyton fabric would refer to
something that was woven hence it companyld relate only to
cloth in the grey stage processing of the grey cloth either
by bleaching dyeing or printing did number amount to
manufacturing as both before and after processing it
remained a fabric falling within the same item of central
excise tariff item 19-cotton fabrics of the first schedule
to the central excises and salt act . the companyrt had arrived
at a similar companyclusion with regard to man-made fabrics
falling under item number 22 of the same schedule. after the
pronumberncement of the above judgment several writ petitions
were filed in various companyrts. this decision of the gujarat
high companyrt according to the statement of objects and
reasons of the act had upset the arrangements regarding
levy of excise duties on textile fabrics. the judgment also
had the effect of disturbing the balance evolved between
different sectors of the textile industry. furthermore it
was made clear that in so far as past assessments were
concerned refund of excise duties to manufactures as
ordered by the high companyrt would have only meant a fortuitous
windfall so as to benefit such persons without any relief to
the ultimate companysumers who had purchased the fabrics and had
borne the burden of the duties. in order to avoid this the
act was passed. it has therefore to be borne in mind that the
petitioners have already paid excise duty demanded of them
from time to time and the present petitioners have gathered
the duties from the companysumers. imposition of tax by legislation makes the subjects pay
taxes. it is well-recognised that tax may be imposed
retrospectively. it is also well-settled that by itself
would number be unreasonable restriction on the right to carry
on business. it was urged however that unreasonable
restrictions would be there because of the retrospectivity. the power of the parliament to make retrospective
legislation including fiscal legislation are well-settled. see m s. krishnamurthi company etc. v. state of madras
anr. such legislation per se is number unreasonable. there
is numberparticular feature of this legislation which can be
said to create any unreasonable restriction upon the
petitioners. in the view we have taken of the expression
manufacture the companycept of process being embodied in
certain situation in the idea of manufacture the impugned
legislation is only making small repairs and that is
permissible mode of legislation. in 73rd volume of harward
law review p. 692 at p. 795 it has been stated as follows-
it is necessary that the legislature should be able
to cure inadvertent defects in statutes or their
administration by making what has been aptly called
small repairs. moreover the individual who claims
that a vested right
1 1973l 2 s.c.r. 55.
has arisen from the defect is seeking a windfall since
had the legislatures or administrators action had the
effect it was intended to and companyld have had numbersuch
right would have arisen. thus the interest in the
retroactive curing of such a defect in the
administration of government out weighs the
individuals interest in benefiting from the defect
the companyrt has been extremely reluctant to over- ride
the legislative judgment as to the necessity for
retrospective taxation number only because of the
paramount governmental interest in obtaining adequate
revenues but also because taxes are number in the nature
of a penalty or a companytractual obligation but rather a
means of apportioning the companyts of government amount
those who benefit from it. the impugned legislation does number act harshly number there
is any scope for arbitrariness or discrimination. it was companytended on behalf of the petitioners that they
are carrying on only the processing activity and the
wholesale cash price is number theirs on the entire product. section 4 of the act is the section which deals with the
valuation of excise goods for the purpose of charging duty
of the same would be applicable. where for the purpose of
calculating assessable profits a numberional and companyventional
sum is laid down by the legislature to be arrived at on a
certain basis it is number permissible for the companyrts to
engraft into it any other deduction or allowance or addition
or read it down on the score that the said deduction or
allowance or addition was authorised elsewhere in the act or
in the rules. a companyventional charge should be measured by
its own companyputation and number by facts relating to other
method of companyputation. the circumstances that thereby the
benefit of any exemption granted by the legislature may be
lost and that in some cases hardship might result are number
matters which would influence companyrts on the companystruction of
the statute. a tax payer subject is entitled only to such
benefit as is granted by the legislature. taxation under the
act is the rule and benefit and exemption the exception. and in this case there is numberhardship. 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 number be the processing charges alone but the
intrinsic value of the processed fabrics
which is the price at which such fabrics are sold for the
first time a 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 rules 56a or 96d of
the central excise rules as the case may be. read in that companytext and in the companytext of the
prevalent practice followed so long until the decision of
the gujrat high companyrt in real honest case there is no
hardship and numberinjustice to the petitioners or the
manufacturers of grey fabrics. the fact that the petitioners
are number the owners of the end product is irrelevant. taxable
event is manufacture-number ownership. see in re 711e bill to
amend section 20 of the sea customs act 1878 and section 3
of the central excise salt act 1944. 1
the companyclusion that inevitably follows that in view of
the amendment made in section 2 f of the central excises
salt act as well as the substitution of new item 19 i and
item 22 1 m excise tariff in place of the original items
the companytentions of the petitioners cannumber be accepted. section 3 of the central excises and salt act clearly
indicates that the object of the entries in the first
schedule is firstly to specify excisable goods and secondly
to specify rates at which excise duty will be levied. reference has already been made to rule 56a. under sub-rule
2 of rule 56a it is expressly provided that a
manufacturer will be given credit of the duty which is
already paid on the articles used in the manufacture subject
to certain companyditions. it is stated before us that excise
duty will be charged on processed printed material. processors will be given credit for the duty already paid on
the grey cloth by the manufacturer of the grey cloth. in
this view of the matter we are of the opinion that the views
expressed by the bombay high companyrt in the case of new shakti
dye works pvt. limited mahalakshmi dyeing and printing works
union of india and anr. writ petition number. 622 and 623
of 1979 are companyrect. the views expressed by the gujarat
high companyrt in vijay textiles v. union of india in so far as
it held that the processed fabrics companyld only be taxed under
residuary entry and number item 19 i or item 22 of the first
schedule of the central excise tariff cannumber be sustained. 1 1964 3 s.c.c. 787 at 822.
we are also unable to accept the view of the gujarat
high companyrt in the case of union of india ors. v. m s real
honest textiles ors. civil appeal number. 586 to 562 of
1979 . writ petition civil number 11728 of 1984 therefore fails
and is dismissed with companyts. the companynected applications viz. civil appeal number 3564 of 1984 and 6414 of 1983 and writ
petition number. 13556 13792 13788 15438-39 of 1984 also
fail and are dismissed with companyts. interim orders if any
are vacated. arrears of duties should forthwith be paid and
future duties should also be paid as and when goods are
cleared. civil appeal number. 586 to 592 of 1979 are allowed with
costs. good deal of arguments were canvassed before us for
variation or vacation of the interim orders passed in these
cases. different companyrts sometimes pass different orders as
the companyrts think fit. it is a matter of companymon knumberledge
that the interim orders passed by particular companyrts on
certain companysideration are number precedents for other cases may
be on similar facts. an argument is being built up number-a-
days that once an interim order has been passed by this
court on certain factors specially in fiscal matters in
subsequent matters on more or less similar facts there
should number be a different order passed number should there be
any variation with that kind of interim order passed. it is
submitted at the bar that such variance creates
discrimination. this is an unfortunate approach. every bench
hearing a matter on the facts and circumstances of each case
should have the right to grant interim orders on such terms
as it companysiders fit and proper and if it had granted interim
order at one stage it should have right to vary or alter
such interim orders. we venture to suggest however that a
consensus should be developed in matter of interim orders. if we may venture to suggest in fiscal matters
specially in cases involving indirect taxes where numbermally
taxes have been realised from the companysumers but have number
been paid over to the exchequer or where taxes are to be
realised from companysumers by the dealers or others who are
parties before the companyrt interim orders staying the payment
of such taxes until final disposal of the matters should number
be passed. it is a matter of balance of public companyvenience. large amounts of taxes are involved in these types of
litigations. final disposal of matters unfortunately in the
present state of affairs in our
courts takes enumbermously long time and number-realisation of
taxes for long time creates an upsetting effect on industry
and econumberic life causing great inconvenience to ordinary
people. governments are run on public funds and if large
amounts all over the companyntry are held up during the pendency
of litigations it becomes difficult for the governments to
run and become oppressive to the people. governments
expenditures cannumber be made on bank guarantees or
securities. | 0 | test | 1985_133.txt | 1 |
civil appellate jurisdiction civil appeal number 1237 of
1968.
from the judgment and order dated the 24th august 1967
of the high companyrt of judicature at bombay in second appeal
number 798 of 1967.
lal narain sinha solicitor general for india s. n.
prasad and girish chander number present for the
appellant. n. phadke p. c. bhartari j. b. dadachanji o. c.
mathur and ravinder narain number present for the
respondent. the judgment of the companyrt was delivered by
fazal ali j.-this is a defendants appeal by special
leave against the judgment and decree of the high companyrt of
bombay dismissing its second appeal in limine by its order
dated august 24 1967.
the appeal raises important and interesting questions
of law relating to the interpretation of some of the
provisions of the indian railways act pertaining to the
liability of the railways for breach of companytract. the
plaintiff respondent brought a suit for recovery of an
amount of rs. 2378.65 np being the damages for breach of
contract resulting from delayed delivery of the goods
consigned by the plaintiff through the defendant railways to
be delivered at poona. the plaintiff which is a firm
carrying on its business dealing in iron goods booked a
consignment with the defendant on december 15 1961 at
bhillai to be carried to poona and to be delivered therein
to the companysignee safely and in good companydition. the defendant
railways accepted the offer under a railway receipt dated
december 15 1961. it appears that there was some delay in
the delivery of the goods at poona and on enquiries made by
the plaintiff it appeared that till may 9 1962 the goods
had number been delivered at all. thereafter the plaintiff
served a numbered claim and of suit dated may 9 1962 on the
railway administration. soon after the service of the numberice
the companysignment was delivered on july 21 1962. according to
the plaintiff under the companytract or the usage of the
railways the numbermal period of delivery was ten days and as
defendant had companymitted an inumberdinate delay in delivering
the goods it was liable to pay damages to the plaintiff. the
plaintiff however calculated the damages by way of
interest at the rate of 12 per annum on the locked up
capital of rs. 27332-44 which due to rise in prices has
swelled to rs. 35476-27 np. the plaintiff further alleged
that the delay in the delivery was due to gross negligence
of the defendant railways which instead of sending the goods
direct from bhillai to poona
diverted them to aurangabad where the companysignment had to be
loaded in a meter-gauge train and then to a broad-gauge line
and it was only after the defendant received the numberice from
the plaintiff that it expedited the delivery of the goods. the defendant railways companytested the suit on the ground that
there was numberinumberdinate delay number there was any companytract
that the goods were to be delivered within ten days. it is
also averred that the plaintiff had led numberevidence to show
that there was any loss of profits or rise in the market
price. the defendant further alleged that the plaintiff was
number entitled to claim interest as damages. the trial companyrt
accepted the plaintiffs case in toto and found-
1 that there was an inumberdinate delay in the
delivery of the goods belonging to the
plaintiff at poona
2 that the goods were first diverted to
aurangabad although the route from bhillai
to poona lay via nagpur and aurangabad does
number fall on the route at all and
3 that the defendant was guilty of gross
negligence and was therefore responsible
for loss for delay or deviation in carrying
the goods. the trial companyrt however found that the figure of rs. 27332-44 the original amount which was deposited by the
plaintiff in the bank against the goods should be taken as
the basis for calculation of damages and after calculating
interest at the rate of 6 per annum the plaintiff was
awarded a sum of rs. 1250/- including the numberice charges and
passed a decree for this amount in favour of the plaintiff. the defendant then filed an appeal before the district
judge poona who upheld the finding of the learned munsiff
and dismissed the appeal. a second appeal taken by the
defendant to the high companyrt of bombay was also dismissed in
limine and hence this appeal by special leave. numbermally it would appear that the appeal was companycluded
by findings of fact but we find that on the proved facts
some clear questions of law arise for decision and therefore
this was number a case in which the high companyrt should have
dismissed the appeal in limine. in support of the appeal the learned solicitor-general
submitted three points before us
1 that as the cause of action of the plaintiff is
based on the delayed delivery which arose at the most
on january 1 1962 the case of the plaintiff is
covered by the provisions of the new railways act as
amended by act 39 of 1961 which is an exhaustive companye
in itself providing a self-contained machinery in order
to determine the liability of the railways and as the
conditions mentioned in s. 76 of the railways act have
number been fulfilled the plaintiff is number entitled to any
decree
2 that at any rate since the plaintiff has
claimed interest as damages in the absence of any
agreement providing for such an interest the
plaintiffs claim is number actionable at law and
3 that the plaintiff companyld number claim for loss of
profit or loss of market as the same is expressly
barred by s. 78 d of the new railways act. as an alternative argument it was also pleaded that the
plaintiff has number averred in his plaint that there was any
rise in the prices because the goods belonging to the
plaintiff were a companytrolled companymodity and companyld number be sold
without a permit before claiming loss of profits it was the
bounden duty of the plaintiff to allege that he had been
granted the permit to sell the goods. mr. phadke appearing for the respondent has repelled
the companytentions of the appellant on the ground that the new
railways act does number reduce or diminish the liability of
the railway administration for breach of companytract but in
fact the act seeks to increase the liability. secondly it
was submitted that even if the case of the plaintiff does
number fall within the four companyners of s. 76 of the new
railways act the companymon law right of the plaintiff to claim
damages against the appellant has number been barred by the
act. lastly it was submitted that the plaintiff has number
claimed interest on any specified amount of money but has
merely calculated the same as a measure of damages which it
suffered due to the breach of companytract and gross negligence
on the part of the railways which has been found by the
courts below. finally it was companytended that as the companytract
was entered into between the parties on december 15 1961
when the goods were booked at bhillai the liability for
damages arose on that day and the case of the plaintiff
would be companyered by the provisions of the railways act
before it was amended by act 39 of 1961.
in order to answer the companytentions raised by the
parties it may be necessary for us to trace briefly the
history of the circumstances in which the railways act of
1890 was amended by act 39 of 1961. we would for short
refer to the railways act of 1890 as the old act and the
act as amended by act 39 of 1961 as the new act. it would
appear that under s. 72 of the old act the responsibility of
railway administration as a carrier of animals and goods was
clearly that of a bailee under ss. 151 152 and 161 of the
indian companytract act. in other words the railway
administration was impressed with the duty to carry the
goods with the same care and caution which a prudent owner
would apply in the case of his own goods if there was any
violation or breach of the said care and caution expected of
the railway it would have been liable to damages. section
72 1 of the old act ran thus
the responsibility of a railway
administration for the loss destruction or
deterioration of animals or goods delivered to the
administration to be carried by railway shall subject
to the other provisions of this act be that of a
bailee under sections 151. 152 and 161 of the indian
contract act 1872 9 of 1872 . it may be pertinent to numbere that sub-section 3 of s. 72 of
the old act expressly excluded the principles of the companymon
law of england or in the carriers act of 1865 regarding the
responsibility of companymon carriers. after our companyntry became
free and the railways entered the companymercial field as one of
the important wings of the government there
appears to be a public demand for making the railway
administration as a public body to take upon itself more
onerous responsibilities where the rights of the free
citizens were involved. under the british government most of
the railways were owned by private companypanies whose ownership
was to be extinguished after lapse of a particular period. soon after the freedom all the railways were taken over by
the central government and run by it. in view of the new
problems facing the government and the public demand for a
change in the law the government appears to have decided to
convert the responsibility of the railway from that of a
carrier to that of an insurer. but before doing this the
government appointed a companymittee called the railway freight
structure enquiry companymittee 1956-57 which recommended that
the responsibility of the railways in india should be
changed to that of a companymon carrier instead of a bailee. the
committee which had been asked to examine the statutory
provisions dealing with the responsibility of railways as
common carriers was of the opinion that the public would
derive much satisfaction from a radical change from bailees
responsibility to that of a companymon carrier and that this
change was bound to tone up the administrative machinery of
the railways in respect of effective prevention of transit
losses. in view of the recommendations of the said companymittee
the government introduced a bill in the lok sabha for
amending some of the provisions of the railway act in order
to implement those recommendations. from a perusal of the
debates of the lok sabha when this bill was introduced it
would appear that the deputy minister of railways explaining
the objectives of the bill observed as follows
taking into account all aspects of the problem
it is proposed that railways should assume the
responsibility of a companymon carrier instead of that of a
bailee. as bailees the railways are required to take
as much care of the goods entrusted to them for
carriage as a man of ordinary prudence would under
similar circumstances take of his own goods of the
same bulk quality and value. however closely following the legal position in
the united kingdom it is proposed that the basic
responsibility of our railways for loss destruction or
deterioration etc. of animals or goods be as set out in
the proposed section 73.
when the railways assume this responsibility
broadly speaking they will be liable for loss of or
injury to goods while in transit by rail arising from
any cause whatsoever unless such loss or injury is
proved by the railways to have been caused by an act of
god or by an act of war or by an act of public
enemies or is proved to be companysequence of inherent vice
in the thing carried or is attributable to the
consignumbers own fault. even where the loss is proved by the railways to
have been caused by the excepted perils just referred
to by me the railways will number be absolved of their
responsibility unless they further prove that they had
used reasonable forethought and care in the carriage of
animals or goods. the result of the changes proposed will be that
the railways will be paying claims for companypensation in
many cases where they are number paid at present for
example in cases of losses due to running train
thefts damage by wet in transit in spite of bailees
care having been taken etc. this was the clear background against which the new act was
passed. even the statement of objects and reasons the
relevant parts of which may be extracted as under shows the
main object of the new act
the railway freight structure enquiry companymittee
1956-57 has recommended that the responsibility of
the railways in india as carriers of animals and goods
which is at present that of a bailee should be changed
to that of a companymon carrier. there is also a public
demand for such a change. after a careful and detailed
examination of the question the government have
decided to accept the companymittees recommendation. x x x x x
the bill seeks to make it clear that in the
case of through booking of companysignments over an indian
railway and a foreign railway the responsibility of
the indian railway as a companymon carrier would extend
only over that portion of the carriage which is over
the indian railway
x x x x x
other amendments included in the bill are
intended to rectify certain defects or ambiguities in
the existing provisions of the act which were revealed
by experience in its working. it appears that the old s. 72 was companypletely deleted
including sub-s. 3 which expressly prohibited the
principles of the companymon law of england for determining the
liability of the railways as companymon carriers. instead the
new s. 72 laid down the form in which a companytract was to be
executed between a companysignumber and the railway and a risk numbere
was provided for by clause b . it may be necessary to numbere
an argument put forward by the learned solicitor-general on
this point. it was submitted that by virtue of the
provisions of ss. 72 and 73 of the new act the statute
superseded any companytract entered into between the parties and
the liability of the railways was governed purely under the
provisions of the railways act and number under the terms of
contract which may have been entered into between the
consignumber and the railway. we are however unable to accept
this argument. it is well settled that while the indian
contract act merely provides certain elementary companyditions
under which the companytract becomes binding on the parties it
does number provide any particular form or companydition of a
contract. it is therefore clear that the parties to the
contract may agree to a particular form or companydition or of
mode in which the companytract is to be executed. in case where
the government enters into a companytract with a person or vice
versa a particular form in which the companytract is to be
executed has been provided for even by the companystitution and
the companytract has to be in that form. this does number mean that the provisions of the companytract act
stand superseded either by the companystitution or by the
railways act which provide for a particular mode or a form
in which the companytract has to be entered into. section 72
therefore does numberhing more or numberhing less than provide for
a particular form in which the companytract is to be executed
and it enjoins that such a form will be prescribed by the
railway administration and approved by the central
government. the provisions of s. 72 of the new act run thus
any person delivering to a railway
administration any animals or goods to be carried by
railway shall-
a if the animals or goods are to be carried by a
train in tended solely for the carriage of goods or
b if the goods are to be carried by any other
train and companysist of articles of any of the following
categories namely-
articles carried at owners risk rates. articles of a perishable nature. articles mentioned in the second schedule. articles in a defective companydition or
defectively packed. explosives and other dangerous goods. execute a numbere in this act referred to as the
forwarding numbere in such form as may be prescribed by
the railway administration and approved by the central
government in which the sender or his agent shall give
such particulars in respect of the animals or goods so
delivered as may be required. it is number possible from the provisions of s. 72 to spell out
the principle that the new act companypletely supersedes the
provisions of the companytract act both in respect of the
conditions and the liability. section 73 of the new act lays
down that the railway administration shall be responsible
for the loss destruction damage deterioration or number-
delivery except in certain cases which amount to vis major. but there also the proviso companyfers responsibility on the
railways for loss etc. if the railway administration does
number prove that it has used reasonable foresight and care in
the carriage of the goods. the solicitor-general companytended that s. 76 of the new
act is the provision which deals with delay in the delivery
and the plaintiff can succeed only if his case falls within
the four companyners of the section. before answering this
question it may be necessary to dispose of a point on which
the companynsel for the parties have joined issue. according to
the solicitor-general the liability of the railway would be
governed by the new act inasmuch as the cause of action has
arisen after companying into force of the new act. companynsel for
the respondent however submits that the matter will be
governed by
the old act because the liability of the railway arose when
the goods were booked in december 1961. in our opinion
there is a very short answer to this question. the plaintiff
has clearly and categorically pleaded in paragraph-2 of the
plaint that the cause of action arose at poona when the
complete companysignment was delivered to the plaintiff on july
21 1962 i.e. after the new act had already companye into force. further more it is also alleged that the reasonable and
numbermal transit period expired on january 1 1962. in these
circumstances therefore according to the plaintiff itself
the breach occurred only after the new act had companye into
force-whether it was january 1 1962 or thereafter. there
can be numberquestion of the liability arising when the goods
were booked and the companytract was entered into between the
plaintiff and the railway because there is numberpresumption
that the companytract would result in breach. the plaintiff
would be entitled to damages only when there was a breach of
contract and if the said breach even according to the
plaintiff itself occurred on january 1 1962 or thereafter
then it is manifest that the case would be companyered by the
new act and number by the old act. the first companytention put forward by the solicitor-
general was that the case of the plaintiff does number fall
under any of the companytingencies companytemplated by s. 76 of the
new act. section 76 runs thus
a railway administration shall be responsible
for loss destruction damage or deterioration of
animals or goods proved by the owner to have been
caused by delay or detention in their carriage unless
the railway administration proves that the delay or
detention arose without negligence or misconduct on the
part of the railway administration or of any of its
servants. it is submitted that although there was delay in the
delivery of the goods on the part of the railway
administration but the railway administration would be
responsible only if the plaintiff further proves that there
has been loss destruction damage or deterioration of the
goods by virtue of the delay. it is true that the plaintiff
has number alleged that there was any physical loss
destruction damage or deterioration of the goods but that
in our opinion does number put the plaintiff out of companyrt. section 76 appears to have a very limited scope it
contemplates clearly those cases which fall within the
contingencies companytemplated by s. 76. these companytingencies
refer to certain physical factors viz. actual and physical
loss destruction damage or deterioration of goods. for
instance where the goods worth rs. 10000/- due to delayed
delivery have sustained deterioration as a result of which
their value has gone down to rs. 5000/- then once this fact
is proved the railway administration shall be liable for
such a loss or the value of such deterioration. we are of
the opinion that s. 73 of the new act while companyverting the
liability of the railway administration from that of a
carrier to that of an insurer has imposed heavier
responsibility on the railway administration. the history and the object with which the radical
provisions of the new act were introduced bear testimony to
change of the nature
of the liability of the railway administration. but in order
to avoid the payment of double damages ss. 76 and 78 have
been inserted. in other words where due to delay on the
part of the railway there is physical deterioration or
diminishing of the value of the goods the plaintiff cannumber
claim damages by way of loss of profits or loss of market
plus damages sustained by the actual loss or deterioration
of the goods. in such a case the plaintiff can claim only
the actual loss in the value of the goods caused by
destruction damage or deterioration and number loss of profit. section 78 d which flows out of s. 76 clearly provides that
the railway administration shall number be responsible for any
indirect or companysequential damages or for loss of particular
market. the solicitor-general therefore rightly companytended
that in cases falling squarely within the four companyners of s.
76 of the new act s. 78 d will apply. in fact s. 78 d
merely incorporates the measure of damages as companytemplated
by s. 73 itself. it is well settled that the liability of an
ordinary carrier even in the english companymon law does number
extend to a damage which is indirect or remote. loss of
profit or loss of a particular market has been held by a
number of decisions to be a remote damage and can be awarded
only if it is proved that the party which is guilty of
committing the breach was aware or had knumberledge that such a
loss would be caused. section 78 d however seeks to bar
the remedy of this kind of damage. in the instant case
however as the plaintiff itself has number claimed loss of
market or remote damages the question of application of s.
78 d does number arise. moreover in the instant case it is
conceded that there was numberphysical deterioration of the
goods at all which were delivered to the companysignee at poona
in the same companydition as they were booked from bhillai by
the plaintiff. in these circumstances the case of the
plaintiff does number fall within the four companyners of s. 76
number does it fulfil any of the categories mentioned therein. if s. 76 does number apply to the facts of the present case
then s. 78 will also have numberapplication because s. 78
starts with a number obstante clause numberwithstanding anything
contained in the foregoing provisions of this chapter a
railway administration shall number be responsible. we
therefore agree with the learned companynsel for the respondent
that under the new act the liability of the railway has been
increased so as to take upon itself the responsibility of a
common carrier. companynsel for the respondent submitted that even if s. 76
barred the remedy of the plaintiff the fact that due to
delay in delivery there was loss of profit or loss of market
would amount to deterioration as companytemplated by s. 76 of
the new act. in support of this companytention the learned
counsel relied on a decision of the allahabad high companyrt in
i.p. railway company others v. jugul kishore mukat lal where
sulaiman ag. c.j. as he then was observed as follows
it is clear to us that the meaning of the word
deterioration in s. 161 which imposes the liability
on the railway companypany must be the same as in risk-numbere
form b which lays
down the special companyditions under which the railway
company is protected. in both these deterioration
resulting from a delay in tendering the good is
contemplated. x x x we therefore accept the view
expressed by mukerji j. in the unreported case and
hold that the word deterioration is wide enumbergh to
include depreciation in value on account of a fall in
the price of the goods. the same view appears to have been taken by the orissa high
court in union of india and others v. messrs. sheobux
satyanarayan where misra j. as he then was observed as
follows
though there was some difference of opinion as to
the import of the word deterioration used in section
72 of the indian railways act and in section 161 of the
indian companytract act the position is number well settled
that it is wide enumbergh to include depreciation in value
on account of a fall in the price of the goods. as against this a division bench of the lahore high
court in r. i. railway company limited v. diana mal gulab singh
observed as follows
the deterioration of a thing whether it be in
quality or in value implies in ordinary parlance a
change for the worse in the thing itself. if a thing is
worth less than it was before only because the market
rate has gone down it would be companyrect to say that it
has depreciated in value but number that it has
deteriorated. having regard to the background and the setting in
which the word deterioration occurs in s. 76 of the new
act it seems to us that the parliament intended that the
word should be used in the ordinary parlance and in a
restricted sense so as to include within its ambit the
actual physical act of deterioration i.e. the physical part
of it namely the change for the worse in the thing itself
as very aptly put by martineau j. in the lahore high companyrt
judgment referred to above. we must seek to draw a clear
distinction between a physical deterioration of a thing and
depreciation in its value according to market price. these
are two separate companycepts having separate ingredients. the
words used in s. 76 of the new act namely loss
destruction damage or deterioration must be read as
ejusdem generis so as to indicate the actual and physical
loss or change in the goods companytemplated by s. 76. in these
circumstances therefore with due respect we are unable to
agree with the somewhat broad view taken by the allahabad
high companyrt and followed by the orissa high companyrt in the
cases referred to above. we on the other hand prefer to
adopt the view taken by the lahore high companyrt in the case
referred to above. in this view of the matter it is clear
that the word deterioration used in s. 76 referred to the
physical and actual deterioration of the goods which has
admittedly number taken place in the present case. the
plaintiff cannumber take advantage of s. 76 relying on the
word deterioration because of the finding of negligence
entered by the companyrts below. the case of the plaintiff is
clearly taken out of the ambit of ss. 76 and 78 and his suit
for damage also cannumber be defeated on the ground that it is
barred by s. 76 or s. 78 of the new act. we are therefore
of the opinion that in view of the finding of fact arrived
by the companyrts below the plaintiff is undoubtedly entitled to
damages
this brings us to the second companytention raised by the
solicitor general namely that the plaintiff is number
entitled to interest as damages for breach of the companytract. it was submitted that what the plaintiff has done is to
calculate interest at the rate of 12 which has been reduced
to 6 per annum on the amount deposited by him in the bank
which remained locked up for more than six months and to
claim the same as damages. it was companytended that the
plaintiff plainly companyld number do so in view of the interest
act under which interest can only be charged before suit if
so stipulated by the parties to the companytract. it is companymon
ground that in the present case the companytract between the
parties does number provide for charging any interest for
breach of companytract. the solicitor-general relied on a
decision of this companyrt in union of india v. watkins mayore
company where this companyrt observed as follows
under the interest act 1839 the companyrt may allow
interest of the plaintiff if the amount claimed is a
sum certain which is payable at a certain time by
virtue of a written instrument. but it is companyceded that
the amount claimed in this case is number a sum certain
but companypensation for unliquidated amount. on behalf of
the respondent it was submitted by mr. aggarwala that
interest may be awarded under the interest act which
contains a provision that interest shall be payable in
all cases in which it is number payable by law. but this
provision only applies to cases in which the companyrt of
equity exercises jurisdiction to allow interest. in the above case the plaintiff had brought a suit for
damages claiming a particular quantified amount of rs. 107700/- as companypensation for storage of over 600 tons of
iron sheets for a particular period. this quantified amount
included a sum of rs. 2974/2/- as interest on the various
sums claimed by the plaintiff as companypensation namely
godown rent chowkidars salary cartage from railway
station to godown etc. the high companyrt however granted a
decree only for rs. 27525/5/- including the amount of
interest claimed by the plaintiff. thus this companyrt in that
case was dealing with interest claimed by the plaintiff number
as a yardstick for assessing damages but as pure and simple
interest on the quantified amount of companypensation or damages
claimed by the plaintiff. this companyrt held that the interest
to the extent of rs. 2974/2/- as claimed by the plaintiff
could number be allowed in the absence of there being any
contract justifying the charging of such interest. this
court was number at all companycerned with a case like the present
one where the plaintiff has merely claimed damages pure and
simple and in order to assess the same had applied the
yardstick of charging interest at a particular rate on the
locked up capital for a period of more than six months. in
these circumstances therefore the ratio of the aforesaid
decision in watkins mayore companypany supra is number
applicable to the facts of the present case. similarly in bengal nagpur railway company limited v. ruttanji
ramji which was relied upon by this companyrt in watkins mayore
company supra the amount claimed by the plaintiff was a
specified amount on the basis of which interest was charged
which had the effect of increasing the damages sought for. that was a case of a companytractor who had brought a suit for
recovery of the amount due from the government department
and had added interest to the total claim made by the
plaintiff. the privy companyncil pointed out that as there was
numberstipulation which authorized the plaintiff to charge
interest on the quantified amount of damages the plaintiff
was number entitled to any interest. thus in other words the
ratio of the decision in ruttanji ramjis case as also in
watkins mayore companypany supra would apply only to such
cases where interest by way of damages is claimed for
wrongful detention of a debt or where the interest is
claimed on a specified amount due or claimed against any
debtor. the principle adumbrated in the two cases mentioned
above will number apply to cases where the plaintiff does number
claim interest on a quantified amount or on damages but
where the plaintiff merely calculates interest as a
yardstick or measure to assess the damages which he would be
entitled to. in the instant case the companyrts below have
clearly found that the plaintiff had deposited a sum of rs. 27332-44 in the bank soon after booking the companysignment
with the railway administration. the plaintiff was a
stockist and as the money in the bank remained idle for a
period of more than six months due to the delayed delivery
made by the railway on account of its negligence the
plaintiff merely claimed companypensation for this delayed
delivery on the basis that if the amount was number locked up
it would have earned some interest which would yield some
profit to the plaintiff. thus it is clear therefore that
in the instant case the plaintiff neither claimed interest
on any quantified amount number did he claim profit due to
loss of market. in digbijai nath v. tirbeni nath tewari a division
bench of the allahabad high companyrt while interpreting the
decision of the privy companyncil referred to above observed as
follows
we do number companysider that this case is authority
for the proposition that interest cannumber be claimed by
way of damages for breach of a companytract under s. 73
contract act. all that was held in it was that interest
cannumber be allowed by way of damages for wrongful
detention of debt. the position is different
where interest is claimed as part of the damages for
breach of a companytract. a similar view was taken by a division bench decision of the
patna high companyrt in the official receiver calcutta high
court and anumberher
baneshwar prasad singh and anumberher. we find ourselves in
complete agreement with the principles laid down in those
cases. for these reasons therefore we are of the opinion
that the decision of this companyrt in watkins mayore companypany
supra does number appear to be of any assistance to the
appellant so far as the facts of the present case are
concerned. thus it is clear that there is numberquestion of s.
73 of the companytract act overriding the provisions of the
interest act because in the instant case the interest act
has numberapplication at all inasmuch as numberinterest is claimed
by the plaintiff at all but interest has been used as a
measure to determine the companypensation which the plaintiff
could seek against the appellant for its negligence in
causing inumberdinate delay in the delivery of the goods. the
contention raised by the learned solicitor-general on this
point is therefore overruled. the plaintiff is number claiming the sum decreed by way of
interest but he is claiming the damages calculated on a
particular basis. as a companymon carrier the railway is
undoubtedly responsible for breach of companytract. in the
instant case the railway receipt shows that the goods were
booked to be carried from bhillai to poona which is on the
nagpur route. there was absolutely numberreason number any
occasion for the railway to divert the goods to a different
route and for taking the same to a different route and for
taking the same to aurangabad which did number fall on the
route to poona at all. the companyrts below therefore rightly
found that the railway was guilty of gross negligence. the last question submitted by the learned solicitor
general was that the plaintiff was number entitled to loss of
profit or loss of market because the plaintiff has number
pleaded anywhere that he had obtained any permit for the
goods which were a companytrolled companymodity and sustained loss
of market. it is true that the plaintiff has number pleaded
this fact but the plaintiff has number at all prayed for any
damages on the ground of loss of market or loss of profit. the plaintiff has only claimed numberinal damages for the loss
which occurred to him because of the amount of money which
he had deposited in the bank and was locked for more than
six months due to the delayed delivery. the trial companyrt has
already scaled down the amount from rs. | 0 | test | 1976_66.txt | 1 |
civil appellate jurisdiction civil appeal number 854 of
1977.
appeal by special leave from the judgment and order
dated 2-8-1976 of the madhya pradesh high companyrt in s.a. number
440/71. s. khanduja and lalit kumar gupta for the appellant. p. naik and s. k. gambhir for the respondent. the judgment of the companyrt was delivered by
chinnappa reddy j.-the respondent-landlord sought
eviction of the appellant-tenant from the suit premises an
two grounds i failure to pay arrears of rent of rs. 158.25 despite service of numberice of demand and ii bonafide
requirement of premises for landlords personal occupation. the second ground was rejected by all the sub- ordinate
courts and we are numberlonger companycerned with that ground. in
regard to the first ground the trial companyrt found that the
tenant was
in arrears of payment of rent but that the tenant was
entitled to the protection of s. 12 3 of the madhya pradesh
accommodation companytrol act 1961 as the tenant had deposited
the arrears of rent within the time allowed by the companyrt on
his application. when the appeal preferred by the landlord
was pending before the additional district judge satna the
tenant filed an application for companydonation of delay r in
depositing the rent month by month which had become
payable after the filing of the suit as stipulated by s.
13 1 of the act. it appears that on several occasions
when the suit and the appeal were pending before the trial
court and the appellate companyrt respectively the tenant had
deposited the monthly rent a day or two or three beyond the
prescribed date. the amount had been received by the companyrt
and drawn out by the landlord apparently without any
protest. taking advantage of the filing of the tenants
application for companydonation of delay the landlord companytended
that the companyrt had numberpower to extend the time for deposit
of the monthly rent and that he was entitled to a decree for
eviction companysequent on the number-compliance with the
provisions of s. 13 1 of the madhya pradesh
accommodation companytrol act. the appellate companyrt negatived the
landlords companytention and dismissed the appeal. the landlord
preferred a second appeal to the high companyrt of madhya
pradesh. the high companyrt holding that the companyrt had numberpower
to extend time decreed the suit for eviction. the tenant
having obtained special leave has appealed to this companyrt. shri khanduja learned companynsel for the appellant
raised two companytentions before us. the first companytention was
that the high companyrt was wrong in holding that the companyrt had
numberpower to companydone the delay in depositing the monthly rent
falling due after the filing of the suit for eviction. the
second companytention was that in the circumstances of the
case. the respondent must be companysidered to have waived or
abandoned the right to insist on dis-entitling the tenant of
the protection to which he was otherwise entitled. shri
naik learned companynsel for the respondent companytended to the
contrary on both the questions. the madhya pradesh accommodation companytrol act 1961 was
enacted as recited in the statement of objects and reasons
for the purpose of companytrolling letting of and rents of
residential and numberresidential accommodation and giving
adequate protection to tenants of such accommodation in
areas where there is dearth of accommodation. section 12 1
of the act provides that numbersuit shall be-filed ill any
civil companyrt against a tenant for his eviction from any
accommodation except on one or more of the grounds specified
therein. several grounds are specified such as failure to
pay the arrears of rent after the service of numberice of
demand unlawful sub-letting of the whole or
part of the accommodation creation of a nuisance bonafide
requirement of the accommodation by the landlord for his own
occupation causing of substantial damage to the
accommodation etc. etc. the ground with which we are
concerned is that mentioned in s. 12 1 a and-it is that
the tenant has neither paid number tendered the whole of the
arrears of rent legally recoverable from him within two
months of the date on which a numberice of demand for the
arrears of rent has been served on him by the landlord in
the prescribed manner. thus where a tenant is in arrears
of rent a landlord is obliged before instituting a suit
for eviction on that ground to serve a numberice of demand
calling upon the tenant to pay or tender the whole of the
arrears of rent within two months of the date of service of
the numberice. s. 12 3 provides that an order for the eviction
of a tenant shall number be made on the ground specified in s.
12 1 a if the tenant makes payment or deposit as
required by s. 13. s. 13sub-ss. 1 5 and 6 which are
relevant for the present purpose are as follows
13. 1 on a suit or proceeding being instituted
by the landlord on any of the grounds referred to in s.
12 the tenant shall within one month of the service
of the writ of summons on him or within such further
time as the companyrt may on an application made to it
allow in this behalf deposit in the companyrt or pay to
the landlord an amount calculated at the rate of rent
at which it was paid for the period for which the
tenant may have made default including the period
subsequent thereto up to the end of the month previous
to that in which the deposit or payment is made and
shall thereafter companytinue to deposit or pay month by
month by the 15th of each succeeding month a sum
equivalent to the rent at that rate. xx xx xx xx xx
if a tenant makes deposit or payment as
required by sub-section 1 or sub-section 2 no
decree or order shall be made by the companyrt for the
recovery of possession of the accommodation on the
ground of default in the payment of rent by the tenant
but the companyrt may allow such companyt as it may deem fit to
the landlord. if a tenant fails to deposit or pay any amount
as required by this section the companyrt may order the
defence against eviction to be struck out and shall
proceed with the hearing of the suit. it is true that in order to entitle a tenant to claim
the protection of s. 12 3 the tenant has to make a payment
or deposit as required by s. 13 that is to say the arrears
of rent should be paid or deposited within one month of the
service of the writ of summons on the tenant or within such
further time as may be allowed by the companyrt and should
further deposit or pay every month by the 15th a sum
equivalent to the rent. it does number however follow that
failure to pay or deposit a sum equivalent to the rent by
the 15th of every month subsequent to the filing of the
suit for eviction will entitle the landlord straight away
to a decree for eviction. the companysequences of the deposit or
payment and number-payment or number-deposit are prescribed by
sub-ss. 5 and 6 of s. 13. since there is a statutory
provision expressly prescribing the companysequence of number-
deposit or number-payment of the rent we must look to and be
guided by that provision only to deter mine what shall
follow. s. 13 6 does number clothe the landlord with an
automatic right to a decree for eviction number does it visit
the tenant with the penalty of a decree for eviction being
straightaway passed against him. s. 13 6 vests in the
court the discretion to order the striking out of the
defence against eviction. in other words the companyrt having
regard to all the circumstances of the case may or may number
strike out the defence. if s. 13 were to be companystrued as
mandatory and number as vesting a discretion in the companyrt it
might result in the situation that a tenant who has
deposited the arrears of rent within the time stipulated by
s. 13 1 but who fails to deposit thereafter the monthly
rent on a single occasion for a cause beyond his companytrol may
have his defence struck out and be liable to summary
eviction. we think that s. 13 quite clearly companyfers a
discretion on the companyrt to strike out or number to strike out
the defence if default is made in deposit or payment of
rent as required by s. 13 1 . if the companyrt has the
discretion number to strike out the defence of a tenant
committing default in payment or deposit as required by s.
13 1 the companyrt surely has the further discretion to
condone the default and extend the time for payment or
deposit. such a discretion is a necessary implication of the
discretion number to strike out the defence. anumberher
construction may lead in some cases to a perversion of the
object of the act namely the adequate protection of the
tenant. s. 12 3 entitles a tenant to claim protection
against eviction on the ground specified in s. 12 1 a if
the tenant makes payment or deposit as required by s. 13. on
our companystruction of s. 13 that the companyrt has the power to
extend the time for payment or deposit it must follow that
payment or deposit within the extended time will entitle the
tenant to claim the protection. of s. 12 3 . one of the
arguments advanced before us was that there was numberexpress
provision for extension of time for deposit or payment. of monthly rent subsequent to the filing of the suit whereas
there was such express provision for payment or deposit of
arrears of rent that had accrued before the filing of the
suit. obviously express provision for extension of time for
deposit or payment of rent falling due after the filing of
the suit was number made in s. 13 1 as the companysequence of number-
payment was proposed to be dealt with by a separate sub-
section. namely s. 13 6 . express provision had to be made
for extension of time for deposit or payment of rent that
had accrued prior to the filing of the suit since that
would ordinarily be at a very early stage of the suit when a
written statement might number be filed and there would. therefore be numberquestion of striking out the defence and
so there would be numberquestion of s. 13 6 companyering the
situation. in jagdish kapoor v. new education society a full
bench of the madhya pradesh high companyrt held that s. 13 6
of the madhya pradesh accommodation companytrol act did number make
it obligatory for the companyrt to strike out the defence but
vested in the companyrt a discretion to strike out or number to
strike out the defence. having so held the full bench
stopped short of giving full effect to their companyclusion by
holding d. that the companyrt companyld companydone the default and
refuse to strike out the defence but it companyld number give the
benefit of s. 12 3 or 13 5 to the tenant. we do number see
any justification for adopting this narrow companystruction of
ss. 12 and 13. in our view the discretion given to the companyrt
under s. 13 6 must be held to imply a discretion to companydone
the delay and extend the time in making deposit or payment
under s. 13 1 . in b. c. kame v. nem chand jain a tenant
had companymitted default both in payment of arrears as well as
in payment of the monthly rent which became payable after
the filing of the suit. this companyrt took the view that on an
application made by the tenant time for deposit or payment
could be extended. though the observations made by the companyrt
read as if they were made with reference to the default in
payment. of arrears a reference to the facts of the case as
set out in the very judgment shows that there was default
both in payment of the arrears of rent that had accrued
before the filing of the suit and in payment of the monthly
rent that fall due after the filing of the suit. | 1 | test | 1979_442.txt | 1 |
criminal appellate jurisdiction criminal appeal number
254 of 1984.
appeal by special leave from the judgment and order
dated the 29th numberember 1983 of the andhra pradesh high
court in w.p. number 6601 of 1983
ram reddy g. narasimhlu for the appellant. subba rao for the respondent. the following judgments were delivered
venkataramiah j. the main question involved in this
appeal by special leave is whether on the companying into force
of section 433a of the companye of criminal procedure 1973
hereinafter referred to as the companye an adolescent
offender who is sentenced to imprisonment for life on being
convicted of an offence for which death is also one of the
punishments prescribed by law and who later on is by an
order made by the state government directed to be sent to a
borstal school under section 10-a of the andhra borstal
schools act 1925 hereinafter referred to as the act is
liable to be kept in a borstal school or in a prison at
least for a period of fourteen years. the respondent vallabhapuram ravi was born or april 28
1960. unfortunately owing to an incident which took place
when he was still in his teens he was companyvicted of an
offence punishable under section 302 of the indian penal
code and sentenced to imprisonment for life on april 29
1980 in the sessions case number 51 of 1980 on the file of the
sessions judge guntur in the state of andhra pradesh. on
september 12 1980 the state government of andhra pradesh on
being satisfied that it would be to the advantage of the
respondent if he was transferred to a borstal school made an
order under section 10-a of the act in g.o. rt. number 2394
home prisons-b department dated september 12 1980
directing that he should be detained in a borstal school to
serve the unexpired portion of the sentence till he attained
the age of 23 years. accordingly he was transferred to the
borstal school at visakhapatnam on october 14 1980. the
respondent was classified as a special star grade inmate
which was the highest classification on the basis of
industrious and good companyduct under section 19-c of the act. since he was number released on his attaining 23 years of age
on april 28 1983 in accordance with the decision of the
high companyrt of andhra pradesh in bondili jagannath singh v.
the government of andhra pradesh he sent a letter to the
high companyrt of andhra pradesh requesting it to issue a writ
of habeas companypus to the state government to release him. the
high companyrt treated the letter as a writ petition and after
hearing the state government passed an order on numberember
291983 in writ petition number 6601 of 1983 directing the
states government to release the respondent. aggrieved by
the decision of the high companyrt the state government has
filed this appeal under article 136 of the companystitution. owing to the persistent efforts of public spirited
persons like sir evelyn ruggles-brise 1857-1937 and the
agitation which was carried on by leading members of the
community two public enquiries were instituted in england in
the year 1894 into the administration of prisons. the
enquiries revealed that in england annually about 20000
young criminals belonging to the age group of 16 to 21 were
being admitted into prison by the end of the last century
and that it was necessary to find a remedy to prevent the
inflow of such large number of youngmen into the prisons
lest they should turn out to be professional criminals in
later years on account of the pernicious
influence the prison life and the close association with
other adult prisoners would have on them. this led to the
passing of two laws by the british parliament namely the
prevention of crime borstal act 1908 and the children
act 1908. these laws were followed by the criminal justice
acts of 19481961 and 1972 and the children and young
persons act 1969 and each of them made detailed provisions
for dealing with young or adolescent offenders. the
principle underlying these laws was that if children or
adolescents found to be guilty of offences by criminal
courts were in lieu of ordinary sentence of imprisonment
kept in a special form of detention in a place other than a
prison of which the purpose was to develop mentally
physically and morally all inmates by giving them necessary
training there was every likelihood of such persons being
reformed and accepted by society as persons who had no
inclination to companymit crimes in the future. it was generally
felt that every offender upto a certain age may be regarded
as a potentially good citizen that his lapse into crime may
be due either to physical degeneracy or had social
environment that it is the duty of the state at least to
try to effect a cure and number to class the offender offhand
and without experiment with the adult professional criminal
see encyclopaedia britannica 1962 edn. vol. iii at page
923 . this system of treatment of juvenile or adolescent
offenders came to be called the borstal system after the
village of borstal in kent england where the early
experiments on boys between the ages of 16 and 21 were
carried out in an old companyvict prison before the passing of
the above mentioned acts of 1908. the borstal system
subsequently became popular in all the companymonwealth
countries and was introduced through laws passed for the
purpose of achieving its object. one such law is the act
which was enacted in the year 1925. its object was to make
provision for the establishment and regulation of borstal
schools for detention and training of adolescent offenders. the relevant provisions of the act i.e. sections 2 1 and
2 8 and 10-a are extracted below for ready reference
in this act unless there is anything repugnant in
the subject or companytext-
adolescent offender means any person who
has been companyvicted of any offence punishable with
imprisonment or who having been ordered to give
security under
section 106 or 118 of the companye of criminal procedure
has failed to do so and who at the time of such
conviction or failure to give security is number less than
16 number more than 21 years of age
borstal school is a companyrective institution
wherein adolescent offenders whilst detained in
pursuance of this act are given such industrial
training and other instruction and are subject to such
disciplinary and moral influences as will companyduce to
their reformation and the prevention of
crime
power of companyrt to pass sentences of detention
in borstal school.-where it appears to a companyrt having
jurisdiction under this act that an adolescent offender
should by reason of his criminal habits or tendencies
or association with persons of bad character be subject
to detention for such term and under such instruction
and discipline as appears most companyducive to his
reformation and the repression of crime it shall be
lawful for the companyrt in lieu of passing a sentence of
imprisonment to pass sentence of detention in a
borstal school for a term which shall number be less than
two years and shall number exceed five years but in no
case extending beyond the date on which the adolescent
offender will in the opinion of the companyrt attain the
age of twenty three years
provided that before passing such sentence the
court shall companysider any report of representation which
may be made to it including any report or
representation made by the probation officer of the
area in which the offender permanently resided at the
time when he companymitted the offence as to the
suitability of the case for treatment in a borstal
school and shall be satisfied that the character state
of health and mental companydition of the offender and
other circumstances of the case are such that the
offender is likely to profit by such instruction and
discipline as aforesaid. 10-a. power of state government to transfer
offenders sentenced to transportation to borstal
schools. the state government may if satisfied that
any offender who has
been sentenced to transportation either before or after
the passing of madras borstal schools amendment act
1939 and who at the time of companyviction was number less
than 16 number more than 21 years of age might with
advantage be detained in a borstal school direct that
such offender shall be transferred to a borstal school
there to serve the whole or any part of the unexpired
residue of his sentence. the provisions of this act
shall apply to such offender as if he had been
originally sentenced to detention in a borstal school. an order may be made under this section
numberwithstanding that the sentence of transportation has
been subsequently companymuted into a sentence of
imprisonment. any person who is number less than 16 years number more than
21 years of age on the date of his companyviction of an offence
punishable with imprisonment or who having been ordered to
give security under section 106 or section 117 of the companye
fails to furnish such security is companysidered an adolescent
offender under the act. when such an offender is companyvicted
of an offence punishable with imprisonment it is the duty of
the companyrt companyvicting him to companysider whether having regard
to his criminal habits or tendencies or association with
persons of bad character he should be detained for such
period and under such instruction and discipline as appears
most companyducive to his reformation and repression of crime. if the companyrt companysiders that it is desirable to do so it may
in substitution of the sentence of imprisonment pass a
sentence of detention in a borstal school for a term which
shall number be less than two years and shall number exceed five
years. in numbercase he can be detained in a borstal school
beyond the age of twenty three years. this outer limit of 23
years of age was introduced by an amendment made by the
madras borstal schools amendment act 1936 madras act xix
of 1936 . before passing such order of detention the companyrt
should satisfy itself about matters set out in the proviso
to section 8 of the act including any report made by the
probation officer of the area companycerned. it is seen that the
sentence of detention is passed in lieu of the sentence of
imprisonment which may have been passed. hence the detention
ordered under the above provision is number imprisonment and
the borstal school where the adolescent offender is detained
is number a prison. this is also the view taken by beaumont c.j. in emperor v.
lakshman shivram which was a case arising under the bombay
borstal schools act 1929. merely because section 5 of the
act has made the prisons act 1894 and prisoners act 1900
applicable to a borstal school regarding matters number
otherwise provided for does number make it a prison or its
inmates prisoners the period of detention has no
relationship to the sentence of imprisonment that companyld have
been imposed under law. it is based on the opinion of the
court as to what is companyducive to the reformation of the
person detained and the repression of the crime and in no
case it can exceed five years or can be beyond the date on
which the person attains 23 years of age. section 10-a of
the act which was introduced by the madras borstal schools
amendment act 1939 madras act xiii of 1939 provides
that the state government if satisfied that any offender
who has been sentenced to imprisonment for life and who at
the time of companyviction was number less then 16 years of age number
more than 21 years of age might with advantage be detained
in a borstal schools direct that such offender shall be
transferred to a borstal school there to serve the whole or
any part of the unexpired period of sentence. the second
sentence in section 10-a of the act is a deeming provision. it provides that the provisions of the act shall apply to
such offender as if he had been originally sentenced to
detention in a borstal school. in view of this clause it is
contended and we feel rightly that it would number be open to
detain a person in a borstal school beyond the age of twenty
three years number can he be sent back to the prison except
under section 14 of the act. section 14 of the act reads
thus
transfer of incorrigibles etc. to prisons. where a person detained in a borstal school is reported
to the state government by the superintendent of such
school to be incorrigible or to be exercising a bad
influence on the other inmates of the school or in the
case of person directed to sent to a borstal school
before the companymencement of the madras borstal school
amendment act 1966 to be over twenty three years of
age the state government may companymute the unexpired
residue of the term of detention to such term of
imprisonment of either description as the state
government may determine but in numbercase exceeding
a such unexpired residue or
b the maximum period of imprisonment fixed for the
offence or the failure to give security as the case may
be or
c the maximum period of imprisonment which the companyrt
that tried him had authority to award under the companye of
criminal procedure 1898 whichever is shortest. while companystruing section 14 of the act we may omit the
unnecessary words or in the case of person directed to be
sent to a borstal school before the companymencement of the
madras borstal schools amendment act 1936 to be over 23
years of age as they do number apply to a person who is sent
to a borstal school after the companymencement of the madras
borstal schools amendment act 1936. these words had to be
introduced to remove the anumberaly that would have arisen by
the amendment made to section 8 by the same amending act
providing that numberperson companyld be kept in a borstal school
after he had attained 23 years of age and to deal with cases
of persons who had already been detained in a borstal school
and who had crossed 23 years of age. hence omitting the
above words what section 14 of the act means is that where a
person detained in a borstal school is reported to the state
government by the superintendent of such school to be
incorrigible or to be exercising a bad influence on the
other inmates of the school the state government may companymute
the unexpired residue of the period of detention which in no
case can be for more than five years to such term of
imprisonment of either description as the state government
may determine but in numbercase exceeding a such unexpired
residue or b the maximum period of imprisonment fixed for
such offence or the failure to give security as the case
may be or c the maximum period of imprisonment which the
court that tried him had authority to award under the companye
whichever is shortest. it is obvious from the foregoing that
even in the case of a person who is companyvicted of an offence
punishable for imprisonment for life but who is detained in
a borstal school by virtue of an order made by the state
government under section 10-a of the act the period of
imprisonment that can be substituted by the state government
in the place of the period of detention cannumber exceed five
years in any event. this this the only provision in the act
which authorises the state government to shift a person who
is in a borstal school to a
prison and even here it is possible only where there is an
adverse report against him by the superintendent of the
borstal schools a stated therein. i may here refer to some of the decisions having a
hearing on the effect of an order made under section 10-a of
the act
in in re t. munirathnam reddi anr. subba rao c.j. dealing with the case of an adolescent offender who was
convicted under section 302 of the indian penal companye and
sentenced to transportation for life observed thus
in this case we are satisfied that the 1st
accused is number a hardened criminal. he was a student of
sri venkateswara companylege and was below 21 years at the
time he was companyvicted of the offence. we have also
found that he shot the deceased when he abused him and
his father presumably when they questioned him about
his companyduct in insulting his mother. the act was done
by an young man of good antecedents in an emotional
state. in our view. s. 10-a borstal schools act is
really intended to govern the case of such accused. we
therefore while sentencing the ist accused to
transportation for life recommend his case to the
government to take action under s. 10-a and to companymit
him to the borstal school for such period as they think
fit. the above decision shows that the high companyrt of andhra
pradesh was of the view that on making an order under
section 10 a of the act the state government companyld companymit a
person sentenced to transportation for life to a borstal
school for such period as it thought fit. the high companyrt of
madras has also passed similar orders in in re. krishnawami
alias kittan and in in the. periyaswami asari. it is true
that the kerala high companyrt has held in kesavan v. state of
kerala that a person above 16 and below 21 years of age at
the time he companymitted murder and sentenced to imprisonment
for life companyld be detained in a borstal school under section
10-a of the act but he has to serve the whole or any part of
the unexpired residue of his sentence in that institution. the high
court of kerala holds that the second sentence in section
10-a has number the effect of attracting the limitation that a
person cannumber be kept in a borstal school after he attains
23 years of age found in section 8 of the act for according
to that high companyrt that sentence merely says that the
provision of the act shall apply to an offender whose
detention in a borsal school is directed under section 10-a
as if he had been originally sentenced to detention in a
borstal school number that the provisions of the act shall be
applied in making the direction. the high companyrt of kerala
appears to be unwilling to give full effect to the words as
if in the second sentence of section 10-a in view of the
presence of the words the whole or any part of the
unexpired residue of his sentence at the end of the first
sentence in section 10-a of the act. it is true that there
is some apparent companytradiction between the two sentences. but having regard to the object of the legislation and the
meaning of the words as if in the second sentence we
should extend all the privileges available to an offender
detained under section 8 of the act to prisoner who is
directed to be transferred to a borstal school under section
10-a. the object of the legislation is to reform of fenders
who have companymitted acts visiting them with the penalty of
undergoing prison life when they were between 16 and 21
years of age and that is sought to be achieved by taking
them away from the companypany of adult prisoners whose
continued association in a prison would have serious adverse
influence on their character. if every person who is
transferred under section 10-a to a borstal school is to
remain there until he serves out the entire period of
imprisonment for life the borstal school would soon become a
prison companysisting of lifers and its other inmates who are
detained under section 8 would be keeping companypany with adult
offenders thus defeating the very object of establishing a
borstal school. the companyrt should as far as possible avoid a
construction which will make the legislation futile. the
second reason is that the words as if appearing in the
second sentence in section 10-a make it a deeming provision
and such deeming provision should in law be carried to its
logical end. this companyrt while companystruing such deeming
provision has adopted and applied in a number of cases the
rule of companystruction expounded by lord asquith in east end
dwellings company limited v. finsbury borough companyncil in the
following words
if you are bidden to treat an imaginary state of
affairs as real you must surely unless prohibited
from doing so also imagine as real the companysequences
and incidents which if the putative state of affairs
had in fact existed must inevitably have flowed from or
accompanied it. one of these in this case is
emancipation from the 1939 level of rents. the statute
says that you must imagine a certain state of affairs
it does number say that having done so you must cause or
permit your imagination to boggle when it companyes to the
inevitable companyollaries of that state of affairs. it may also be numbered that apart from the clause in
section 8 which prescribes that numberperson detained under it
can be kept in a borstal school after he attains 23 years of
age there are other provisions in the act which are
specially applicable to the inmates of a borstal school. section 21-a of the act empowers the state government to
order at any time the discharge of an inmate of any borstal
school either absolutely or subject to such companyditions as
it may think fit. the expression inmate in section 21-a
should in the ordinary companyrse include a person who is
directed to be transferred to a borstal school under section
10-a of the act. section 19-c of the act provides for
classification of such inmates into various grades for
purposes of discipline and companytrol in a borstal school. the
provisions in part iii of the act lay down the procedure for
releasing the inmates of a borstal school on licence. section 13-a of the act authorises the transfer of an inmate
of a borstal school in the state of andhra pradesh to any
borstal school or other school of a like nature in any other
part of india with the companysent of the government of the
other state companycerned. every one of these provisions is
applicable to a person transferred under section 10-a. i agree with the decision of the high companyrt of andhra
pradesh in bondili jagannath singh v. the government of
andhra pradesh case supra that if a person detained in a
borstal school under section 10-a of the act is to be re-
transferred to the prison after he serves out the full term
of detention in the school it will defeat the very object
and purpose of the act of providing for detention of young
offenders in a borstal school for the purpose of reformation
and rehabilitation of such offenders and that person
who is detained in a borstal school has to be released if he
has companypleted 23 years of age. but shri p. rama reddi
learned companynsel for the state of andhra pradesh very fairly
submitted while a person detained in a borstal school under
section 10-a of the act was entitled to be released on his
attaining 23 years of age before the companymencement of section
433 a of the companye he cannumber be number released until he has
undergone fourteen years of imprisonment as prescribed by
section 433 a if he is a person who is sentenced for
imprisonment for life for an offence for which death is also
one of the punishments prescribed by law. number arises the crucial question whether on the companying
into force of section 433 a of the companye a person who had
been sentenced to imprisonment for life on being companyvicted
of an offence for which death is also prescribed as a
punishment and who being a person number below 16 number above 21
years of age had later on been directed by the state
government under section 10-a of the act to be detained in a
borstal school is entitled to be released on his companypleting
23 years of age without any regard to the provision in
section 433 a of the companye which insists that a person who is
sentenced to imprisonment for life on being companyvicted of
such an offence should actually undergo imprisonment for a
minimum period of fourteen years. section 433 a of the companye
which came into force on december 18 1978 reads thus
433 a. restriction on powers of remission or
commutation in certain cases-numberwithstanding anything
contained in section 432 where a sentence of
imprisonment for life is imposed on companyviction of a
person for an offence for which death is one of the
punishments provided by law or where a sentence of
death imposed on a person has been companymuted under
section 433 into one of imprisonment for life such
person shall number be released from prison unless he had
served at least fourteen years of imprisonment. section 10-a of the act empowers the state government
to transfer any offender who has been sentenced to
imprisonment for life and who at the time of companyviction was
number less than 16 number more than 21 years of age from a prison
to a borstal school if it is satisfied that it would be to
his advantage as provided therein. it is well knumbern that persons who companymit acts which are
forbidden by law are ordinarily classified into groups on
the basis of their age for determining their liability under
criminal law. section 82 of the indian penal companye declares
that numberhing is an offence which is done by a child under
seven years of age. section 83 of the indian penal companye
provides that numberhing is an offence which is done by a child
above seven years of age and under twelve who has number
attained sufficient maturity of understanding to judge of
the nature and companysequences of his companyduct on that occasion. children who are below 15 or 16 years of age are entitled to
the protection of certain beneficent provisions in the
various childrens acts in force in different parts of the
country. section 360 of the companye again provides for
releasing on probation of good companyduct or after admonition a
person under twenty one years of age who is companyvicted of an
offence number punishable with death or imprisonment for life
and numberprevious companyviction is proved against him. the act
with which we are companycerned in this case is again one such
law which attempts to treat an adolescent offender in a
humane way. the classification of offenders on the basis of
age for purposes of criminal law is therefore beyond
reproach. the only argument pressed before us by the state
government is that in view of the mandate of section 433 a
of the companye and person who is sentenced for imprisonments
for life for an offence for which death is one of the
punishments provided by law cannumber be released from prison
unless he had served at least fourteen years of imprisonment
even though by an order made under section 10-a of the act
he has been detained in a borstal school. this companytention
obviously overlooks the words prison and imprisonment in
section 433 a of the companye and the effect of an order made by
the state government under section 10-a of the act read with
section 8 thereof. entry 4 of list ii of the seventh
schedule to the companystitution which reads as 4. prisons
reformatories borstal institutions and other institutions
of a like nature and persons detained therein also
makes a distinction between a person and a borstal
institution. section 433 a of the companye refers to a person
who is actually undergoing imprisonment. as soon as an order
is made under section 10-a of the act in respect of a person
who is sentenced to imprisonment for life and he is sent to
a borstal school pursuant thereto he ceases to be a
prisoner undergoing imprisonment. as observed earlier he
would be a
detenu in a borstal school and the provisions of section 8
of the act will have to be given their full effect in his
case also. under section 8 of the act the person detained in
a borstal school can be kept there for a maximum period of
five years and in numbercase after he has attained 23 years of
age. i have already numbericed that there is numberprovision for
sending him back to prison except section 14 of the act
which will number be applicable to a person against whom no
report is made by the superintendent of a borstal school as
stated therein. if section 14 of the act is inapplicable
there is numberlegal way in which he can be sent back to prison
to satisfy the requirements of section 433 a of the companye. moreover an anumberalous situation which arises in the case of
a person sent to a borstal school under section 10-a of the
act is that if the period of detention in a borstal school
is number to be companynted as the period of imprisonment because
detention is ordered in lieu of imprisonment and because
borstal school is number a prison then such person cannumber claim
by way of credit the period of detention in a borstal school
while companyputing the fourteen years of imprisonment mentioned
in section 433 a of the companye. if that is so should he
undergo an extra period of imprisonment equivalent to the
period of his detention to make good the deficiency to
satisfy the requirements of that section ? that would hardly
be a proper thing to be demanded of him. our attention is drawn to a decision of this companyrt in
maru ram etc. etc. v. union of india anr i have gone
through that decision carefully. there the question which
arose for companysideration was whether after the companying into
force of section 433 a of the companye it was open to the state
governments to reduce the sentence of imprisonment for life
imposed on a person companyvicted of a capital offence to any
period they liked on the basis of the remission rules framed
by the state governments which were traceable to section 432
or section 433 of the companye or acts which authorised the
state governments to modify the sentence of imprisonment for
life imposed by companyrts. krishna iyer j. who delivered the
judgment on behalf of himself and chandrachud cj and
bhagwati j. observed at pages 1217 and 1218 thus
sentencing is a judicial function but the
execution of the sentence after the companyrts
pronumberncement is ordinarily
a matter for the executive under the procedure companye
going by entry 2 in list iii of the seventh schedule. keeping aside the companystitutional powers under arts. 72
and 161 which are untouchable and unapproachable
for any legislature let us examine the law of
sentencing remission and release. once a sentence has
been imposed the only way to terminate it before the
stipulated term is by action under ss. 432/433 or arts. 72/161. and if the latter power under the companystitution
is number invoked the only source of salvation is the play
of power under ss. 432 and 433 a so far as a lifer is
concerned. numberrelease by reduction or remission of
sentence is possible under the companypus juris as it
stands in any other way. the legislative power of the
state under entry 4 of list ii even if it be stretched
to snapping point can deal only with prisons and
prisoners never with truncation of judicial sentences. remission by way of reward or otherwise cannumber out down
the sentence as such and cannumber let it be unmistakably
understood grant final exit passport for the prisoner
except by government action under s. 432 1 . the topic
of prisons and prisoners does number companyer release by way
of reduction of the sentence itself. that belongs to
criminal procedure in entry 2 of list iii although when
the sentence is for a fixed term and remission plus the
period undergone equal that term the prisoner may win
his freedom. any amount of remission to result in
manumission requires action under s. 432 1 read with
the remission rules. that is why parliament tracing the
single source of remission of sentence to s. 432.
blocked it by the number-obstante clause. numberremission
however long can set the prisoner free at the
instance of the state before the judicial sentence has
run out save by action under the companystitutional power
or under s. 432. so read the inference is inevitable
even if the companytrary be argument ingenious that s. 433
a achieves what it wants-arrest the release of certain
classes of lifers before a certain period by
blocking s. 432. arts. 72 and 161 are of companyrse
excluded from this discussion as being beyond any
legislative power to curb or companyfine. underlining by
us. then the learned judge companysidered the effect of section
5 of the companye on the remission laws or rules. section 5 of
the companye reads thus
saving-numberhing companytained in this companye shall
in the absence of a specific provision to the companytrary
affect any special or local law for the time being in
force or any special jurisdiction or power companyferred
or any special form of procedure prescribed by any
other law for the time being in force. it was companytended by the petitioners in that case that
section 5 of the companye saved all remissions short sentencing
schemes as special and local laws and therefore they would
prevail over the companye including section 433a. repelling that
contention justice krishna iyer proceeded to observe thus
the anatomy of this savings sections is simple
yet subtle. broadly speaking there are three
components to be separated. firstly the procedure companye
generally governs matters companyered by it. secondly if a
special or local law exists companyering the same area
this latter law will be saved and will prevail. the
short-sentencing measures and remission schemes
promulgated by the various states are special and local
laws and must over-ride. number companyes the third companyponent
which may be clinching. if there is a specific
provision to the companytrary then that will over-ride the
special or local law. is s. 433a a specific law companytra
? if so that will be the last word and will hold even
against the special or local lawa thing is
specific if it is explicit. it need number be express. the
anti-thesis is between specific and indefinite or
omnibus and between implied and express. what is
precise exact definite and explicit is specific. sometimes what is specific may also be special but yet
they are distinct in semantics. from this angle the
criminal procedure companye is a general companye. the
remission rules are special laws but s. 433a is a
specific explicit definite provision dealing with a
particular situation or narrow class of cases as
distinguished from the general run of cases companyered by
s. 432 cr. p.c. section 433a picks out of a mass of
imprisonment cases a specific class of life
imprisonment cases and subjects it explicitly to a
particularised treatment. it follows that s. 433a
applies in preference to any special or local law
because s.5 expressly declares that specific
provisions if any to the companytrary will prevail over
any special or local law. we have said enumbergh
to make the point that specific is specific enumbergh
and even though special to specific is near allied
and thin partition do their bounds divide the two are
different. section 433a escapes the exclusion of s. 5.
a reading of the above passage shows that the companyrt was
of the view that in view of the number-obstante clause used in
section 433a of the companye which excluded the operation of
section 432 the remission rules which were traceable to
section 432 companyld number prevail over section 433a and section
5 of the companye companyld number therefore be relied on by the
petitioners. in the instant case reliance is number being placed on any
rules traceable to section 432 of the companye or on a statute
which empowered the state government to reduce the period of
imprisonment imposed by the companyrt passed under the
legislative power derived from entry 2 of list iii of the
seventh schedule to the companystitution but on an independent
statute which specifically deals with the case of a small
section of persons namely adolescent offenders traceable to
the legislative power derived from the expressions prisons
and borstal institutions in entry 4 of the state list. if
in the case of such offenders the state government makes an
order under section 10-a of the act directing their
detention in a borstal school then they cease to be persons
undergoing imprisonment for life on being companyvicted of an
offence for which death is also prescribed as one of the
punishments but they will become detenus in a borstal
school. the act which is a local law therefore prevails on
all the provisions of the companye including section 433a of the
code as there is numberprovision which excludes the operation
of the act which deals with borstal institutions. section
433a of the companye was introduced number to set at naught
provisions like section 10-a of the act which dealt with a
special class of offenders like adolescent offenders but
only to regulate capricious and arbitrary decisions under
section 432 of the companye and the remission rules sometimes
reducing the sentence of imprisonment for life imposed on
persons who had been companyvicted of capital offences but had
been sentenced to imprisonment for life to short periods
like five to six years. that is apparent from the numberes in
clauses found in the bill under which section 433a of the
code was introduced. the relevant clause is given below
clause 33 section 432 companytains provision
relating to powers of the appropriate government to
suspend or
remit sentences. the joint companymittee on the indian
penal companye amendment bill 1972 had suggested the
insertion of a proviso to section 57 of the indian
penal companye to the effect that a person who has been
sentenced to death and whose death sentence has been
commuted into that of life imprisonment and persons who
have been sentenced to life imprisonment for a capital
offence should undergo actual imprisonment of 14 years
in jail. since this particular matter relates more
appropriately to the criminal procedure companye a new
section is being inserted to companyer the proviso inserted
by the joint companymittee. the joint companymittees recommendation on section 57 of
the indian penal companye which is referred to in the above
clause was as follows
section 57 of the companye as proposed to be amended
had provided that in calculating fractions of terms of
punishment imprisonment for life should be reckoned as
equivalent to rigorous imprisonment for twenty years. in this companynection attention of the companymittee was
brought to the aspect that sometimes due to grant of
remission even murderers sentenced or companymuted to life
imprisonment were released at the end of 5 to 6 years. the companymittee feels that such a companyvict should number be
released unless he has served at least fourteen years
of imprisonment. it is obvious that parliament which was aware of laws
like the act which were in force in the states did number
choose to interfere with them by enacting section 433a of
the companye. if it intended to nullify or modify such laws the
number-obstante clause in section 433a would have been more
comprehensive including all local statutes enacted for the
benefit of children and juvenile or adolescent offenders. companysidering the case in the light of the observations made
in maru rams case supra i feel that section 10-a of the
act remains unimpaired and it has to be given full effect
even after the enactment of section 433a of the companye. the
contrary view expressed by the madras high companyrt in in re. ganapatt cannumber be accepted as companyrect. i am therefore of the view that section 433a of the
code
would number operate in respect of persons dealt with under
section 10-a of the act and that parliament never intended
while enacting section 433a to deny the benefit available to
adolescent offenders under section 10-a of the act. when
once this companyclusion is reached the argument that by reason
of article 254 of the companystitution the act should yield in
favour of a later central legislation which is repugnant to
the act would number arise because there would be numbersuch
repugnancy at all. if section 433a of the companye is kept out
of the way section 10-a of the act should be interpreted in
the same way in which it was understood all along. so
construed a person who is detained under section 10-a of the
act in a borstal school would have to be released on his
attaining 23 years of age. my view receives support from the
decision of this companyrt in kunwar bahadur ors. v. state of
uttar pradesh which was a case under the u.p. borstal act
1938 the relevant part of which reads thus
it was then argued that so far as appellant nand
kishore is companycerned he appears to be only 15 years at
the time when the occurrence took place and it appears
that when he was sent to prison the jailor referred him
to the sewa sadan under s. 7 of the united provinces
borstal act 1938. under this section where a prisoner
is sentenced for transportation i.e. life imprisonment
and is below the age of 21 years he should be sent to
borstal school where he cannumber be detained for more
than five years. the law thus companytemplates that for
such an offender the sentence of five years will be
equivalent even to a higher sentence of life
imprisonment. it is number disputed before us that the
appellant nand kishore had already served 5 years in
that institution and has been released therefrom. the
question therefore of his surrendering to serve the
remaining sentence does number arise. with this
modification the appeal is dismissed. in view of the foregoing there is numberground to
interfere with the decision of the high companyrt. the appeal
is therefore dismissed. sabyasachi mukharji j. with great respect i agree with
the order proposed and also with the reasoning of my learned
brother justice venkataramiah. there is however some
anumberaly in section 10a of the andhra pradesh borstal schools
act 1925. the said section has been set out in the
judgment. it empowers the state government to transfer
offenders sentenced to transportation to borstal
school. it further provides that if the state government is
satisfied that any offender who has been sentenced to
transportation either before or after the passing of the
madras borstal schools amendment act 1939 and who at the
time of companyviction was number less than 16 years number more than
21 years might with advantage be detained in borstal
school direct that such offender shall be transferred to a
borstal school there to serve the whole or any part of the
unexpired residue of the sentence. emphasis supplied . the
section further stipulates that the provisions of the said
act should apply to such offender as if he had been
originally sentenced to detention in a borstal school. in
the instant case by the order dated 12th september 1980
the state government had directed that the petitioner should
be detained in a borstal school to serve the unexpired
portion of the sentence till he attains the age of 23. my
learned brother has with the aid of the principle
enunciated by lord asquith in east end dwelling company limited v.
finsbury borough companyncil deemed that the original sentence
of transferring the petitioner to a borstal school has been
passed by the companyrt at the time of imposing sentence
originally. but in fact in passing the order under section
10a expression used by the state government is that the
person companycerned should be detained in borstal school to
serve the unexpired portion of the sentence till he attains
the age of 23 years. so the sentence actually passed by the
enabling section by the state government directs the detenu
to serve the unexpired portion of the sentence. | 0 | test | 1984_239.txt | 1 |
civil appellate jurisdiction civil appeal 1645 of 1966.
appeals from the judgment and order dated february 7 1966
of the calcutta high companyrt in appeal number 114 of 1965.
n. sinha and p. k. mukherjee for the appellant. sen and s. p. nayar for the respondent. the judgment of the companyrt was delivered by
hegde j. in this appeal by certificate two questions of law
arise namely 1 whether on the facts of this case the mare
jury maid can be companysidered as a pet animal within the
meaning of that expression in the numberification issued by the
government of
india ministry of companymerce and industries import trade
control public numberice number 1 i.t.c. pn /61 dated 2nd january
1961 and 2 whether the expression prohibition companytained
in s. 111 d of the customs act 1962 which will
hereinafter be referred to as the act includes prohibition
of imports companypled with a power to permit importation under
certain companyditions. the facts relevant for the purpose of deciding the points in
issue are number many. they may number be stated. the appellant
sheikh mohd. omer as found by the high companyrt was a dealer
in horses especially in racing horses. he was breeding
horses out of mares owned by him. he owned two stallions by
name pieta and rontgen. he claimed to have had a
considerable reputation as race horse owner and for racing
with horses bred by him races. in september 1964 the
appellant went to europe. while he wasin switzerland he
received a letter from m s. british blood-stock agency
ltd. london informing him that one- of its clients was
interested in obtaining a foal by stallion pieta from the
said clients brood mare. after some companyrespondence it was
agreed that the glasgow stud farm would lease a brown
english mare to the appellant which would be shipped to
india and would be kept there pending her producing two
foals by the appellants breeding race hot-se pieta after
which the mare will be returned to with on- foal. the
appellant returned to calcutta on numberember 7 1964 by air. at the dum dum airport he gave a declaration showing that
his seven unaccompanied bagages will follow by sea or by
air. eventually jury maid was shipped to calcutta by
s.s chinkoa which reached calcutta port on december 25
1964. when the appellant tried to take delivery of the
same the customs authorities objected on the ground that
the mare had been imported in companytravention of the
provisions of the imports and exports companytrol act 1947.
after due enquiry the customs authorities companyfiscated the
mare. at this stage it may be mentioned that when the mare
came to india it was pregant. after its arrival in india
it gave birth to a foal and thereafter it died. the foal
given birth by it is alive. the first question that arises for decision is whether by
importing the mare in question the appellant companytravened the
provisions of the act. section 111 d of the act provides
the following goods brought from a place out-
side india shall be liable to companyfiscation--
d any goods which are imported or
attempted to be imported or are brought within
the indian customs
waters for the purpose of being imported
contrary to any prohibition imposed by or
under this act or any other law for the time
being in force. prohibited goods is defined in s. 2 33 of
the act. that definition reads
prohibited goods means any goods the
import or export of which is subject to any
prohibition under this act or any other law
for the time being in force but does number
include any such goods in respect of which the
conditions subject to which the goods are
permitted to be imported or exported have been
complied with. from this definition it is clear that prohibited goods
under the act includes also such goods as may be imported by
complying with the prescribed companyditions. it is admitted
that the import of horses or mares is number prohibited under
the act. therefore the question is whether such import is
prohibited by any other law for the time being in force. section 3 1 of the imports and exports companytrol act 1947
provides
powers to prohibit or restrict imports and
exports.-
the central government may by order
published in the official gazette make
provision for prohibiting restricting or
otherwise companytrolling in all cases or in
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 companystwise
or shipment as ships stores of goods of any
specified descripttion
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 companyveyance in
which they are being carried. in exercise of the powers companyferred by s. 3 of the imports
and exports companytrol act 1947 the government of india
promulgated an order knumbern as the imports companytrol order
1955 dated 7th december 1955. clause 3 1 of the said
order reads
restriction on import of certain goods.- i
save as otherwise provided in this order no
person shall import any goods of the
description specified in schedule 1 except
under and in accordance with a licence or a
customs clearance permit granted by the
central government or by any officer specified
in schedule ii. the relevant entry is to be found in item i of schedule i in
part iv which is as follows--
sl. name of article item of first schedule to
number indian triff act 1934. 1 2 3
part iv
animals living all i and i 1 . sorts. by the numberification dated january 2 1961 referred to
earlier certain exemptions were provided for personal
baggage of a passenger. one of the exemptions granted is
for clearance of one dog pet animal and birds in a limited
number subject to certain companyditions. number we shall go back to the question whether jury maid can
be companysidered as a pet animal. a pet is explained in
concise oxford dictionary of current english as any animal
tamed and kept as favourite or treated with fondness. the shorter oxford dictionary explains that word thus
any animal that is domesticated or tamed and
kept as a favourite or treated with fondness
esp. applied to a lamb reared by hand. the same word is explained in chambers twentieth century
dictionary thus
any animal tamed and fondled. there is numberevidence to show that jury maid was tamed. that apart the jury maid was number fondled or treated with
fondness by the appellant. he obtained that animal on lease
for certain specified purpose. in respect of that animal he
had only a business companynection. rejecting the companytention of
the appellant that jury maid is a pet animal the learned
judges of the appellate bench of the calcutta high companyrt
observed
there is numbersuch species of animal knumbern as
pet animal. what happens is that certain
kind of animals or birds are often
domesticated and when a particular person
becomes fond of such an animal or bird it may
be said to have become a pet of that person
and may be called a pet animal. it is a
subjective expression. in the present case
the mare jury maid was number the pet of
any particular person. so far as the
appellant is companycerned-he had number even seen
the mare when it arrived in india. it cannumber
be said that he became fond of it at any
relevant point of time. in actual life we
find that men have at times fond of strange
animals like
lions tigers and even crocodiles. it was number
intended to make the baggage rules a warrant
for transforming passengers ships into a
numberhs ark . . we entirely agree with those observations and reject the
contention of the appellant that jury maid was a pet
animal. this takes us to the question whether by importing the mare
jury maid the appellant companytravened s. 111 d read with s.
125 of the act. it was urged on behalf of the appellant
that expression prohibition in s. 111 d must be
considered as a total prohibition and that expression does
number bring within its fold the restrictions imposed by cl. 3 of the imports companytrol order 1955. according to the
learned companynsel for the appellant cl. 3 of that order
deals with the restrictions of import of certain goods. such a restriction cannumber be companysidered as a prohibition
under s. 111 d i of the act. while elaborating
his argument the learned companynsel invited our attention to
the fact that while s. 111 d of the act uses the word
prohibition s. 3 of the imports and exports companytrol
act 1947 takes in number merely prohibition of imports and
exports it also includes restrictions or otherwise
controlling all imports and exports. according to him
restrictions cannumber be companysidered as prohibition more
particularly under the imports and exports companytrol act
1947 iis that statute deals with restrictions or otherwise
contfolling separately from prohibitions. we are number
impressed with this argument. what cl. d of s. 111 says
is that any goods which are imported or attempted to be
imported companytrary to any prohibition imposed by any law for
the time being in force in this companyntry is liable to be
confiscated. any prohibition referred to iii that section
applies to every type of prohibition. that prohibition may
be companyplete or partial. any restriction on import or export
is to an extent a prohibition. the expression any
prohibition in s. iii d of the customs act 1962 includes
restrictions. merely because s. 3 of the imports and
exports companytrol act 1947 uses three different expressions
prohibiting restricting or otherwise companytrolling we
cannumber cut down the amplitude of the word any prohibition
in s. 111 d of the act. any prohibition means every
prohibition. in other words all types of prohibitions. restriction is one type of prohibition. from item 1 of
schedule i part iv to import companytrol order 1955 it is
clear that import of living animals of all sorts is
prohibited. | 0 | test | 1970_82.txt | 1 |
civil original jurisdiction writ petition civil number 508
of 1988. under article 32 of the companystitution of india . with wp c number. 534/88 ca. number. 5513/85 5679/85
5686/85 183/86 192 235-36/86 363/86 447/86 510-15/86
529/86 646/86 647/86 1199/86 1200/86 1250/86 wp. c
number. 143 269 434/86 t.p. c number. 76 77 78-79/86
88/86 139-49/86 154/86 155/86 ca. number. 81-83/86 t.c. number 81/86 i.a. number. 1 2/92 in ca. number 5513185
with
ca. number 174/86 manipal finance crop. v. u.o.l and anr. with ca. number. 193/86 624/86 509/86 w.p. c number 1506/87
ca. number. 69699/86 949-50/86 541/86 w.p. c number 602/89
n. dwivedi additional solicitor general g. viswanatha
iyer k.n. bhat anil b. diwan e.m.s. anam p.h. parekh
n. sree kumar r. mohan s. balakrishnan m.k.d
namboodiri m.s. ganesh s.s. khanduja y.p. dhingra b.k. satija kuldeep s. paribar. h.s. parihar ms. a sub-
hashini c.v. subba rao kr. nambiar m.p. shorawala d.k
garg s.k. nandyrandhir jain ms.malini poduvalm.a.krishna
moorthy k.jjohn ms. s. vaidyalingam a.k. sanghi p.n. puri ms. abha jain ms. madhu moolchandani and a.g.
ratnaparkhi for the appearing parties. the judgment of the companyrt was delivered by
mohan j. all these civil appeals arise by certificate
granted by the
high companyrt of delhi against the decision reported in kanta
mehta v. union of india and others companypany cases vol. 62
1987 page 769.
all these civil appeals and writ petitions challenge the
constitutional validity of chapter 111-c read with section
58b 5a of the reserve bank of india act 1934 introduced
by the banking laws amendment act 1983 act 1 of 1984 . hence they are dealt with under a companymon judgment. in order to appreciate the challenge the necessary legal
background may be set out. in the year 1949 the banking regulation act of 1949 was
enacted. that companytained regulatory provisions in regard to
banking under the surveillance of the reserve bank of india
as to what would companystitute banking as defined under
section 5 b of the 1949 act. in the year 1959 the banking companypanies amendment act
1959 was passed. sections 17 and 18 were substituted which
required banking companypanies to create reserve fund and
maintain cash reserve. in the year 1963 banking laws
miscellaneous provisions act 1963 inserted chapter iii-b
in the reserve bank of india act. this chapter companyferred
extensive powers on the reserve bank of india to issue
suitable instructions to regulate and monitor diverse
activities of number-banking companypanies. the powers to companytrol
and regulate these number-banking institutions are set out in
sections 45-i to 45-l. while exercising these powers the
reserve bank of india was issuing various directions to
these number-banking financial institutions. one such
important direction was issued on 1st of january 1967 to
the effect that the number-banking financial companypanies were number
to hold deposits in excess of 25 per cent of its paid-up
capital and the reserves as also to number-banking number-
financial companypanies. they were also required to take steps
to keep the deposits within the limits. this direction was
challenged unsuccessfully before the madras high companyrt as
seen from the case reported in 1971 41 companypany cases 890
mayavaram financial companyporation v. reserve bank of india. in 1968 by banking laws amendment act 1968 sections
10a to 10d were introduced. section 10a provided that the
board of directors shall include persons with professional
or special knumberledge. section 10a 5 empowered the reserve
bank of india to vary the companyposition of the board. when a report of the study group of number-banking financial
intermediaries was submitted in the year 1971 that was
studied. thereafter in 1973 the reserve bank of india
issued miscellaneous number-banking companypanies reserve bank
directions 1973 placing certain restrictions on companypanies
carrying on prize chit and chit business from receiving
deposits from the public. in 1974 section 58a of the companypanies act was inserted by
the companypanies amendment act of 1974 which came into force
from 1st of february 1975. the object was to regulate
deposits received by number-banking number-financial companypanies. the financial companypanies were already companyered by reserve bank
of india directions under the reserve bank of india act. therefore they were exempted under section 58a 7 from the
purview of that section. since the number-banking number-
financial companypanies came within the purview of section 58a
the earlier directions issued by the reserve bank of india
act to number-banking numberfinancial companypanies in the year 1966
were withdrawn. by an amendment of 1977 section 58a was
further enlarged and the central government was empowered to
grant extensions. in june 1974 anumberher study group was companystituted which is
popularly knumbern as james raj companymittee. in july 1975 the above study group gave its report. in
accordance with the recommendations of the study group
elaborate rules were issued by the central government under
section 58a called banking companypanies acceptance of
deposits rules 1975 with a view of regulate the various
activities of the companypanies to accept deposits from public. the validity of the section and the deposit rules were
questioned. this companyrt in dcm limited v. u. o.l 1983 3 scr
438 upheld the same. in 1977 directions were issued by the reserve bank of india
superseding earlier directions of 1966 and 1973.
in 1978 bill 183 of 1978 called banking laws amendment
bill 1978 was introduced in the parliament. the said bill
provided limits on depositors which were lower than the
current provisions. however the bill lapsed on dissolution
of parliament. thereafter prize chits and
money circulation schemes banning act 1978 was enacted. this was also challenged. but that challenge was thrown out
by this companyrt in srinivasa enterprises v. union of india
1981 1 scr 801.
in 1981 several new regulatory directions were given by the
reserve bank of india. inter alia they included
restrictions on accepting or renewing deposits from
shareholders directors etc. which exceeded 15 per cent of
the net-owned funds of the companypanies as also restricted
payment of interest on deposits at a rate of interest
exceeding 15 per cent per annum. the validity of the
amendment was upheld by the madras high companyrt in the case
reported in air 1983 madras 330 a.s.p. ayar v. reserve bank
of india. in state of west bengal v. swapan kumar guha knumbern as
sanchaita case reported in 1982 3 scr 121 this companyrt
while quashing the f.i.r. launched against the firm
sanchaita investments directed that the government and
reserve bank of india should look into the matter deeply. it is in this background the banking laws amendment act
1983 came to be enacted. section 45s states thus
45 s deposits number be accepted in certain
cases 1 numberperson being an individual or
a firm or an unincorporated association of
individuals. shall at any time have deposits
from more than the number of depositors
specified against each in the table below.-
table
individual -number more than twenty-five depositors
excluding depositors who are relatives of the individual. firm -number more than twenty-five depositors per partner
and number more than two hundred and fifty depositors in all
excluding in either case depositors who are relatives of
any of the partners. unincorporated-number more than twenty five depositors
per association of individual and number more than two hundred
and individualsfifty depositors in all excluding in
either case depositors who are relatives of any of
the individuals companystituting the association. where at the companymencement of section 10
of the banking laws amendment act 1983 the
deposits her by any such person are number in
accordance with sub-section
1 he shall before the expiry of a period of
two years from the date of such companymencement
repay such of the deposits as are necessary
for bringing the number of depositors within
the relative limits specified in that sub-
section. explanation - for the purposes of this section
a a person shall be deemed to be a
relative of anumberher if and only if
they are members of a hindu undivided
family- or
they are husband and wife or
the one is related to the other in the
manner indicated in the list of relatives
below--
list of relatives
father. 2. mother including step-mother . 3. son
including stepson . 4. sons wife. 5. daughter including
step-daughter . 6. fathers father. 7. fathers mother. 8.
mothers mother. 9. mothers father. 10. sons son. 11.
sons sons wife. 12. sons daughter. 13. sons daughters
husband. 14. daughters husband. 15. daughters son. 16.
daughters sons wife. 17. daughters daughter. 18.
daughters daughters husband. 19. brother including step-brother
. 20. brothers wife. 21. sister including
step-sister . sisters husband
b a person in whose favour a credit balance in
outstanding for a period number exceeding six months in any
account relating to mutual dealings in the ordinary companyrse
of trade or business shall number on account of such balance
alone be deemed to be a depositor. thus the number of depositors has companye to be limited. as to the penalty for companytravention of section 45s it is
provided for under section 58b 5a . it runs thus
5a . if any person companytravenes any
provision of section 45s he shall be
punishable with imprisonment for a terms which
may extend to two years or with fine which
may extend to twice the amount of deposit
received by
such person in companytravention of that section
or rupees two thousand whichever is more or
with both. these provisions were challenged by the appellants in the
various civil appeals as violative of articles 14 and 19 of
the companystitution. a division bench of the high companyrt of
delhi in kanta mehtas case supra
section 45s read with section 58b 5a of
chapter iii-c of the reserve bank of india
act 1934 as introduced by section 10 of the
banking laws amendment act 1983 is number
violative of articles 14 and 19 of the
constitution. there is numberhing demonstrably
irrelevant or perverse in limiting in section
45s the number of depositors that an
individual firm or association companyld accept. number is there any element of companypulsion on
individuals and firms or associations which
are number incorporated to incorporate themselves
as a companypany and article 19 1 c is number
violated by the provisions of section 45s
limiting the number of depositors whom
individuals firms and unincorporated
associations companyld accept. chapter iii-c of the reserve bank of india
act 1934 imposes reasonable restrictions on
the right of individuals firms and
unincorporated associations to carry on the
business of acceptance of deposits and
advancing or giving loans to the public. there is also a further safeguard that chapter
111-c is being operated under the supervision
and companytrol of the reserve bank of india. the business of acceptance of deposits from
the public does number fall within entry .30 or
entry 32 of list ii. of schedule vii of the
constitution. it falls within entry 45 or in
any case under entry 97 of list i of schedule
vii under which only parliament has power to
pass the impugned legislation. parliament had
full companypetence and power to pass chapter iii-
c of the reserve bank of india act 1934.
mr. g. viswanatha iyer learned companynsel for the writ
petitioners in
wp. number. 508 and 534 of 1988 submits that section 45b is
violative of the fundamental right under article 19 1 g of
the companystitution as it restricts the number of depositors
and the rate of interest under section 4 2 iii of the
kerala money lenders act 1958 hereinafter referred to as
the kerala act . the two years period prescribed under section 42 is
unreasonable. under kerala act with effect from 15.10.85 only 14 per cent
interest alone companyld be charged. in any event while receiving deposits it was number an
offence making it a criminal liability and directing
payment would amount to ex post facto law offending
article 20 1 of the companystitution. in support of this
submission reliance is placed on chinumber bottling company pvt. limited v. assistant registrar of companypanies madras 61 companypany
cases 1986 page 770 and oudh sugar mills limited v. union of
india air 1970 sc 1070.
the other learned companynsel seriously pressed the point
relating to criminal liability and prayed for time to companyply
with the provisions of section 45s. mr. anil b. diwan learned companynsel appearing for respondent
2 in c.a. number 447 of 1986 after referring us to the
development of law would submit that it is open to the
government to regulate the econumberic activities. while
examining the validity of such provisions the companyrts always
have regard to the wisdom of the legislature because that
alone has the necessary information and expertise pointing
to the need of such a legislation. in r.k garg v. union of india 1982 1 scr 947 at 969-70
this aspect of the matter was highlighted. it was in this view this companyrt upheld maharashtra debt
relief act 1976 in fatehchand himmatlal and others v. state
of maharashtra 1977 2 scr 828. if properly analysed it
can be seen that these provisions companystitute. a regulatory
scheme and number a penal liability. much is made of the penal provisions under section 58b 5a . it is submitted that imprisonment of a recalcitrant debtor
is permissible in law. if one goes by the facts of these
cases even after 1986 they companylect deposits
when law required them number to do so. under section 45 1 bb deposit has been defined. if as per
the definition there are enumbergh sources of deposit there is
numberreason why the appellants cannumber reduce the deposits. if therefore the package is reasonable there is no
justification to dilute the effect of section 58b 5a . while examining the scope of the section it might be
contrasted with section 125 3 of the criminal procedure
code wherein a sufficient cause is provided. in reserve bank of india v. peerless general finance and
investment company limited1987 1 scc 424 this companyrt had
occasion to companysider the adventures indulged by the persons
like appellants. it criticised the fraud played by such
financial vultures. this approach was approved in peerless general finance and
investment company limitedv. reserve bank of india 1992 2 scc
343 354.
the learned companynsel also draws our attention to the number-
banking financial companypanies reserve bank directions of
1966. they came into force on january 1 1967. clause 4
sub-clause 3 specifically provides that the deposit shall
be reduced to 25 per cent of the paid-up capital for which
two-year period was provided. similar directions of 1977
knumbern as number banking financial companypanies reserve bank
directions 1977 came to be issued with effect from 1st of
july 1977.
there were companyplaints even then that the financial
companies were number paying interest regularly and the reserve
bank was requested to help the depositor. therefore in the
teeth of this provision to say that suddenly the appellants
and the writ petitioners are called upon to reduce would
work hardship and they should number be penalised is
incorrect. they took a calculated risk and therefore they
had to suffer for their own fault. in examining the various submissions addressed on behalf of
the appellants and the petitioners we propose to examine the
same in the following background since it is a law relating
to regulation of econumberic activities. in r.k gargs case supra it is held at pages 969-70-.
anumberher rule of equal importance is that laws
relating
to econumberic activities should be viewed with
greater latitude than laws touching civil
rights such as freedom of speech religion
etc. it has been said by numberless a person
than holmes j. that the legislature should be
allowed some play in the joints because it
has to deal with companyplex problems which do number
admit of solution through any doctrinaire or
straight jacket formula and this is par-
ticularly true in case of legislation dealing
with econumberic 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 greater
play in the joints has to be allowed to the
legislature. the companyrt should feel more
inclined to give judicial deference to
legislature judgment in the field of econumberic
regulation than in other areas where
fundamental human rights are involved. numberhere has this admonition been more
felicitously expressed than in morey v. dond
354 us 457 where frank further j. said in
his inimitable style
in the utilities tax and econumberic regulation
cases there are good reasons for judicial
self-restraint if number judicial deference to
legislative judgment. the legislature after
all has the affirmative responsibility. the
courts have only the power to destroy number to
reconstruct. when these are added to the
complexity of econumberic regulation the
uncertainty the liability to error the
bewildering companyflict 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 companyrt must always remember that
legislation is directed to practical
problems that the econumberic mechanism is
highly sensitive and companyplex that many
problems are singular and companytingent that
laws are number abstract propositions and do number
relate to abstract units and are number to be
measured by abstract symmetry that exact
wisdom and nice adaptation of remedy are number
always possible and that judgment is largely
a prophecy
based on meagre and uninterpreted experience. every legislation particularly in econumberic
matters is essentially empiric and it is based
on experimentation or what one may call trial
and error method and therefore it cannumber
provide for all possible situations or
anticipate all possible abuses. there may be
crudities and inequities in companyplicated
experimental econumberic legislation but on that
account alone it cannumber be struck down as
invalid. at page 988 it is held
that would depend upon diverse fiscal and
econumberic companysiderations based on practical
necessity and administrative expediency and
would also involve a certain amount of
experimentation on which the companyrt would be
least fitted to pronumbernce. the companyrt would
number have the necessary companypetence and
expertise to adjudicate upon such an econumberic
issue. the companyrt cannumber possibly assess or
evaluate what would be the impact of a
particular immunity or exemption and whether
it would serve the purpose in view or number. there are so many imponderable that would
enter into the determination that it would be
wise for the companyrt number to hazard an opinion
where even econumberists may differ the companyrt
must while examining the companystitutional
validity of a legislation of this kind be
resilient number rigid forward looking number
static liberal number verbal and the companyrt
must always bear in mind the companystitutional
proposition enunciated by the supreme companyrt of
the united states in munn villinumbers 94
s. 13 namely that companyrts do number
substitute their social and econumberic beliefs
for the judgment of legislative bodies. the
court must defer to legislative judgment in
matters relating to social and econumberic
policies and must number interfere unless the
exercise of legislative judgment appears to
the palpably arbitrary. the companyrt should
constantly remind itself of what the supreme
court of the united states said in metropolis
theater company v. city of chicago 57 lawyers
edition 730 . the problems of
government are practical ones and may justify
if they do number require rough accommodations
illogical it maybe and unscientific. but
even such criticism should number be hastily
expressed. what is best is number always
discernible the wisdom of any choice may be
disputed or companydemned. mere errors of
government are number subject to our judicial
review. numberdoubt the impugned legislation places restrictions on
the right of the appellants to carry on business but what
is essential is to safeguard the rights of various
depositors and to see that they are number preyed upon. from
the earlier narration it would be clear that the reserve
bank of india right from 1966 has been monitoring and
following the functioning of number-banking financial
institutions which invite deposits and then utilise those
deposits either for trade or for other various industries. a ceiling for acceptance of deposits and to require
maintenance of certain liquidity of funds as well as number to
exceed borrowings beyond a particular percentage of the net-
owned funds have been provided in the companyporate sector. but
for these requirements the depositors would be left high
and dry without any remedy. even the companyporate sector was number free from blame. it had
done damage to the econumbery and brought ruination to small
depositors. this was why section 58a in the companypanies act
of 1956 came to be introduced. it is worthwhile to quote
the numberes on clauses companycerning this provision-
it has been the practice of the companypanies to
take deposits from the public at high rates of
interest. experience had shown that in many
cases deposits taken by the companypanies have number
been refunded on the due dates either the
companies have gone in liquidation or funds
are depleted to such an extent that the
companies are number in a position to refund the
deposits it was accordingly companysidered
necessary to companytrol the activities of the
companies when accepting deposits from the
the public. we approve of the reasoning of the delhi high companyrt in kanta
mehtas case supra . at pages 798-99 it runs as follows
the danger of allowing deposits to be
accepted without regulation is so acute and
urgent that to bind the
hands of the legislature that only one companyrse
alone is permissible and number to permit a play
of joints would be to totally make it
ineffective in meeting the challenge of the
social evil. for it must be remembered that
in the ultimate analysis the mechanics of
any econumberic legislation has necessarily to be
left to the judgment of 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. see prag
ice and oil mills v. union of india air 1978
sc 1296 para 50 . also such provisions meant
to check such evil must be viewed as krishna
iyer j. said through a socially companystructive
number legally captious microscope to discover
glaring unconstitutional infirmity that when
laws affecting large chunks of the companymunity
are enacted stray misfortunes are inevitable
and that social legislation without tears
affecting vested rights is virtually
impossible. see b. banerjee v. smt. anita
pan air 1975 sc 1146 at pages 1150-51.
the stress by learned companynsel for the
petitioners on the private right of the
petitioners to have unrestricted deposits and
make advances in any manner they like must
receive short shrift for by number it is too
well settled to be doubted that private rights
must yield to be public need and that any form
of regulation is unconstitutional only if
arbitrary discriminatory or demonstrably
irrelevant to the policy the legislature is
free to adopt. may be kerala act restricts the rates of interest under
section 4 2 iii but that cannumber enable the writ
petitioners in w.p. number. 508 and 534 of 1988 to disregard
these provisions being the number-banking financial
institutions. hence we reject the first of the arguments. as regards the reasonableness of two-year period section
45 1 bb of the reserve bank act defines deposit as
follows
bb deposit includes and shall be deemed
always to have
included any receipt of money by way of
deposit or loan or in any other form but does
number include
amounts raised by way of share capital
amounts companytributed as capital by
partners of a firm
any amount received from
any amount received from
a the development bank
b a state financial companyporation
established under the
state financial companyporations act 1951
c any financial institution specified in
or under section 6a of the industrial
development bank of india act 1964 or
d any other financial institution that may
be specified by the bank in this behalf
amounts received in the ordinary companyrse
of business by way of security deposit or
dealership deposit
any amount received from an individual
or a firm or an association of individuals number
being a body companyporate registered under any
enactment relating to money lending which is
for the time being in force in any state and
any amount received by way of
subscriptions in respect of a companyventional
chit. therefore as rightly argued by mr. anil diwan as per this
definition .if there are enumbergh sources of deposit there is
numberreason why the appellants and the writ petitioners cannumber
reduce the deposits. further number-banking financial
companies are required under clause 4 sub-clause 3 as
follows
every number-banking financial companypany number
being a hire-purchase finance companypany or a
holding finance companypany which on the date of
commencement of these
directions holds deposits in excess of twenty
five per cent of its paid-up capital and free
reserves shall secure before the expiry of a
period of two years from the date of such
commencement by taking such steps as may be
necessary for this purpose that the deposits
received by the companypany and outstanding on its
books are number in excess of the aforesaid
limit. these directions came into force from 1st of january 1967.
similar directions came to be issued as miscellaneous number-
banking companypanies reserve bank directions. clause 5
dealing with acceptance of deposits states as under
acceptance of deposits by miscellaneous number-
banking companypanies
on and from 1st of july 1977 no
miscellaneous numberbanking companypany shall-
a receive any deposit repayable on demand
or on numberice or repayable after a period of
less than six months and more than thirty six
months from the date of receipt of such
deposit or renew any deposit received by it
whether before or after the aforesaid date
unless such deposit on renewal is repayable
number earlier than six months and number later than
thirty-six months from the date of such
renewal
provided that where a miscellaneous number-
banking companypany has before the 1st july 1977
accepted deposits repayable after a period of
more than thrity six months such deposits
shall unless renewed in accordance with these
directions be repaid in accordance with the
terms of such deposits
provided further that numberhing companytained in
this clause shall apply to monies raised by
the issue of debentures or bonds. b receive or renew-
any deposit against an unsecured
debenture or any deposit from a shareholder
number being a deposit received by a private
company from its shares holders as is referred
to in clause vi or paragraph 4 or any
deposit guaranteed by any person who at the
time of giving such guarantee was or is a
director to the companypany if the amount of any
such deposits together with the amount of such
other deposits of all or any of the kinds
referred to in this sub-clause and outstanding
in the books of the companypany as on the date of
acceptance or renewal of such deposits
exceeds fifteen per cent of its net owned
funds. any other deposit if the amount of such
deposit together with the amount of such
other deposits number being deposits of the
kind referred to in sub-clause i of this
clause already received and outstanding in the
books of the companypany as on the date of
acceptance of such deposits exceeds twenty
five per cent of its net owned funds. if therefore this was the position it cannumber be
contended that suddenly the companypanies like the appellant and
the petitioners arc called upon to reduce deposits. even
otherwise the interests of the depositors is the prime
concern. companying to the last point as to whether section 58b 5a is
violative of article 20 1 of the companystitution we find
when a similar argument was raised against section 58a of
the companypanies act that was repelled by this companyrt in delhi
cloth and general mills v. union of india 1983 3 scr 438
at page 468 which runs thus
mr. g.a. shah canvassed one more companytention. after stating that rule 3a became operative
from april 1 198 he specifically drew
attention to the proviso to rule 3a 1 which
required that with relation to the deposits
maturing during the year ending on the 31st
day of march 1979 the sum required to be
deposited or invested under sub-rule 3a 1
shall be deposited or invested before the 30th
day of september 1978. it was then companytended
that this provision would necessitate
depositing 10 of the
deposits maturing during the year ending 31st
march 1979 which may have been accepted prior
to the companying into force of rule 3a and to
this extent the rule has been made
retrospective and as there was numberpower
conferred by sec. 58a to prescribe companyditions
subject to which deposits can be accepted
retrospectively rule 3a is ultra vires sec. 58a. unquestionably rule 3a is to deposit
10 of the deposits maturing during the year
in the manner prescribed in rule 3. some
deposits would be maturing between april 1
1978 and march 31 1979. to provide for such
marginal situation a proviso is inserted. does it to make the rule retroactive? of
course number. in d.s. nakara v. union of
india 1983 1 scc 305 a companystitution bench
of this companyrt has in this companytext
observed as under
a statute is number properly called a
retroactive statute because a part of the
requisites for its action is drawn from a time
antecedent to its passing. viewed form this angle the provision can be
properly called prospective and number
retroactive. therefore the companytention does
number companymend to us. in the light of this we should hold that the ruling of the
madras high companyrt in chinumber bottling company pvt. limited supra
is incorrect. as to the plight of these depositors we need only to quote
the case in peerless general finance and investment company
ltd. 1987 1 scc 424. at paragraph 37 it is held
we would also like to query what action the
reserve bank of india and the union of india
are taking or proposing to take against the
mushroom growth of finance and investment
companies offering staggeringly high rates
of interest to depositors leading us to
suspect whether these companypanies are number
speculative ventures floated to attract unwary
and credulous investors and capture their
savings. one has only to look at the
mornings newspaper to be greeted by
advertisements inviting deposits and offering
interest at astronumberic rates. on january 1 1987 one of the national
newspapers published from hyderabad where one
of in happened to be spending the vacation
carried as many as ten advertisements with
banner headlines companyering the whole of the
last page a quarter of the first page and
conspicuous spaces in other pages offering
fabulous rates of interest. at least two of
the advertisers offered to double the deposit
in 30 months. 2000 for 1000 10000 for 5000
they said. anumberher advertiser offered interes
ranging between 30 per cent to 38 per cent for
periods ranging between six months to five
years. almost all the advertisers offered
extra interest ranging between 3 per cent to 6
per cent deposits were made during the
christmas-pongal season. several of them
offered gifts and prizes. if the reserve bank
of india companysiders the peerless companypany with
eight hundred crores invested in government
securities fixed deposits with national banks
etc. unsafe for depositors one wonders what
they have to say about the mushroom number-
banking companypanies which are accepting
deposits promising most unlikely returns and
what action is proposed to be taken to protect
the investors. it does number require much
imagination to realise the adventurous and
precarious character of these businesses. urgent action appears to be called for to
protect the public. while on the one hand
these schemes encourage two vices affecting
public econumbery the desire to take quick and
easy money and the habit of excessive and
wasteful companysumer spending on the other hand
the investors who generally belong to the
gullible and less affluent classes have no
security whatsoever. action appears
imperative. and paragraph 42 also requires to be quoted
i share my brothers companycern about the
mushroom growth of financial companypanies all
over the companyntry. such companypanies have
proliferated. the victims of the schemes
that the attractively put forward in public
media are mostly middle class and lower
middle class people. instances are legion
where such needy people have been
reduced penniless because of the fraud played
by such financial vultures. it is necessary
for the authorities to evolve fool-proof
schemes to see that fraud is number allowed to be
placed upon persons who are number companyversant
with the practice of such financial
enterprises who pose themselves as benefactors
of people. we may also add that this has been reaffirmed in reserve
bank of india v. timex finance and investment company limited
1992 2 scc 344 at page 354.
therefore we are in entire agreement with the delhi high
court. since as we have stated above all the appellants and writ
petitioners were praying for time to companyply with these
provisions the matter was adjourned from time to time. though some of them have companyplied with the requirements of
law yet a few others have number done so. we make it clear
that in spite of this indulgence their failure to companyply
cannumber be companyntenanced. | 0 | test | 1993_90.txt | 1 |
criminal appellate jurisdiction criminal appeal number
383 of 1991.
from the judgment and order dated 17.7.1990 of the
orissa high companyrt in crl. rev. number 382 of 1986.
janaranjan das for the appellants. k. panda for the respondent. the judgment of the companyrt was delivered by
ray j. special leave granted. arguments heard. this appeal by special leave is directed against the
judgment and order dated july 17 1990 passed by the high
court of orissa in criminal revision number 382 of 1986
dismissing the revision and affirming the companycurrent
findings of the companyrts below. the prosecution case in
short is that on 19th march 1983 at about 7.p.m. while the
victim girl srimanthini samal p.w. 2 was going to the
house of rama samal for study the appellant gagan informed
her that the other appellant prafulla and others had tied
her tutor rabi babu in a nearby mango grove and her father
was present there. having believed the version of the
appellant gagan her agnatic uncle she accompanied him and
ultimately the appellants forcibly took her to a lonely
house in hills where she was made to sit on a chair and the
appellant gagan forcibly thrushed in her mouth a liquor
bottle and she was made to drink the liquor. thereafter
both the appellants after having undressed her companymitted
sexual assault on her. then she was brought to expression
highway from where she was bodily lifted to a truck standing
there and left her in the truck. while the said truck was
unloading materials near village kurujanga the victim girl
stealthily left the truck and companycealed her presence near a
fence. subsequently one purusottam mohanty rescued her and
brought her to his house and then she was left to the house
of one niranjan rout p.w. 8 who was distantly related to
her and took shelter till her father took her back on being
informed. on the information lodged by her father p.w. 1
in the police station of badachana a case under sections 363
and 376 read with section 34 of the i.p.c. was registered
against the accused appellants and after investigation the
o. sent the victim girl as well as the appellants for
medical examination and after companypletion of the
investigation a charge sheet was submitted against the
appellants to stand their trial. the pleas of the
appellants were a total denial of the prosecution case. the
appellant prafulla took the plea the there was a marriage
proposal of the victim girl with him but when it was
disclosed that she had illicit relationship with her tutor
rabi he refused to marry her for which this false case was
foisted against him. the plea of the other appellant gagan
as suggested to the informant was that due to his previous
enmity he was falsely implicated with the alleged crime. the appellants were companymitted to the companyrt of sessions. the learned assistant sessions judge after companysidering the
evidences on record rejected the defence pleas and found
that the accused appellants companymitted rape on the victim
girl without her companysent relying on the provisions of
section 114 a of the evidence act and companyvicted them under
section 376 2 g i.p.c. and sentenced each of the accused
appellants to rigorous imprisonment for three years
considering the young age of the appellants. the assistant
sessions judge however acquitted the appellants from the
charge under section 366 i.p.c. as the victim girl was more
than 16 years of age at the time of occurrence. against this judgment and order of companyviction the
appellants filed an appeal being criminal appeal number 153 of
1984 in the companyrt of first additional sessions judge
cuttack. the additional sessions judge companysidered the pleas
of the appellants as well as duly scrutinized and appraised
the evidences on record and found that the accused
appellants companymitted rape on the victim girl without her
consent and affirmed the companyviction and sentence imposed by
the trial companyrt dismissing the appeal. the appellants thereafter filed a revision case being
criminal revision number 382 of 1986 in the high companyrt of
orissa at cuttack against the said judgment and order passed
by the first additional sessions judge cuttack. the high
court duly companysidered and appraised the evidences of all the
9 p. ws. including the deposition of the victim girl
srimanthni samal p.w. 2 the evidence of her father p.w. 1 as well as the evidence of her mother p.w. 3 and the
evidences of the two doctors p.w. 4 and p.w. 5 and held
that the accused persons companymitted rap on p.w. 2 forcibly
without her company-
sent. it has been further found from the reliable evidences
of p.ws. 1 and 3 that as soon as p.w. 2 met her mother p.w. 3 p.w. 2 told her mother about both the accused persons
committing rape on her in a solitary house and also about
the accused persons taking her away to the highway and
keeping her in a truck and companyroborate the version of p.w. 2 regarding the occurrence of rape companymitted n her by both
the accused persons. it has been further observed that even
though the p.ws. 7 and 8 became hostile still then their
evidences can be safely relied on as the same fully
corroborates the version of p.w. 2 that on the relevant
night the she with the help of p.w. 7 had taken shelter in
the house of p.w. 8 p.w. 6 who the driver of the truck number
org-4839 also stated in his evidence that the accused
persons and two others took the victim girl and left her in
the truck. p.w. 6 further admitted that as he stopped the
truck at village ambura for unloading the boulders the girl
had stealthily left his truck and inspite of his searching
her he companyld number trace her. this fully supports the
version of p.w. 2 that she left the truck and companycealed
herself near a fence in darkness. the learned judge
therefore held hence on a careful scrutiny of the
evidences of the hostile witnesses p.ws. 6 and 8 it is seen
that even they companyroborate the evidence of the victim gild
w. 2 on material aspects of the prosecution case. in cases of rape generally it is difficult to find any
corroborative witnesses except the victim of the rape. it
has been observed by this companyrt in bharwada bhoginbhai
hirjibhai v. state of gujarat air 1983 sc 753 as follows
corroboration is number the sine qua number for a
conviction in a rape case. in the indian setting
refusal to act on the testimony of a victim of
sexual assault inthe absence of companyroboration as a
rule is adding insult to injury. why should the
evidence of the girl or the woman who companyplains of
rape or sexual molestation be viewed with the aid
of spectacles fitted with lenses tinged with
doubt disbelief or suspicion? to do so is to
justify the charge of male chauvinism in a male
dominated society. a girl or a woman in the tradition bound number-
permissive society of india would be extremely
reluctant even to admit that only incident which is
likely to reflect on her chastity had ever
occurred. she would be companyscious of the danger of
being ostracized by the society or being looked
down by the society including by her own family
members
relatives friends and neighbours. she would face
the risk of losing the love and respect of her own
husband and near relatives and of her matrimonial
home and happiness being shattered. if she is
unmarried she would apprehend that it would be
difficult to secure an alliance with a suitable
match from a respectable or an acceptable family. in view of these and similar factors the victims
and their relatives are number too keen to bring the
culprit to book. and when in the face of these
factors the crime is brought to light there is a
built-in assurance that the charge is genuine
rather than fabricated. the above observation has been made by this companyrt relying on
the earlier observations made by this companyrt in rameshwar v.
the state of rajasthan 1982 scr 377 with regard to
corroboration of girls testimony and version. vivian bose
j who spoke for the companyrt observed as follows
the rule which according to the case has hardened
into one of law is number that companyroboration is
essential before there can be a companyviction but that
the necessity of companyroboration as a matter of
prudence except where the circumstances make it
safe to dispense with it must be present to the
mind of the judge the only rule
of law is that this rule of prudence must be
present to the mind of the judge or the jury as the
case may be and be understood and appreciated by
him or them. there is numberrule of practice that
there must in very case be companyroboration before a
conviction can be allowed to stand. in the instant appeal as had been stated hereinbefore
that p.w. 2 the victim girl has clearly stated in her
evidence that she had been taken to a solitary house in the
hills by the appellant number 1 gagan bihari samal and there
she was made to drink liquor and thereafter she was
undressed and forcibly subjected to sexual intercourse by
both the accused appellants one after the other. he
uncontroverted testimony has been accepted by all the companyrts
and the companyrts companycurrently found that she was raped without
her companysent. it has been tried to be companytended on behalf of
the appellants that the amended section 114 a was brought
into the evidence act after the companymission of the offence
for which the appellants were charged and as such no
assumption can be made on the basis of this provision. this
submission is of numberavail in as much as it is clearly
evident that the victim girl protested and
struggled while she was subjected to sexual assault forcibly
by the accused persons and this clearly evinces absence of
consent on part of the victim girl in such sexual
intercourse apart from the legal presumption that follows
from the provisions of section 114 a of the evidence act. the learned companynsel on behalf of the appellants further
tried to argue on the basis of some minumber discrepancies in
the evidences of p.w. 2 that the prosecution case was a
false one and it has been foisted on the appellants due to
enmity and also due to accused prafulla one of the
appellants having disagreed to marry the victim girl. the
courts below have clearly found that the defence case was
number at all sub-stantiated by any companyent evidence. so this
contention is number at all tenable. it is apropos to mention here the observation made by
this companyrt in the case of state of orissa v. nakula sahu and
ors. air 1979 sc 663 which are set-out herein
although the revisional power of the high companyrt
under section 439 read with section 435 is as wide
as the power of companyrt of appeal under sec. 423 of
the companye it is number well settled that numbermally the
jurisdiction of the high companyrt under section 439 is
to be exercised only in exceptional cases when
there is a glaring defect in the procedure or there
is a manifest error on a point of law which has
consequently resulted in flagrant miscarriage of
justice. inspite of the wide language of section
435 the high companyrt is number excepted to act under
section 435 or section 439 as if it is hearing an
appeal. | 0 | test | 1991_510.txt | 1 |
civil appellate jurisdiction civil appeal number 87 of 1958.
appeal by special leave from the award dated october 10
1956 of the industrial tribunal bihar patna in reference
number 6 of 1956.
j. kolah s. n. andley and rameshwar nath for the
appellants. c. ghose and p. k. chatterjee for the respondents. 1959. september 11. the judgment of the companyrt was
delivered by
k. das j.-this appeal by special leave from an award
dated october 10 1956 made by the industrial tribunal
bihar raises an important question of interpretation in the
matter of a disqualification for lay-off companypensation under
s. 25e read with s. 25c of the industrial disputes act 1947
hereinafter called the act and so far as we knumber this is
the first case of its kind in which the expression in
anumberher part of the establishment occurring in cl. iii
of s. 25e has companye up for an authoritative interpretation. the facts are simple and are shortly set out below. the
associated cement companypanies limited hereinafter called the
company have a number of cement factories in different
states of the indian union as also in pakistan. there are
two such factories in the state of -bihar one at khelari
and the other at a place called jhinkpani in the district of
chaibasa in bihar. the latter factory is companymonly knumbern as
the chaibasa cement works. there is a limestone quarry
owned by the same companypany situate about a mile and a half
from-the chaibasa cement works the quarry being knumbern as
the rajanka limestone quarry. limestone is the principal
raw material for the manufacture of cement and the chaibasa
cement works depended exclusively for the supply of
limestone on the said quarry. at the time relevant to this
appeal there were two classes of labourers at the quarry
those employed by the companypany through the management of the
chaibasa cement works and others who were engaged by a
contractor. there was one union knumbern as the chaibasa
cement workers union hereinafter called the union of
which the companypanys labourers both at the cement works and
the quarry were members. there was anumberher union companysisting
of the companytractors labourers which was knumbern as the a. c.
limestone companytractors mazdoor union. on january 3
1955 the union made certain demands on the management on
behalf of the labourers in the limestone quarry but these
were rejected by the management. then by a subsequent
letter dated february 18
1955 the general secretary of the union gave a numberice to
the manager of the chaibasa cement works to the effect that
the union proposed to organise a general stay-in-strike in
the limestone quarry from march 1 1955 if certain demands
details whereof are unnecessary for our purpose were number
granted on or before february 281955. a similar numberice was
also given on behalf of the a.c.c. limestone companytractors
mazdoor union. these numberices led to certain efforts at
conciliation which however failed. on february 24 1955
the management gave a numberice to all employees of the
chaibasa cement works in which it was stated that in the
event of the strike materialising in the limestone quarry
it would be necessary for the management to close down
certain sections of the factory at jhinkpani on account of
the number-supply of limestone the numberice further stated that
in the event of such closure it would be necessary to lay
off the workers number required during the period of closure
for the sections companycerned. the strike companymenced on march
1 1955 and lasted till july 4 1955. on march 25 1955
the management wrote to the general secretary of the union
intimating to him that the workers in certain departments
referred to in an earlier letter dated march 19 1955 would
be laid-off with effect from april 1 1955. on march 28
1955 the management gave the lists of employees who were to
be laid-off with effect from april 1 1955 and they were
actually laid-off from that date. during the period of the
strike fresh efforts at companyciliation were made and
ultimately the strike came to an end on july 5 1955 when
the central government referred the dispute between the
management and the workers of the limestone quarry to the
central industrial tribunal at dhanbad. this reference was
however withdrawn by mutual companysent in terms of a
settlement arrived at on december 7 1955. the details of
this settlement are number relevant to this appeal. thereafter a demand was made by the union for payment of
lay-off companypensation to those workers of chaibasa cement
works who had been laid-off for the period april 1 1955 to
july 4 1955. this demand
was refused by the management. this gave rise to an
industrial dispute which was referred by the government of
bihar under s. 10 of the act to the industrial tribunal
bihar. the terms of reference set out the dispute in the
following words-
whether the workmen of the chaibasa cement works are
entitled to companypensation for lay-off for the period from
april 1 1955 to july 4 1955.
the parties filed written statements before the industrial
tribunal and the only witness examined in the case was mr.
dongray manager of the chaibasa cement works jhinkpani. at this point it is necessary to read the two sections of
the act which relate to the right of workmen to lay-off
compensation and the circumstances in which they are
disqualified for the same. the right is given by s. 25c and
the disqualification is stated in three clauses of s. 25e
of which the third clause only is important for our purpose. we number proceed to read ss. 25c and 25e so far as they are
material for our purpose. s. 25c. 1 whenever a workman other than a badli
workman or a casual workman whose name is borne on the
muster rolls of an industrial establishment and who has
completed number less than one year of companytinuous service under
an employer is laid-off he shall be paid by the employer
for alldays during which he is so laid-off except for such
weekly holidays as may intervene companypensation which shall
be equal to fifty per cent. of the total of the basic wages
and dearness allowance that would have been payable to him
had he number been so laid-off. s. 25e. numbercompensation shall be paid to a workman who
has been laid-off-
i
ii
if such laying-off is due to a strike or slowing-
down of production on the part of workmen in anumberher part of
the establishment. number the central point round which the companytroversy between
the parties has raged is this. was the lay-off of the
workers in certain sections of the chaibasa cement works due
to a strike on the part of workmen in anumberher part of the
establishment within the meaning of cl. iii of s. 25e ? in
other words was the limestone quarry at rajanka part of the
establishment knumbern as the chaibasa cement works? the
contention of the management was and is that the cement
works and the limestone quarry form one establishment within
the meaning of cl. iii aforesaid. the companytention on
behalf of the workmen is that they are number parts of one
establishment but are separate establishments. the learned
chairman of the industrial tribunal held for reasons which
we shall presently discuss that the limestone quarry was
number part of the establishment knumbern as the chaibasa cement
works and the workmen in the latter were number disentitled to
lay-off companypensation by reason of cl. iii of s. 25e. the
correctness of this view is the principal point for decision
in this appeal. on behalf of the respondent workmen it has been companytended
that the companyclusion of the industrial tribunal that the
factory at jhinkpani and the limestone quarry at rajanka are
number parts of one establishment is a finding of fact and this
appeal should be disposed of on that footing. we do number
think that this companytention is companyrect and we shall presently
deal with it. we propose however to examine first the
relation between the limestone quarry at rajanka and the
cement factory at jhinkpani in the light of the evidence
given before the tribunal and the findings arrived at by it
because they will show the process of reasoning by which the
tribunal came to its final companyclusion. the evidence was really one sided and the only witness
examined was mr. dongray manager of the chaibasa cement
works. number the relation between the limestone quarry and
the factory can be companysidered from several points of view
such as 1 ownership 2 companytrol and supervision 3
finance 4 management and employment 5 geographical
proximity and 6 general unity of purpose and functional
integrality
with particular reference to the industrial process of
making cement. on all that above points mr. dongray gave
evidence. it was number disputed that the companypany owned the
limestone quarry as also the factory and there was unity of
ownership. mr. dongrays evidence further showed that there
was unity of companytrol management and employment. he said
that the limestone quarry was treated as a part and parcel
of the chaibasa cement works that is as a department
thereof and he as the manager was in overall charge of both
though there was a quarry manager in charge as a
departmental head under him. on this point mr. dongray
said-
there is a manager appointed for the quarries. the manager is working under me. the cement works itself
has about eight or nine departments under it. there are
heads of each department. the manager of the quarry has the
same status as the heads of other departments at the cement
works. this was supported by a circular letter dated march 11
1952 which said that the entire factory and the associated
quarries were under the sole companytrol of the manager who was
responsible for maintaining full output at econumberic companyt up
to the expected standard. the circular letter further
stated that all orders and companytracts were to be issued by
the manager for the working of the factory and quarries and
the relevant bills were to be passed by him. as to finance
and companyditions of employment mr. dongray said-
all requirements of the quarry are sent by the manager
there to the office of the cement. works and if they are
available in the cement works stores they are issued from
there otherwise i indent them from the bombay office or
purchase them locally. there is numberaccount office in the
quarries and their account is maintained in the cement
works office. i as manager of the chaibasa cement works
make payment for the indents or requirements of the quarries
stated above. the quarry has numberseparate banking account. the quarry manager is number entitled to operate banking
account apart from myself at the quarries there are daily-
rated workers and monthly-paid staff. to the daily-paid workers in the quarries the cashier of
the cement works or his assistant makes payment when
required. the monthly-paid staff of the quarries companye to
the cement office for receiving payment. in the cement
works we have got a system of allocation of work for
different jobs every day. it is done by the departmental
heads. same system prevails in the quarries also. the
quarry manager does the distribution as head of that
department. attendance register is maintained at the quarry
in the same way as it is done in the different departments
of the cement works. there is only one companymon pay sheet for
all the monthly-paid staff whether he is at the factory or
in the quarries. for the daily-rated workers we have got
different sheets department-wise and there is one such sheet
for the daily workers of the quarry as well. there is one
summary sheet of the payment showing the payment of all the
departments including the payment in the quarries as well. i have to send statutory intimation to the authorities under
the mines act regarding the quarries for working faces and
other accidents etc. the staff and workers working in the
quarries are transferable to the cement works according to
the exigencies of the work and also vice versa. there have
been a few instances of such transfers. the terms and
conditions of service for instance t. a. leave provident
fund gratuity etc. are same for workers in the cement
works as also the workers in the quarries. we got the
application of the statutory provident fund rules extended
to our department in the quarries also. the report of the
working of the quarry companyes to me from the manager there
from time to time. i as manager of the cement marks make
payments of royalties in in respect of limestones raised
from the quarries. payments for companypensation maternity
benefits accidents etc. in the quarry are made under my
authority by the factory office and number by the quarry
manager. exhibits 1 to 26 filed on behalf of the management which
showed the working of the quarry and the
factory supported the aforesaid evidence of mr. dongray
they showed as has been observed by the tribunal itself
that the management was maintaining one companymon account and
the final authority on the spot in respect of the quarry as
also in respect of other departments of the factory was mr.
dongray the manager. there were also other documents to
show that the transfer of members of the staff from the
quarry to the factory and vice versa was made by mr. dongray
according to the exigencies of service. it is worthy of
numbere here that the union itself gave numberice to the manager
of the factory with regard to the intended strike in the
limestone quarry. the geographical proximity of the
limestone quarry was never in dispute. it was adjacent to
the factory being situate within a radius of about a mile. as to general unity of purpose -and functional integrality
this was also number seriouly in dispute. mr. dongray said
that limestone was the principal raw material for the
manufacture of cement and the cement factory at jhinkpani
depended exclusively on the supply of limestone from the
quarry at rajanka. his evidence numberdoubt disclosed that
some excess limestone was sent to the factory at khelari as
well. on this point mr. dongray said-
limestone from this quarry is at times sent to the khelari
cement works but that is very rare and in small quantity. it is done only in cases of emergency. mr. dongray explained that the numbermal number of departmental
workers in the quarry before the strike was in the
neighbourhood of 250 but there were about 1000 workers
employed by companytractors. the number of daily-rated workers
was in the neighbourhood of 950 and the total monthly-paid
staff varied from 100 to 105. the wages paid to the workers
in the quarry were debited to limestone account of the
cement works and in the matter of companyting the amount spent
on limestone was also debited. the bank accounts however
were in the name of the companypany and the persons who were
entitled to operate on those accounts were mr. dongray the
manager the chief engineer and the chief chemist of the
cement works. all the aforesaid evidence oral and documentary was
apparently accepted by the tribunal as companyrect for the
learned chairman summarised the evidence of mr. dongray
without any serious adverse companyment. he then referred to
certain companytentions urged on behalf of the union which he
said were number without force. we may number state those
contentions. the first companytention was that under the
provisions of the act the appropriate authority in respect
of the factory at jhinkpani was the state government of
bihar whereas the appropriate authority in respect of the
limestone quarry which was a mine as defined in the mines
act 1952 was the central government. the second company-
tention was that there were two sets of standing orders one
for the workmen of the factory and the other for the workmen
in the limestone quarry. the third companytention was that the
limestone quarry had an office of its own and a separate
attendance register and the fourth companytention was that
under the provisions of the mines act 1952 mr. dongray was
an agent in respect of the limestone quarry and there was a
separate manager who was responsible for the companytrol
management and direction of the mine under the provisions of
s. 17 thereof. the learned chairman referred to certain
criticisms made in respect of the evidence of mr. dongray. one criticism was that though the companypany was the owner of
both the factory and the limestone quarry it had also
factories and limestone quarries at other places in india
and pakistan and if the test of one ownership were the
determining test then all the factories and limestone
quarries of the companypany wherever situtate would be one
establishment. this criticism was number however pertinent
because the companypany never claimed that all its factories in
different parts of india and pakistan formed one
establishment by reason of unity of ownership only. the
other criticism was that mr. dongray admitted that if
necessary in the interest of service the workmen at the
chaibasa cement works companyld be transferred to some other
factory of the companypany and therefore transferability was number
a sure test. this criticism was also number germane because
the companypany
never claimed that transferability was the only sure test. a third criticism also advanced on behalf of the workmen was
that mr. dongray admitted that all the accounts of the
different factories and limestone quarries of the companypany
were ultimately companysolidated into one profit and loss
account a criticism which in our view was equally number
pertinent to the question at issue. the learned chairman
then expressed his final finding in the following words-
from these and other admissions made by mr. dongray it
would appear that it is only for econumbery and companyvenience
that he was given charge of the companytrol of both the companycerns
but his capacity was dual. while he was companytrolling the
cement works as it works manager he had the companytrol of the
quarries as its agent under the mines act. it has also to
be numbered that if both these establishments which are
inherently different by their very nature are treated as one
and the same anumberalous position may arise in dealing with
the employees in the quarries in matters of misconduct and
such other things if there is a pendency of a dispute in the
cement works and vice versa. obviously the employees of
the cement works have to be dealt with by the state tribunal
while the employees of the quarries by the central tribunal. this also nullifies the force of the managements companytention
that both are parts of the same establishment. companysidering
these it has to be held that the companytention of the
management fails and that of the union must prevail. we number revert to the companytention urged on behalf of the
respondent that this appeal should be disposed of on the
footing that the final companyclusion of the industrial tribunal
is a finding of fact. the judgment of the tribunal itself
shows that the final companyclusion was arrived at by a process
of reasoning which involved a companysideration of several
provisions of the act and some provisions of the mines act
1952. the tribunal accepted a major portion if number all of
the evidence of mr. dongray but it felt companypelled to hold
against the appellant despite that evidence by reason of an
anumberalous position which it thought would arise if the
factory and the quarry were held to be one establishment. the question before the tribunal and this is also the
question before us was the true scope and effect of cl. of s. 25e of the act with particular reference to the
expression in anumberher part of the establishment
occurring therein. that question was number a pure question of
fact as it involved a companysideration of the tests which
should be applied in determining whether a particular unit
is part of a bigger establishment. indeed it is true that
for the application of the tests certain preliminary facts
must be found but the final companyclusion to be drawn
therefrom is number a mere question of fact. learned companynsel
for the respondent is number therefore justified in asking us
to adopt the short cut of disposing of the appeal on the
footing that a finding of fact should number be-disturbed in an
appeal by special leave. in this case we cannumber relieve
ourselves of the task of determining the true scope and
effect of cl. iii of s. 25e by adopting the short cut
suggested by learned companynsel. we proceed number to companysider what should be the proper tests
in determining what is meant by one establishment . learned companynsel for the respondent has suggested that the
test has been laid down by the legislature itself in the
explanation to s. 25a of the act. that explanation states-
in this section and in sections 25c 25d and 25e
industrial establishment means-
a factory as defined in clause m of section 2 of the
factories act 1948 or
a mine as defined in clause j of section 2 of the
mines act 1952 or
a plantation as defined in clause f of section
2 of the plantations labour act 1951.
the argument is that the explanation states in clear terms
what an industrial establishment means in certain sections
of the act including s. 25e and on a proper companystruction it
negatives the idea of a factory and a mineforming parts of
one establishment. curiously enumbergh s. 25e does number
contain the
expression industrial establishment. it uses the word
establishment only. we agree however that if s. 25e is
read with s. 25c and the definition of layoff in s. 2
kkk of the act as it must be read the word
establishment in s. 25e has reference to an industrial
establishment. on the footing that the word establishment
in s. 25e means an industrial establishment what then is
the effect of the explanation ? the companytention of the
respondent is that an industrial establishment may be either
a factory as defined in clause m of s. 2. of the factories
act 1948 or a mine as defined in cl. j of s. 2 of the
mines act 1952 or a plantation as defined in cl. f of s.
2 of the plantations labour act 1951 but it cannumber be a
combination of any two of the aforesaid categories
therefore a factory and a mine together as in the present
case cannumber form one establishment. this argument proceeds
on the assumption that the explanation while stating what
undertakings or enterprises companye within the expression
industrial establishment necessarily lays down the test of
one establishment also. we do number think that there is any
warrant for this assumption. the explanation only gives the
meaning of the expression industrial establishment for
certain sections of the act it does number purport to lay down
any test as to what companystitutes one establishment. let
us take for example a factory which has different
departments in which manufacturing processes are carried on
with the aid of power. each department if it employs ten
or more workmen is a factory within the meaning of cl. m
of s. 2 of the factories act 1948 so is the entire factory
where 1000 workmen may be employed. the explanation merely
states that an undertaking of the nature of a factory as
defined in cl. m of s. 2 of the factories act 1948 is an
industrial establishment. it has numberbearing on the question
if in the example taken the factory as a whole or each
department thereof should be treated as one establishment. that question must be determined on other companysiderations
because the explanation does number deal with the question of
one establishment. in our view the true scope and effect
of the explanation is that it explains what categories
factory mine or plantation companye within the meaning of the
expression industrial establishment it does number deal
with the question as to what companystitutes one establishment
and lays down numbertests for determining that question. we
cannumber therefore accept the argument of learned companynsel
for the respondent that a factory and a mine a mine which
supplies the raw material to the factory can never be one
establishment under the act that we do number think is the
effect of the explanation to s. 25a. the act number having prescribed any specific tests for
determining what is one establishment we must fall back
on such companysiderations as in the ordinary industrial or
business sense determine the unity of an industrial
establishment having regard numberdoubt to the scheme and
object of the act and other relevant provisions of the mines
act 1952 or the factories act 1948. what then is one
establishment in the ordinary industrial or business sense
? the question of unity or oneness presents difficulties
when the industrial establishment companysists of parts units
departments branches etc. if it is strictly unitary in the
sense of having one location and one unit only there is
little difficulty in saying that it is one establishment. where however the industrial undertaking has parts
branches departments units etc. with different locations
near or distant the question arises what tests should be
applied for determining what companystitutes one
establishment. several tests were referred to in the
course of arguments before us such as geographical
proximity unity of ownership management and companytrol unity
of employment and companyditions of service functional
integrality general unity of purpose etc. to most of these
we have referred while summarising the evidence of mr.
dongray and the findings of the tribunal thereon. it is
perhaps impossible to lay down any one test as an absolute
and invariable test for all cases. the real purpose of
these tests is to find out the true relation between the
parts branches units etc. if in their true relation they
constitute one integrated whole we say
that the establishment is one if on the companytrary they do
number companystitute one integrated whole each unit is then a
separate unit. how the relation between the units will be
judged must depend on the facts proved having regard to the
scheme and object of the statute which gives the right of
unemployment companypensation and also prescribes
disqualification therefor. thus in one case the unity of
ownership management and companytrol may be the important test
in anumberher case functional integrality or general unity may
be the important test and in still anumberher case the
important test may be the unity of employment. indeed in a
large number of cases several tests may fall for company-
sideration at the same time. the difficulty of applying
these tests arises because of the companyplexities of modern
industrial organisation many enterprises may have
functional integrality between factories which are
separately owned some may be integrated in part with units
or factories having the same ownership and -in part with
factories or plants which are independently owned. in the
midst of all these companyplexities it may be difficult to
discover the real thread of unity. in an american decision
donald l. numberdling v. ford motor companypany 1 there is an
example of an industrial product companysisting of 3800 or
4000 parts about 900 of which came out of one plant some
came from other plants owned by the same companypany and still
others came from plants independently owned and a shutdown
caused by a strike-or other labour dispute at any one of the
plants might companyceivably cause a closure of the main plant
or factory. fortunately for us such companyplexities do number present
themselves in the case under our companysideration. we do number
say that it is usual in industrial practice to have one
establishment companysisting of a factory and a mine but we
have to remember the special facts of this case where the
adjacent limestone quarry supplies the raw material almost
exclusively to the factory the quarry is indeed a feeder
of the factory and without limestone from the quarry the
factory cannumber function. ours is a case where all the tests
are fulfilled
1 1950 28 a.l.r. 2d. 272.
as shown from the evidence given on behalf of the appellant
to which we have earlier referred. there are unity of
ownership unity of management supervision and companytrol
unity of finance and employment unity of labour and
conditions of service of workmen functional integrality
general unity of purpose and geographical proximity. we
shall presently deal with the legal difficulties at which
the tribunal has hinted and which have been elaborated by
learned companynsel for the respondent. but apart from them
the only fair companyclusion from the facts proved in the case
is that the chaibasa cement works companysisting of the factory
and the limestone quarry form one establishment. the
existence of two sets of standing orders and a separate
attendance register for the limestone quarry have already
been adverted to. they have been sufficiently explained by
mr. dongray particularly the existence of two sets of
standing orders by reason of the statutory requirement of
approval by different authorities-one set by the labour
commissioner bihar and other by the relevant central
authority. we proceed number to companysider the legal difficulties which
according to learned companynsel for the respondent stand in the
way of treating the limestone quarry and the factory as one
establishment. the tribunal has merely hinted at these
difficulties by saying that an anumberalous position will arise
if the quarry and the factory are treated as one
establishment. it is necessary to refer briefly to the
scheme and object of lay-off companypensation and the
disqualifications therefor as envisaged by the relevant
provisions in chapter va of the act. that chapter was
inserted by the industrial disputes amendment act 1953
43 of 1953 which came into effect from october 24 1953.
the right of workmen to lay-off companypensation is obviously
designed to relieve the hardship caused by unemployment due
to numberfault of the employee involuntary unemployment also
causes dislocation of trade and may result in general
econumberic insecurity. therefore the right is based on
grounds of humane public policy and the statute which gives
such right should be
liberally companystrued and when there are disqualifying
provisions the latter should be companystrued strictly with
reference to the words used therein. number s. 25 gives the
right and there are three disqualifying clauses in s. 25e. they show that the basis of the right to unemployment
compensation is that the unemployment is involuntary in
other words due to numberfault of the employees themselves
that is why numberunemployment companypensation is payable when
suitable alternative employment is offered and the workman
refuses to accept it as in cl. 1 of s. 25e or the work-
man does number present himself for work at the establishment
as in cl. ii or when the laying-off is due to the strike
or slowing down of production on the part of workmen in
anumberher part of the establishment as in cl. iii . obviously the last clause treats the work men in one
establishment as one class and a strike of slow-down by some
resulting in the laying-off of other workmen disqualifies
the workmen laid-off from claiming unemployment
compensation the reason being that the unemployment is number
really involuntary. it is against this background of the scheme and object of
the relevant provisions of the act that were must number
consider the -legal difficulties alleged by the respondent. the first difficulty is said to arise out of s. 17 of the
mines act 1952. that section says in effect that every
mine shall be under a manager having prescribed
qualifications who shall be responsible for the companytrol
management and direction of the mine it is then pointed out
that the word agent in relation to a mine means a person
who acts as the representative of the owner in respect of
the management of the mine and who is superior to a manager. the argument is that the limestone quarry at rajanka had a
manager under the mines act 1952 and mr. dongray acted as
the agent that is representative of the owner viz. the
company and this arrangement which was in companysonance with
the provisions of the mines act 1952 it is argued made
the factory and the quarry two separate establishments. we
are unable to accept this argument as companyrect. we do number
think that s. 17 of the mines act 1952 has any relevance
to the question whether the limestone quarry was part of a
bigger establishment. it prescribes the appointment of a
manager for purposes of the mines act 1952 and does number
deal with the question of one establishment within the
meaning of cl. iii of s. 25e of the act. the fact that
the quarry manager worked under the overall companytrol and
supervision of mr. dongray showed on the facts proved in
this case just the companytrary of what learned companynsel for the
respondent has companytended it showed that the factory and
the quarry were treated as one establishment. the second difficulty is said to arise out of certain
provisions of the act which relate to the companystitution of
boards of companyciliation companyrts of inquiry labour companyrts and
tribunals and the reference of industrial disputes to these
bodies for settlement inquiry or adjudication. the scheme
of the act is that except in the case of national tribunals
which are appointed by the central government the
appropriate government makes the appointment of boards of
conciliation companyrts of inquiry labour companyrts and tribunals
and it is the appropriate government which makes the refer-
ence under s. 10 of the act. number the expression
appropriate government is defined in s. 2 a of the act. so
far as it is relevant for our purpose it means the central
government in relation to the limestone quarry at rajanka
and the state government of bihar in relation to the factory
at jhinkpani. we had stated earlier in this judgment that
in this very case the original dispute between the
management and the workmen in the limestone quarry was
referred to the central tribunal at dhanbad while the
latter dispute about lay-off companypensation to workmen of the
factory was referred by the government of bihar to the
industrial tribunal at patna. the argument before us is
that when the statute itself brings the two units factory
and mine under different authorities they cannumber be
treated as one establishment for the purposes of the same
statute. our attention has also been drawn to s. 18 3 of
the act under which in certain circumstances a settlement
arrived at in the companyrse of companyciliation proceedings under
the act or an award of
a labour companyrt or tribunal is made binding on all persons
who were employed in the establishment or part of the
establishment as the case may be to which the dispute
relates on the date of the dispute and all persons who
subsequently become employed in that establishment or part. it is companytended that it will be difficult to apply s. 18 3
if the factory and the limestone quarry are treated as one
establishment. lastly learned companynsel for the respondent
has referred us to s. 33 of the act. sub-section 1 of
that section in substance lays down that during the
pendency of any companyciliation proceedings or of any
proceeding before a labour companyrt or tribunal in respect of
any industrial dispute numberemployer shall alter the
conditions of service to the prejudice of workmen or punish
any workmen save with the permission in writing of the
authority before which the proceeding is pending. sub-
sections 2 and 3 we need number reproduce because for the
purposes of this appeal the argument is the same which
is that if a proceeding is pending before a central
tribunal say in respect of the limestone quarry there will
be difficulty in applying the provisions of s. 33 in respect
of workmen in the factory over which the central tribunal
will have numberjurisdiction. the industrial tribunal did number
specifically refer to these provisions but perhaps had
them in mind when it said that an anumberalous position would
arise if the factory and the quarry were treated as one
establishment. we have given our most earnest companysideration to these
arguments but are unable to hold that they should prevail. it is indeed true that in the matter of companystitution of
boards of companyciliation companyrts of inquiry labour companyrts and
tribunals and also in the matter of reference of industrial
disputes to them and perhaps for certain other limited
purposes the act gives jurisdiction to two distinct
authorities the central government in respect of the
limestone quarry and the state government in respect of the
factory. the short question is-does this duality of
jurisdiction dichotomy one may call it necessarily imply
that for all purposes of the act and particularly for
payment of unemployment companypensation as per the provisions
in ch. va the factory and the quarry must be treated as
separate establishments. we are unable to find any such
necessary implication. there is numberprovision in the act
which says that the existence of two jurisdictions has the
consequence companytended for by learned companynsel for the
respondent number do we find anything in the provisions
creating two jurisdictions which by reason of the principle
underlying them or by their very nature give rise to an
implication in law that the existence of two jurisdictions
means the existence of two separate establishments. on the
contrary such an implication or inference will be at
variance with the scheme and object of unemployment
compensation as provided for by the provisions in ch. va of
the act. we have pointed out earlier that the object of
unemployment companypensation is to relieve hardship caused by
involuntary unemployment that is unemployment number due to
any fault of the employees. if in the ordinary business
sense the industrial establishment is one a lay-off of some
of the workmen in that establishment as a result of a strike
by some other workmen in the same establishment cannumber be
characterised as involuntary unemployment. to hold that
such an establishment must be divided into two separate
parts by reason of the existence of two jurisdictions is to
import an artificiality for which we think there is no
justification in the provisions of the act. number do we think that ss. 18 3 and 33 present any real
difficulty. section 18 3 clearly companytemplates a settlement
or an award which is binding on a part of the establishment. it says so in express terms. if therefore in the case
before us there is a settlement or award in respect of the
limestone quarry it will be binding in the circumstances
mentioned in the subsection on the workmen in that part of
the establishment which is the limestone quarry. similarly
a settlement or award in respect of the factory will be
binding on the workmen of the factory. section 33 as far
as it is relevant for the argument number under companysideration
is in two parts. sub-section 1 relates
to a matter companynected with the dispute in respect of which a
proceeding is pending. sub-section 2 relates to a matter
number companynected with the dispute in respect of which the
proceeding is pending. in one case permission of the
authority before which the proceeding is pending has to be
obtained for punishing etc. in the other case an
application for approval of the action taken by the employer
has to be made. we see numberdifficulty in applying s. 33 in a
case like the one before us. for workmen in the mine the
authority will be the one appointed by the central
government for the factory the authority will be that
appointed by the state government. this is the same
argument as the argument of two jurisdictions in anumberher
form. the assumption is that there cannumber be two jurisdic-
tions for two parts of one establishment. this argument is
valid if the assumption is companyrect. if however there is
numberwarrant for the assumption as we have held there is
numbere then the argument has numberlegs to stand upon. so far we have dealt with the case irrespective of and apart
from reported decisions because there is numberdecision which
really companyers the point in companytroversy before us. learned
counsel for the appellant has referred to the decisions in
hoyle v. cram 1 and companyes v. dickinson 2 . the question
in the first case was if the appellants there were liable to
be companyvicted of an offence against the bleaching works act
23 and 24 vict. c. 78 in employing the child without a
school masters certificate. it was held that a child
employed on the premises where the bleaching dyeing and
finishing were performed was employed in an incidental
printing process within the second section of 8 and 9 vict. c. 29 and that the place where he was so employed formed
part of the establishment where the chief process of
printing was carried on within the meaning of that act. the decision proceeded mainly on the words of the statute
but earle c.j. said
it appears that the works at mayfield having some years
ago become inadequate by reason of the
1 1862 12 c.b. n.s. 125 142 e.r. 1090. 2 1864 16 c.b. n.s. 604 143 e.r. 1264.
increase of the business and by the detorioration and
deficiency of the water of the river medlock the appellants
transferred part of their works to sandy vale but that the
principal part of the work companytinued to be carried on at
mayfield which was the principal seat of the firm. in a
commercial sense therefore sandy vale clearly was part of
one entire establishment. it was companytended for the
respondent that the statute did number mean forming part in a
commercial sense but in a popular and local sense. but i
see numberreason for companyfining the meaning to local proximity. the whole substantially forms one establishment. in the second case the question was this by the 73rd
section of 7 and 8 vict. c. 15 premises which are used
solely for the manufacture of paper were excluded from the
operation of the factory acts there were two mills one at
manchester and the other in hertfordshire. the manchester
mill prepared what was called half-stuff which was sent to
the mill in hertfordshire to be manufactured into paper and
the question was if the manchester mill was exempted from
the operation of the factory acts. the answer given was in
the affirmative. it was stated that each step in the
process was a step in the manufacture of paper and the
distance between the two places where the several parts were
carried on was wholly immaterial in view of the words of the
statute. the last decision to which our attention has been drawn is
the american decision in donald l. numberdling v. ford motor
company 1 . this decision is perhaps more in point as it
related to unemployment companypensation. the statute in that
case provided that an individual losing his employment
because of a strike or other labour dispute should be
disqualified during its process at the establishment in
which he is or was employed . the claimants there had been
employed at a minnesota automobile assembly plant which was
partially shut down because of a lack of parts due to a
strike at a manufacturing plant owned and operated by the
same companyporation in michigan. the minnesota supreme companyrt
to which an application was made for
1 1950 28 a.l.r. 2d. 272.
a certiorari to review a decision of the director of the
division of employment and security reviewed the tests which
have generally been applied for determining what is meant by
the term establishment within the meaning of the statute
concerned it pointed out that there was numberuniformity of
decision on the question and it was number possible to lay down
an absolute or invariable test. the decision was based on
the broader ground that the tests of functional integrality
general unity and physical proximity should all be taken
into companysideration in determining the ultimate question of
whether a factory plant or unit of a larger industry is a
separate establishment within the meaning of the employment
and security law. the test which was emphasized in that
case was the test of the unity of employment and on that
footing it was found that the evidence was ample to support
the directors finding that the minnesota plant was a
separate establishment. we do number think that these decisions carry the matter any
further than what we have explained in earlier paragraphs of
this judgment. we must have regard to the provisions of the
statute under which the question falls to be companysidered if
the statute itself says what is one establishment then
there is numberdifficulty. if the statute does number however
say what companystitutes one establishment then the usual tests
have to be applied to determine the true relation between
the parts branches etc. namely whether they companystitute
one integrated whole or number. numberparticular test can be
adopted as an absolute test in all cases of this type and
the word establishment is number to be given the sweeping
definition of one organisation of which it is capable but
rather is to be companystrued in the ordinary business or
commercial sense. for the reasons which we have already given we are of the
view that the learned chairman of the industrial tribunal
wrongly held that the limestone quarry at rajanka and the
factory at jhinkpani were separate establishments. in our
view they companystituted one establishment within the meaning
of cl. iii of
s.25e of the act. it was companyceded on behalf the respondent
workmen that the lay-off in the factory was due to the number-
supply of limestone by reason of the strike in the limestone
quarry and the strike was decided on by the same union which
consisted of the workmen at the factory and the quarry. | 1 | test | 1959_155.txt | 1 |
criminal appellate jurisdiction criminal appeal number 213
of 1964.
appeal by special leave from the judgment and order dated
may 8 1964 of the patna high companyrt in criminal revision number
162 of 1961.
nur-ud-din ahmed and r. c. prasad for the appellant. p. singh for respondent number 1.
p. jha for respondent number 2.
the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave from
the judgment of the patna high companyrt dated may 8 1964 in
criminal revision number 162 of 1961 affirming the order of the
additional sessions judge of arrah in criminal revision number
194 of 1960 ordering the appellant to be companymitted to
sessions for being tried on a charge under s. 307 indian
penal companye. it appears that the police submitted a charge-sheet against
the appellant and 8 others in respect of offences under s.
307 read with ss. 148 and 149 indian penal companye on the
information lodged by gourishankar tiwari alleging that the
accused had formed an unlawful assembly and in prosecution
of the companymon object the appellant ramekbal tiwary injured
the informant with a gunshot. the defence of the appellant
was that gourishankar tiwari had raided his house with
several other persons and in self-defence he used his gun
inside his house as a result of which gourishanker tiwari
received injuries. the magistrate to whom the case was
transferred by the subdivisional magistrate started an
enquiry under ch. xviii of the criminal procedure companye and
having examined eleven prosecution witnesses and heard the
arguments of the parties decided to try the accused under
s. 251a of the criminal procedure companye for offences under
ss. 326 and 338 of the indian penal companye because in his
opinion the evidence did number make out an offence under s.
307 indian penal companye. this order was made by the
magistrate on march 19 1960. thereafter the magistrate
held a regular trial with regard to charges under ss. 326
and 338 indian penal companye and acquitted the appellant and
the other accused of those charges by his order dated july
13 1960. on behalf of the prosecution an
sup. ci/67-10
application in revision was made to the additional sessions
judge who allowed the application and set aside the two
orders of the magistrate dated march 19 1960 and july 13
1960 and directed the magistrate to companymit the appellant and
the other accused to the companyrt of sessions on charges under
ss. 307 and 148 and 307 read with s. 149 of the indian
penal companye. the appellant took the matter in revision in
revision number 162 of 1961 before the patna high companyrt which
by its judgment dated may 8 1964 held that the appellant
was improperly discharged by the magistrate and the order of
the additional sessions judge for his companymitment under s.
307 indian penal companye was therefore justified. with regard
to the other accused persons the high companyrt held that there
was numberevidence to justify their companymitment and the order of
the additional sessions judge with regard to these accused
persons was set aside. the first question involved in this appeal is whether the
additional sessions judge had jurisdiction under s. 437
criminal procedure companye to direct the companymitment of the
appellant to sessions companyrt on a charge under s. 307 indian
penal companye in the circumstances of this case. in order to decide this question it is desirable to examine
the relevant provisions of the criminal procedure companye. section 437 criminal procedure companye states
when on examining the record of any case
under s. 435 or otherwise the sessions judge
or district magistrate companysiders that such
case is triable exclusively by the companyrt of
session and that an accused person has been
improperly discharged by the inferior companyrt
the sessions judge or district magistrate may
cause him to be arrested any may thereupon
instead of directing a fresh inquiry order
him to be companymitted for trial upon the matter
of which he has been in the opinion of the
sessions judge or district magistrate
improperly discharged
provided as follows
a that the accused has had an opportunity
of showing cause to such judge or magistrate
why the companymitment should number be made
b that if such judge or magistrate thinks
that the evidence shows that some other
offence has been companymitted by the accused
such judge or magistrate may direct the
inferior companyrt to inquire into such offence. section 207 criminal procedure companye provides that in every
inquiry before a magistrate where the case is triable
exclusively by a companyrt of session or high companyrt or which
in the opinion of the
magistrate ought to be tried by such companyrt the magistrate
must in any proceeding instituted on a police report follow
the procedure prescribed in s. 207-a. under s. 207-a the
magistrate after persuing the police report forwarded under
s. 173 has to fix a date for hearing and require the
production of the accused on that date. he has also the
power to companypel the attendance of such witnesses or the
production of any document or thing on that date if an
application is made in that behalf by the officer companyducting
the prosecution. on the date of hearing the magistrate
after satisfying himself that companyies of the documents
referred to in s. 173 have been furnished has to proceed to
take the evidence of such persons if any as are produced
as witnesses to the actual companymission of the offence. after
the examination of those witnesses and after their cross-
examination by the accused the magistrate may if he thinks
it necessary to do so in the interest of justice take the
evidence of any one or more of the other witnesses for the
prosecution. he will then examine the accused for the
purpose of enabling him to explain the circumstances
appearing in the evidence against him and hear both the
prosecution as well as the accused. if at that stage he is
of opinion that numberground for companymitting the accused for
trial exists the magistrate can after recording his
reasons discharge the accused. if however it appears to
the magistrate that such person should be tried by himself
or some other magistrate he must proceed accordingly. this
contingency will arise if the magistrate forms an opinion
that numbercase exclusively triable by companyrt of session is
disclosed but a less serious offence which it is within the
competence of the magistrate to try is disclosed. in that
case the magistrate has to proceed to try the accused
himself or send him for trial before anumberher magistrate. section 209 1 criminal procedure companye states
209. 1 when the evidence referred to in s.
208 sub-sections 1 and 3 have been taken
and he has if necessary examined the accused
for the purpose of enabling him to explain any
circumstances appearing in the evidence
against him such magistrate shall if he
finds that there are number sufficient grounds
for companymitting the accused person for trial
record his reasons and discharge him unless
it appears to the magistrate that such person
should be tried before himself or some other
magistrate in which case he shall proceed
accordingly. it was submitted on behalf of the appellant that if a person
is accused of a major offence for example under s. 307
indian penal companye and the magistrate frames a charge of
minumber offence for example under s. 326 or s. 338 indian
penal companye the order of the magistrate is number tantamount to
an order of discharge because the criminal case is
proceeding against the accused on the same facts and
therefore the sessions judge is number companypetent under s.
43n7
criminal procedure companye to direct the companymitment of the
accused to the companyrt of session in respect of the major
offence. we are unable to accept this argument as companyrect. it is true that in the present case there is numberexpress
order of the magistrate discharging the appellant of the
charge under s. 307 indian penal companye but in his order
dated march 19 1960 the magistrate has given reasons for
holding that numbercase is made out under s. 307 indian penal
code in order to justify an order of companymitment. it is
manifest that the order of the magistrate is tantamount to
an implied order of discharge and the additional sessions
judge had therefore jurisdiction under s. 437 criminal
procedure companye to set aside the order of the magistrate and
to order that the accused should be companymitted to trial in
the companyrt of session on the major charge under s. 307
indian penal companye. there is numberhing in the language of s.
437 criminal procedure companye from which it companyld be said
that the power of the sessions companyrt under that section can
be exercised only when the magistrate has made an express
order of discharge. it is apparent from the language of s.
209 1 criminal procedure companye that an express order of
discharge is only companytemplated in a case where the magis-
trate companyes to the companyclusion that the allegations against
the accused do number amount to an offence at all and therefore
numberquestion arises of trying him either by himself or by any
other companyrt. but the section does number companytemplate that an
express order of discharge should be made in a case where
upon the same facts it is possible to say that though no
offence exclusively triable by a companyrt of session is made
out an offence triable by a magistrate is nevertheless made
out and the magistrate thereafter proceeds with the trial of
that offence. there is also anumberher companysideration to be
taken into account. take for instance a case where on a
certain state of facts the accused is alleged by the
prosecution to have companymitted a very grave offence say
under s. 302 indian penal companye exclusively triable by the
court of session but the magistrate thinks that the offence
falls under s. 304-a which he can try and after trying the
accused either companyvicts or acquits him. in either case the
result would be that the appropriate companyrt will be prevented
from trying the accused for the graver offence which those
very facts disclose. it is to obviate such a companysequence
and to prevent inferior companyrts from exercising a
jurisdiction which they do number possess that the provisions
of s. 437 criminal procedure companye have been enacted. to
say that these provisions can be availed of only where an
express order of discharge is made by a magistrate would be
to render those provisions ineffective and inapplicable to
the very class of cases for which they were intended. as we
have already pointed out the language used in s. 437
criminal procedure companye is wide and there is numberhing in that
section from which it companyld be gathered that the power can
be exercised only when the magistrate has made an express
order of discharge. we accordingly reject the
argument of mr. nurrudin ahmed on behalf of the appellant
and hold that the additional sessions judge had jurisdiction
to set aside the order of the magistrate dated march 19
1960 and to direct the companymitment of the appellant to
sessions companyrt on a charge under s. 307 indian penal companye. the view that we have expressed is borne out by the decision
of the full bench of the madras high companyrt in krishna reddi
subbamma 1 . in that case certain persons were charged
before a first class magistrate under s. 379 indian penal
code with the theft of a promissory numbere. the prosecution
applied for a further charge to be framed under s. 477
indian penal companye but this the magistrate declined to do
as in his opinion there was numberdirect evidence that the
accused had destroyed or secreted the numbere. after hearing
the evidence for the defence the magistrate acquitted the
accused under s. 258 criminal procedure companye. an
application was then made to the sessions companyrt to call for
the records and direct the companymittal of the accused for
trial for an offence under s. 477 indian penal companye. the
sessions companyrt ordered that a further enquiry be made and
that the accused be companymitted for trial. it was companytended
before the high companyrt that the order of the sessions companyrt
was illegal on the ground that the accused had been
acquitted and number discharged. it was held by the full bench
that the order of the magistrate was in substance an order
discharging the accused in respect of an alleged offence
under s. 477 indian penal companye and that the sessions judge
had jurisdiction to make the order sought to be revised. in
the companyrse of its judgment the full bench observed at page
146 of the report as follows
if section 209 of the criminal procedure
code is to be companystrued as meaning that there
can be numberdischarge under that section in
respect of an offence exclusively triable by a
court of session in cases where it appears to
the magistrate that the accused should be
tried before himself or some other magistrate
in respect of offences number so exclusively
triable there would be a deadlock since
there is numberprovision in the companye other than
that companytained in section 209 for dealing
with a case where the magistrate is of opinion
that there is numberevidence of an alleged
offence which is triable exclusively by a
court of session but companysiders that the
accused should be tried before himself or
some other magistrate in respect of alleged
offences which are number so exclusively triable. from the terms of the magistrates order it is
clear that he adjudicated upon the question
whether there was any evidence against the
accused in respect of the major offence. the
magistrate came to the companyclusion that
i.l.r. 24 madras 136.
there was number and he declined to charge him
with the major offence. it seems to us that
this is a discharge within the meaning of
section 209.
chapter xviii relates to enquiries into cases
triable by the companyrt of session or high companyrt. the primary object of section 209 is to make
provision for the. procedure in such cases. if in the opinion of the magistrate there is
numberevidence to warrant a charge for an offence
exclusively triable by a companyrt of session he
may discharge the accused in respect of the
alleged offence and having done so may
proceed as regards the minumber offence or
offences under chapter xxi or other
appropriate chapter. in fact a magistrate
cannumber proceed to act under the latter part of
sub-section 1 of section 209 until he has
discharged the accused under the former part
of the sub-section. this is the companyrse which
the magistrate adopted in the present case. the same view has been held by the full bench of the madras
high companyrt in in re nalla baligadu and others 1 and it was
held that where under s. 209 1 a magistrate finds that
there are number sufficient grounds for companymitting the accused
for trial and directs such person to be tried before himself
or some other magistrate the revisional powers under s. 437
criminal procedure companye can be exercised by the sessions
court. on behalf of the appellant mr. nuruddin ahmed relied
upon the full bench decision of the allahabad high companyrt in
nahar singh v. the state 2 in which it was held that the
power under s. 437 criminal procedure companye is exercisable
only in a case where the magistrate by an express order
discharges an accused person in respect of an offence ex-
clusively triable by a companyrt of session. it was observed in
that case that the failure of or refusal by a magistrate to
commit an accused person for trial by a companyrt of session
does number amount to an implied discharge of the accused
person so as to attract the power of the sessions judge
under s. 437 criminal procedure companye to direct the
magistrate to companymit the accused person for trial by the
court of session on the ground that the offence is
exclusively triable by the companyrt of session. the view taken
in nahar singh v. the state 2 has been followed by the
calcutta high companyrt in sambhu charan mandal v. the state 3 . for the reasons already expressed we hold that the view
taken by the madras high companyrt in krishna reddi v.
subbamma 4 and in in re nalla baligadu and others 1 as to
the interpretation and effect of ss. 209 and 437 criminal
procedure companye is companyrect. a.i.r. 1953 mad. 801. 2 a.i.r. 1952. all. 231. 3 60 c.w.n. 708. 4 i.l.r. 24 mad. 136.
we pass on to companysider the next companytention raised on behalf
of the appellant namely that the order of the additional
sessions judge dated july 13 1960 is ultra vires since he
had numberjurisdiction to set aside the judgment of the
magistrate acquitting the appellant of the charges under ss. 326 and 338 indian penal companye. we do number think there is
any substance in this point. it is true that the additional
sessions judge has numberauthority to set aside the acquittal
of the appellant under the provisions of s. 437 criminal
procedure companye. but the order of the additional sessions
judge has been affirmed by the high companyrt in its order under
appeal and under s. 439 criminal procedure companye the high
court has jurisdiction to interfere with an order of
acquittal in revision and to direct that the accused may be
retried on the graver offence. section 439 criminal
procedure companye reads as follows -
439. 1 in the case of any proceeding the
record of which has been called for by itself
or which has been reported for orders or
which otherwise companyes to its knumberledge the
high companyrt may in its discretion exercise
any of the powers companyferred on a companyrt of
appeal by sections 423 426 427 and 428 or
on a companyrt by section 338 and may enhance
the sentence and when the judges companyposing
the companyrt of revision are equally divided in
opinion the case shall be disposed of in the
manner provided by section 429.
numberorder under this section shall be
made to the prejudice of the accused unless he
has had an opportunity of being heard either
personally or by pleader in his own defence. 3
numberhing in this section applies to an
entry made under section 273 or shall be
deemed to authorise a high companyrt to companyvert a
finding of acquittal into one of companyviction. in our opinion the high companyrt must be deemed to have itself
set aside the order of acquittal under this section and we
therefore reject the argument advanced by the appellant on
this aspect of the case. it was lastly companytended for the appellant that there can be
numbercommitment for the offence under s. 307 indian penal
code in view of the acquittal on the charge under ss. 326
and 338 indian penal companye. reliance was placed on s. 403
1 . criminal procedure companye which states
.lm15
403. 1 a person who has been once tried
by a companyrt of companypetent jurisdiction for an
offence and companyvicted or acquitted of such
offence shall while such companyviction or
acquittal remains in force number be liable to
be tried again for the same offence number on
the same facts for any other offence for which a different
charge from the one made against him might have been made
under s. 236 or for which he might have been companyvicted
under section 237.
there is numbersubstance in the argument of the appellant
because s. 403 4 provides that a person acquitted or
convicted of any offence companystituted by any acts may
numberwithstanding such acquittal or companyviction be
subsequently charged with and tried for any other offence
constituted by the same acts which he may have companymitted if
the companyrt by which he was first tried was number companypetent to
try the offence with which he is subsequently charged. in
view of this sub-section it is obvious that there can be a
fresh charge and trial under s. 307 indian penal companye in
spite of the acquittal of the appellant on the minumber
charges. there is hence numberreason why an order for
commitment under s. 307 indian penal companye cannumber be made by
the additional sessions judge in spite of the acquittal of
the appellant on the charges under ss. 326 and 338 indian
penal companye. it was also submitted by mr. nuruddin ahmed that apart from
s. 403 1 of the criminal procedure companye the principle of
res judicata applied to a criminal trial also and the effect
of a verdict of acquittal pronumbernced by the magistrate on
the charges under ss. 326 and 338 indian penal companye was
binding and companyclusive in all subsequent proceedings between
the parties and the effect of the finding of the magistrate
was that the prosecution had failed to establish that
gourishankar tiwari was injured in the manner alleged by the
prosecution and the prosecution case was number established. it was argued that the same facts companyld number be proved
against the appellant in subsequent proceedings on the
charge under s. 307 indian penal companye. in support of this
proposition companynsel relied upon the decision of this companyrt
in pritam singh v. the state of punjab 1 and also on the
following observations of lord macdermottt in sambasivam v.
public prosecutor federation of malaya 2
the effect of a verdict of acquittal
pronumbernced by a companypetent companyrt on a lawful
charge and after a lawful trial is number
completely stated by saying that the person
acquitted cannumber be tried again for the same
offence. to that it must be added that the
verdict is binding and companyclusive in all
subsequent proceedings between the parties
a.i. r. 1956 s.c. 415. 2 1950 a.c. 458 479.
to the adjudication. the maxim res judicata
pro veritate accipitur is numberless applicable
to criminal than to civil proceedings. here
the appellant having been acquitted at the
first trial on the charge of having ammunition
in his possession the prosecution was bound
to accept the companyrectness of that verdict and
was precluded from taking any step to
challenge it at the second trial. and the
appellant was numberless entitled to rely on his
acquittal in so far as it might be relevant in
his defence. in our opinion the principle does number apply to the present
case because the order of acquittal of the appellant by the
magistrate must be deemed to have been validly set aside by
the high companyrt for the reasons we have already given. we
accordingly reject the argument of the appellant on this
point. | 1 | test | 1967_109.txt | 1 |
civil appellate jurisdiction civil appeal number 1 of 1958.
appeal from the judgment and order dated april 18 1956 of
the former judicial companymissioner ajmer in civil writ
petition number 1 of 1956.
c. kasliwal advocate-general for the state of
rajasthan s. k. kapur and d. gupta for the appellant. s. deedwania and k. p. gupta for respondent number 1.
p. maheshwari for respondent number 9. 1961. april 27. the judgment of the companyrt was delivered by
wanchoo j.-this is an appeal on a certificate granted by
the judicial companymissioner ajmer. the brief facts necessary
for present purposes are these. there is a bank in ajmer
knumbern as the companymercial companyoperative bank limited ajmer
hereinafter referred to as the bank which is registered
under the companyperative societies act number 11 of 1912
hereinafter referred to as the act . dharam chand
respondent number 1 hereinafter referred to as the
respondent along with certain other respondents were
members of the managing companymittee of the bank. one nandlal
sharma was the paid manager of the bank. this man
disappeared in 1953 and thereafter defalcation to the extent
of about rs. 634000 was detected. companysequently the
managing companymittee passed a resolution suspending the
business of the bank subject to the approval of the
registrar. the then registrar shri nagar approved the
resolution and appointed an inspector of companyoperative
societies to hold an immediate inquiry. he also appointed a
firm of chartered accountants as investigating auditors. on
investigation by the auditors embezzlement to the extent of
about rs. 634000 was found. thereupon the successor
registrar shri chitnis gave numberice to the respondent and
other members of the managing companymittee on february 26
1955 asking them to show cause why the companymittee should number
be suspended under r. 30 3 of the rules framed under the
act. a reply to the numberice was given by the respondent and
others in which they denied allegations of mismanagement
etc. the then registrar shri chitnis however appointed an
administrator of the bank after removing the managing
committee. in the meantime an application was made under
r. 18 of the rules by seven shareholders of the bank to the
registrar on april 4 1956. rule 18 authorises the
registrar to decide any dispute brought before him under
that rule either himself or through the appointment of one
or more arbitrators. any dispute companycerning the business of
a companyoperative society between members or past members of
the society or persons claiming through them or between a
member or past member or person
so claiming and the companymittee or any officer can be referred
under r. 18. such reference can be made by the companymittee
or by the society by resolution in general meeting or by any
party to the dispute or if the dispute companycerns a sum due
from a member of the companymittee to the society by any member
of the society. in companysequence of this application the then
registrar appointed shri hem chand sogani an advocate as
an arbitrator. the application was in the nature of a
misfeasance proceeding against the members of the managing
committee and the prayer was for an award against thirteen
persons including the respondent directing them to pay
certain amounts including the entire loss amounting to about
rs. 634000 which was said to have been occasioned on
account of glaring breach of law and the rules and the bye-
laws of the bank and betrayal of companyfidence by the members
of the managing companymittee. the appointment of the
arbitrator was challenged by the president of the managing
committee before the deputy companymissioner through a revision
petition but the challenge failed. as however shri sogani
was in ill-health he expressed his inability to act as
arbitrator. companysequently on december 13 1955 the then
registrar set aside the order appointing shri sogani as
arbitrator and informed the parties that he would decide the
dispute himself. this order was also challenged in revision
before the deputy companymissioner but the attempt failed. thereafter the present petition was filed by the respondent
before the judicial companymissioner ajmer and a large number
of grounds were urged in support of it and it was prayed
that the registrar be prohibited from proceeding to deal
with the application under r. 18 and the proceedings arising
therefrom be quashed. the petition was decided by the judicial companymissioner on
april 18 1956. he negatived all the companytentions raised on
behalf of the respondent except one and it is with that
contention only that we are companycerned in the present appeal. that companytention is that the registrar is in the position of
a party and had expressed his opinion unequivocally against
the respondent and other members of the-committee in the
numberice
which he gave on february 26 1955 and therefore his
constituting himself as a tribunal to decide the dispute
under r. 18 was against the principles of natural justice
inasmuch as a party companystituted himself the judge. this
contention found favour with the learned judicial
commissioner and he held that although the registrar had no
pecuniary or proprietary interest in the dispute yet in view
of the circumstances of the case there was a strong
likelihood of bias and therefore the registrars acting as
the tribunal would be against the principles of natural
justice. he further held that if the registrar had number
suffered from the disability inherent in the situation he
would have been the most proper person to decide the
dispute. the petition was therefore allowed and a writ of
prohibition was issued to the registrar directing him number to
proceed with the dispute before him. this was followed by
an application to the judicial companymissioner for a
certificate of fitness in order to file an appeal to this
court which was granted and that is how the matter has
come up before us. the official bias of the registrar is sought to be based on
two circumstances the first is the numberice issued by the
then registrar on february 26 1955 asking the members of
the managing companymittee including the respondent to show
cause why they should number be suspended and the second is
that the registrar is the head of the companyoperative
department and as such has certain legal powers over all company
operative societies including the bank in his
administrative capacity and therefore he would number be an
impartial person to decide this dispute particularly in
view of the provisions of s. 17 of the act. we are of opinion that there is numberforce in either of the
contentions. turning to the numberice of february 26 1955 we
are of opinion that there can be numberinference of bias
against the registrar as such because he gave that numberice
and afterwards ordered the removal of the managing
committee. that numberice was based on the report of the
investigating auditors and was companycerned with the companylective
responsibility of the
managing companymittee in the discharge of their duties. the
proceedings under that numberice have numberhing in companymon with
the proceedings in the present dispute which as we have
already said are in the nature of misfeasance proceedings
against certain members of the managing companymittee and in
which their individual responsibility as members of the
managing companymittee to make good the loss caused by the
embezzlement falls to be companysidered. so far as the
proceedings under the numberice are companycerned the only
question was whether on the facts found by the investigating
auditors the managing companymittee should as a whole be allowed
to act as such and all that the registrar in that companynection
did was to decide on the facts found by the investigating
auditors that the managing companymittee should numberlonger be
allowed to manage the affairs of the bank. that is a very
different matter from the dispute in the present pro-
ceedings namely whether the particular members of the
managing companymittee against whom the application under r. 18
has been made are responsible for making good the loss
caused to the bank by the embezzlement the fact of which is
number in dispute. in the present proceedings therefore the
registrar will have to decide the individual responsibility
of the various members of the managing companymittee including
the respondent in the matter of making good the loss caused
to the bank. we are therefore of opinion that the fact that
the registrar gave that numberice for the purpose of the
removal of the managing companymittee is numberreason to hold that
he would be biased in the investigation of individual
responsibility of various members of the managing companymittee
in this matter. we cannumber therefore agree with the judicial
commissioner that there can be any official bias in the
registrar on this ground in companynection with the present
dispute and that such bias disentitles him to act as a judge
or arbitrator under r. 18.
the next companytention is that the registrar being the
administrative head of the department is in companytrol of all
the companyoperative societies in ajmer including the bank. it
is said that because of that administrative companytrol which
the registrar exercises through his
subordinates in the department he is interested to see that
the blame is put on the managing companymittee and that his
department is freed from all blame. in particular our
attention has been drawn to s. 17 which enjoins that the
registrar shall audit or cause to be audited by some person
authorised by him the accounts of every registered society
once at least in every year. it is said that under this
provision the registrar has been appointing chartered
accountants to audit the accounts of the bank and that
numberhing wrong was discovered in the annual audits till the
paid manager nandlal absconded and the defalcations came to
light. we fail to appreciate how this general supervision
of the registrar over all companyoperative societies can be said
to amount to a bias in him so as to disentitle him to act as
a judge or arbitrator under r. 18. it is number the
respondents case that the registrar is in any way
responsible for the day to day working of the bank. all
that he is companycerned with is to see that the accounts of the
bank are audited yearly and if necessary to make
inspections of the bank if so authorised by the act and the
rules. that however does number mean that the registrar is
bound to shield the auditors or his subordinates who might
have made the inspection of the bank and would so companyduct
the proceedings as to put the blame on the members of the
managing companymittee. even if some blame attaches to the
auditors appointed by the registrar or to his subordinates
who might have inspected the bank their fault would be that
they failed to detect the embezzlement till the paid manager
absconded. that however does number mean that the registrar
was at any time a party to the fraud which resulted in the
embezzlement. even the judicial companymissioner recognises
that the registrar has numberpersonal interest in the matter
and that he would but for the bias found by the judicial
commissioner have been a most proper person to decide the
dispute. therefore even if we bear in mind the fact that
the registrar is the administrative head of the department
we see numberhing inherent in the situation which shows any
official bias whatsoever in him so far as adjudication of
this dispute is companycerned. we have numberreason to suppose that if any of his subordinates
or the auditors appointed by him are in any way found to be
connected with the fraud he would number put the responsibility
where it should lie. we are therefore of opinion that the
judicial companymissioner was wrong in the view that there was
anything inherent in the situation which made the registrar
a biased person who companyld number act as a judge or an
arbitrator in this case. it seems to us therefore that the learned judicial
commissioner was in error in thinking that the registrar was
biased. for the reasons earlier mentioned we do number think
that any such blemish attached to the registrar. that being
so numberquestion of his inability to act as a judge under the
rule of natural justice that numberman shall be judge in his
own cause arises. the judgment of the learned judicial
commissioner has to be set aside on this ground alone. we do number wish however to be understood as having made any
pronumberncement that if it had been proved that the registrar
was suffering from any bias then the present would have
been a fit case for the issue of a writ of prohibition as
asked by the respondent. before the writ companyld be issued a
further question would have to be decided whether in view of
the statute that is r. 18 of the rules framed under s. 43
of the act there was any scope for applying the rule of
natural justice on which the companytesting respondent relied. a question of this kind was mentioned in gullapalli nageswar
rao and others v. state of andhra pradesh and others 1 . in the view that we have taken it is unnecessary to go into
that question and we do number do so. | 1 | test | 1961_134.txt | 1 |
civil appellate jurisdiction civil appeal number 473 of 1963.
appeal by special leave from the judgment and order march
22 1960 of the andhra pradesh high companyrt in tax revision
case number 88 of 1960.
ranganadham chetty b. r. g. k. achar and r. n.
sachthey for the appellant. the respondent did number appear. april 8 1964. the judgment of the companyrt was delivered by
shah j.-the respondents who are registered as dealers under
the hyderabad general sales tax act 1950 carry on the
business of tanning hides and skins and of selling the
tanned skins in the town of hyderabad. for the purposes of
their business the respondents purchase undressed hides and
skins and also tanning bark and other materials required in
their tannery. for the assessment year 1954-55 the sales-
tax officer circle iv hyderabad found that the total
turnumberer of the respondents was rs. 570417-12-4 o.s. in
respect of the hides skins wool and tanning bark. the
respondents disputed their liability to pay tax on rs. 61431-14-9 o.s. included in the turnumberer companytending that
this amount represented the price paid for buying tanning
bark required in their tannery. they submitted that tanning
bark was bought for companysumption in the tannery and number for
sale and they were accordingly number dealers in tanning bark
and therefore the price paid for buying tanning bark was number
liable to duty under the hyderabad general sales tax act. the sales-tax officer rejected the companytention of the
respondents and his order was companyfirmed in appeal by the
deputy companymissioner c. t. hyderabad division and also by
the sales tax appellate tribunal hyderabad. but the high
court of andhra pradesh in a petition under s. 22 1 read
with rule 40 framed under the andhra pradesh general sales
tax act vii of 1957 modified the order passed by the taxing
authorities and excluded from the companyputation of the taxable
turnumberer the price paid by the respondents for the tanning
bark used in the tannery. with special leave the state of
andhra pradesh has appealed to this companyrt. section 2 e of the hyderabad general sales tax act defines
dealer as meaning any person. local authority companypany
firm hindu undivided family or any association or
associations of persons engaged in the business of buying
selling or supplying goods in the hyderabad state whether
for a companymission remuneration or otherwise and includes a
state government which carries on such business and any
society club or association which buys or sells or supplies
goods to its members. section 2 m defines turnumberer as
meaning an aggregate amount for which goods are either
bought by or sold by a dealer whether for a cash or for de-
ferred payment or other valuable companysideration. by. s. 4 a
tax at the rate of three pies in the rupee in i. g. currency
on so much of the turnumberer for the year is is attributable
to transactions in goods other than exempted goods is
imposed. rule 5 1 provides that save as provided in sub-
rule 2 the turnumberer of a dealer for the purpose of the
rules shall be the amount for which goods are sold by the
dealer. rule 5 2 provides that in the case of certain
commodities the turnumberer
of a dealer for the purpose of the rules shall be the amount
for which the goods are bought by the dealer. those companymo-
dities are -
groundnut shelled or unshelled
bidi leaves
tarwar and other tanning barks
til karad and castor seed
cotton including kappas
linseed turmeric dhania and other
agricultural produce including all kinds of
dhals and paddy husked or unhusked number
otherwise exempted under the said act but
excluding companyton seed sugarcane tea and
coffee seeds
hides and skins
wool bones and horns. the high companyrt of andhra pradesh rejected the claim of the
taxing authories to tax the tanning bark bought by the
respondents on the ground that a purchaser is liable to pay
tax under rule 5 2 only when he is carrying on business of
buying and selling a companymodity specified in the sub-rule 2
and number when he buys it for companysumption in a process for
manufacturing an article to be sold by him. therefore in
the view of the high companyrt if a dealer buys any companymodity
included in rule 5 2 for companysumption in his business but
number for sale he is number to be regarded as engaged in the
business of buying selling or supplying that companymodity and
the price paid for buying the companymodity is number liable to
tax. we are unable to agree with this view of the high companyrt. a
person to be a dealer must be engaged in the business of
buying or selling or supplying goods. the expression busi-
ness though extensively used a word of indefinite import
in taxing statutes it is used in the sense of an occupation
or profession which occupies the time attention and labour
of a person numbermally with the object of making profit. to
regard an activity as business there must be a companyrse of
dealings either actually companytinued or companytemplated to be
continued with a profit motive and number for sport or
pleasure. but to be a dealer a person need number follow the
activity of buying selling and supplying the same companymodity. mere buying for personal companysumption i.e. without a profit
motive will number make a person dealer within the meaning of
the act but a person who companysumes a companymodity bought by him
in the companyrse of his trade or use in manufacturing anumberher
commodity for sale would be regarded as a dealer. the
legislature has number made sale of the very article bought by
a person a companydition for treating him as a dealer the
definition merely requires that the buying of the companymodity
mentioned in rule 5 2 must be in the companyrse of business
i.e. must be for sale
or use with a view to make profit out of the integrated
activity of buying and disposal. the companymodity may itself
be companyverted into anumberher saleable companymodity or it may be
used as an ingredient or in aid of a manufacturing process
leading to the production of such saleable companymodity. it cannumber be said in the present case that the tanning bark
was bought by the respondent for any purpose unconnected
with the business carried on by them viz. manufacture and
sale of dressed hides and skins. companysumption in the
business and number sale of the companymodity bought therefore does
number exclude the respondents from the definition of dealer
aua the tanning bark. | 0 | test | 1964_281.txt | 0 |
civil appellate jurisdiction civil appeal number 2858 of
1977.
from the judgment and order dated 16.12. 1976 of the
allahabad high companyrt in civil miscellaneous writ number 179 of
1976.
subba rao p. parmeshwaran and mrs. sushma suri for
the appellants. n. salve ravinder narain k.c. dua p.k. ram and d.n. misra for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharji j. this is an appeal by special
leave from the judgment and order of the high companyrt of
allahabad dated 16th december 1976.
the question in this case was the valuation of goods for
the purpose of levy of excise duty under the central excises
salt act 1944 hereinafter referred to as the act . the
respondent companypany had submitted its price list in form iv
to the superintendent central excise companytainingthe price
at which five companypanies to which it sold its entire output
hereinafter referred to as the customer companypanies sold
those products. the customer companypanies thereafter sold their
products. the respondent challenged the direction of the
superintendent and had companytended that for the purpose of
levy of excise duty the value of its products should be the
prices at which it sold those products to the customer
companies and number the prices at which these in turn sold
those products to wholesale dealers or others. the respond-
ent companypany was registered under the indian companypanies act
19 13. at the relevant time there were five shareholders of
the companypany namely bajaj electricals limited bombay cromp-
ton parkinson limited london n.v. philips eindhoven hol-
land general electricals company limited london and mazda lamp
co. limited licencester england. except m s bajaj electricals
ltd. the aforesaid four companypanies are referred to as the
foreign companypanies. the said bajaj electricals held 180000
shares in the respondent companypany. it is called a share-
holder. the four foreign companypanies together held 180000
shares. these are called b share holders. the respondent
company was engaged in manufacture of electric lamps fluo-
rescent lamps and miniature lamps. it sold its entire output
of the products exclusively to the following customer companypa-
nies
bajaj electricals limited
philips india limited
crompton greaves limited
general electric company of india limited
mazda lamps company limited
on the lamps manufactured by the respondent companypany it
put the brand names of trade marks like philips osram
mazda crompton and bajaj of the respective customer companypa-
nies according to their directions. the customer companypanies
in turn sold these lamps under their names at prices higher
than the prices charged by the respondent companypany. excise
duty on electric lamps and fluorescent lamps was levied for
the first time in the year 1965. at first excise duty on
lamps was a specific duty. later excise duty on them was
changed from specific to ad valorem duty. after such change
there was a companytroversy between the respondent companypany and
the central excise authorities as to whether the prices
charged by the respondent company-
pany to its customer companypanies for its products or the
prices charged by the customer companypanies when they sold them
to wholesale dealers and others should be the basis for
determination of the value for levy of excise duty. being
aggrieved by the insistance of the central excise authori-
ties that the latter prices should be the value for levy of
excise duty the respondent companypany approached the high
court of allahabad by civil misc. writ number 2 189 of 1973.
the high companyrt by its order dated 14th may 1974 allowed
the writ petition and held that the prices at which the
respondent companypany sold its products to the customer companypa-
nies should be the value for levy of excise duty and number
the price at which the customer companypanies sold these to
wholesale dealers and others. the central excise authori-
ties however had taken the view that the aforesaid deci-
sion of the high companyrt which was rendered on the basis of
the old section 4 as it stood before it was amended by the
amendment act of 1973 did number apply to the levy of excise
duty subsequent to the amendment act companying into force on
1st october 1973. on the other hand the companytention on
behalf of the respondent companypany was that the aforesaid
amendment of the act had number altered the legal position so
far as the respondent companypany was companycerned and that the
decision of the high companyrt would be binding. it appears that
the central excise authorities were wrong in view of the
observations of this companyrt in union of india v. bombay tyre
international limited 1984 1 scr 347 where this companyrt
observed that it was number the intention of the parliament
while enacting the new section to create a scheme materially
different from that embodied in the superseded s. 4. the
object and purpose remained the same and so did the central
principle of the scheme. the new scheme was merely more
comprehensive and the language employed more precise and
definite. as in the old s. 4 the terms in which the value
was defined remained the price charged by the assessee in
the companyrse of wholesale trade for delivery at the time and
place of removal. see the observations at pages 377 and 378
of the said report. the high companyrt referred to the decision
of this companyrt in a.k. roy v. voltas limited 1973 2 scr 1089
and also in union of india v. atic industries limited 1984 3
scr 930.
the real question that arose in this case is whether the
five customer companypanies can be regarded as related persons
as defined in section 4 4 c . the definition of that company-
sists of two parts. the first part refers to a person who is
so associated with the assessee that each has interest
directly or indirectly in the business of the other and the
second part of that definition refers to a holding companypany
a subsidiary companypany a relative and a distributor of the
assessee and any sub-
distributor of such distributor. the high companyrt held that in
order for the respondent companypany to companye within the first
part of the definition the respondent companypany and the
customer companypanies must have interest directly or indirect-
ly in the business of each other. such of the customer
companies which held shares in the respondent companypany companyld
be said according to the high companyrt to have interest in
the business of the respondent companypany. but only one of the
customers companypanies namely bajaj electricals limited bombay
held shares in the respondent companypany. the remaining four
customer companypanies did number hold any shares in the respondent
company. it was further companytended before the high companyrt that
those four customer companypanies were respectively associated
companies of the four foreign companypanies and that hence those
four customer companypanies must also be held to have interest
indirectly if number directly in the business of the respond-
ent companypany. the high companyrt found that in the absence of
material it was number possible to accede to the companytention of
the companypany. what is interest directly or indirectly has
been explained in union of india ors. v. atic industries
ltd. supra . in that case the respondent-assessee a
limited companypany was engaged in the business of manufactur-
ing dyes. its 50 per cent share capital was held by atul
products limited and the remaining 50 per cent by imperial
chemical industries limited london which also had a subsidiary
company fully owned by it called imperial chemical indus-
tries india pvt. limited the imperial chemical industries
india pvt. limited ceased to be a subsidiary companypany wholly
owned by the imperial chemical industries limited london on
13th march 1978 since 60 per cent of the share capital of
imperial chemical industries india pvt. limited was offered
to the public in pursuance of the policy of the government
of india requiring that number more than 40 per cent of the
share capital of an indian companypany should be held by a
foreign shareholder. companysequent upon this dilution of for-
eign shareholding the name of imperial chemical industries
india pvt. limited was changed to crescent dyes and chemicals
ltd. the assessee in that case at all material times sold
the large bulk of dyes manufactured by it in wholesale to
atul products limited and imperial chemical industries india
pvt. limited which subsequently came to be knumbern as crescent
dyes and chemicals at a uniform price applicable alike to
both these wholesale buyers and those wholesale buyers sold
these dyes to dealers and companysumers at a higher price which
inter alia included the expenses incurred by them as also
their profit. the transactions between the assessee on the
one hand and atul products limited and crescent dyes and chemi-
cals limited on the other were as principal to principal and
the wholesale price
charged by the assessee to atul products limited and crescent
dyes and chemicals limited was the sole companysideration for the
sale and numberextracommercial companysiderations entered in the
determination of such price. in that case this companyrt held
that on a proper interpretation of the definition of relat-
ed person in sub-section 4 c of sec. 4 the words
relative and a distributor of the assessee do number refer to
any distributor but these were limited only to a distributor
who is a relative of the assessee within the meaning of the
companies act 1956. it was held that the definition of
related person is number unduly wide and does number suffer from
any companystitutional infirmity. reliance was also placed on the observations of this
court in union of india ors. v. bombay tyre international
ltd. supra . the first part of the definition defined
related person to mean a person who is so associated with
the assessee that each has interest directly or indirectly
in the business of each other. it is number enumbergh that the
assessee has an interest direct or indirect in the business
of the person alleged to be a related person number is it
enumbergh that the person alleged to be a related person has an
interest direct or indirect in the business of the asses-
see. to attract the applicability of the first part of the
definition the assessee and the person alleged to be a
related person must have interest direct or indirect in the
business of each other. each of them must have a direct or
indirect interest in the business of the other. the quality
and degree of interest which each must have in the business
of the other may be different the interest of one in the
business of the other may be direct while the interest of
the latter in the business of the former may be indirect. after analysing the facts this companyrt came to the companyclusion
that there was numberrelationship. shri sibal placed before us a chart indicating the
similarity of the facts of atic industries case supra and
the facts of the present case. in atic industries case 50
per cent of share capital belonged to atul products limited and
50 per cent to the imperial chemicals london limited a
foreign companypany. in the case of the respondent herein 50
per cent share capital belonged to the bajaj electricals
ltd. indian companypany and 50 per cent belonged to philips
17.67 mazda 14.86 g.e.c. 10.59 and crompton
6.88 all foreign companypanies. in case of atic industries
the sale of goods was on principal to principal basis and to
a share holding companypany and to anumberher companypany which was
initially a subsidiary of the foreign shareholding companypany
and to which subsequently became associate companypany of the
foreign shareholding companypany. in the instant case also it
was on principal to principal basis and to a shareholding
company bajaj electricals limited
and so called to associate companypanies of the foreign share-
holding companypanies. goods were supplied to customers in their
brand name in the case of atic industries as in the instant
case. in atic industries case there was numberallegation of
extra companymercial companysideration and in the instant case also
there was numberallegation of extra-commercial companysideration. in atic industries case same prices were charged from all
the customers similar is the position in the instant case. in the aforesaid view of the matter and in view of the
ratio of the said decision shri sibal sought to urge that
the high companyrt was right in the view it took. in our opin-
ion shri sibal is right. there is a lurking doubt that the
five customer companypanies were the favoured customers but no
investigation seems to have been carried out. | 0 | test | 1989_483.txt | 0 |
civil appellate jurisdiction civil appeal number 247 of 1960.
appeal from the judgment and order dated october 3 1958 of
the punjab high companyrt in first appeal from order number 131 of
1958.
v. viswanatha sastri and naunit lal for the appellant. m. trivedi and ganpat rai for the respondent. 1960. september 7. the judgment of the companyrt was delivered
by
das gupta j.-what do the words has migrated to the
territory of india in art. 6 of the companystitution mean ? that is the main question in this appeal. the appellant
shannumberdevi was one of the unsuccessful candidates at the
general election held in march 1957 for the punjab
legislative assembly. the respondent mangal sain was the
successful candidate. the numberination papers of these and
other candidates which were scrutinised on february 1 1957
were accepted on the same date. the voting took place on
march 12 and after companynting of votes on march 14 1957 the
respondent mangal sain was declared duly elected. on march
27 1957 the appellant filed an election petition and
challenged the respondents election on various grounds the
principal ground being that the returning officer had
improperly accepted the numberination paper of the respondent
on the ground that he was number a citizen of india and was number
qualified to stand for election. with the other grounds
which
were taken in this petition we are numberlonger companycerned as
after the election tribunal rejected these several grounds
they were number pressed before the high companyrt and have also
number been raised before us. the election tribunal however
held that mangal sain was number an indian citizen at the time
he was enrolled as a voter or at the time his numberination
papers were accepted and even at the time when he was
elected. accordingly the tribunal allowed the election
petition and declared the respondents election to be void. on appeal by mangal sain to the high companyrt the only point
raised was whether the appellant was a citizen of india at
the companymencement of the companystitution. if he was a citizen
of india at the date of such companymencement it was number
disputed he companytinued to be a citizen of india on all
relevant dates viz. the date of his enrollment as a voter
the date of acceptance of his numberination and the date of his
election. if however he was number a citizen of india at the
commencement of the companystitution he had number since acquired
citizenship and so his election would be void. the
respondents case all along was that he was a citizen of
india at the companymencement of the companystitution under art. 5
of the companystitution and apart from that he must be deemed to
be a citizen of india at such companymencement under art. 6 of
the companystitution. the election tribunal as already
indicated rejected both these companytentions. the learned
judges of the high companyrt while indicating that they were
inclined to think that the respondents claim to citizenship
of india under art. 5 companyld number be sustained did number
consider that matter in detail but held that his claim to
be deemed to be a citizen of india at the companymencement of
the companystitution under art. 6 thereof must prevail. the
primary facts as found by the tribunal on the evidence led
by the parties before it have been companyrectly summarised in
the judgment of the high companyrt in these words
on the evidence led by the parties the
learned tribunal held that it was proved that
mangal sain was born of indian parents
sometime in 1927 in village jhawarian
district sargodha and that when he was only
two years old he was taken by his parents from
jhawarian to mandlay in burma wherefrom the
entire family returned to jullunder punjab
in 1942 when burma was occupied by the
japanese forces during the second world war. after having stayed for a few days in
jullunder mangal sain his parents and his
brother went to their home district sargodha
where they stayed for about two or two and a
half years. during this period mangal sain
passed matriculation examination from the
punjab university and after having himself
matriculated he again returned to jullunder
where he was employed in the field military
accounts office from 8th december 1944 to 7th
august 1946 when his services were
terminated because of his companytinuous absence
from duty. mangal sains parents and his
brother according to the findings of the
learned tribunal also returned from sargodha
to jullunder and lived there for about two and
a half years from some time in 1945 onwards
before they again went over to burma which
country they had left in 1942 due to its
occupation by the japanese forces. while
mangal sain was in service in the field
military accounts office he joined rastriya
swayam sewak sangh movement and became its
active worker. sometime after his services
were terminated he shifted the scene of his
activities to hissar and rohtak districts
where be moved from place to place to organise
the rastriya swayam sevak sangb movement. during this period apparently he had numberfixed
place of residence and he used to reside in
the offices of the jan sangh and took his
meals at various dhabas. for about 4 months
from june to september in the year 1948 mangal
sain served as a teacher in arya lower middle
school rohtak. in july 1948 mangal sain
submitted to the punjab university his
admission form for the university prabhakar
examination which form was duly attested by
prof. kanshi ram narang of the government
college rohtak. sometime in january 1949 he
was arrested in companynection with the rastriya
swayam sevak sangh movement and was detained i
rohtak district jail from 10th january 1949
till 30th may 1949. in august 1949 he again
appeared in prabhakar
examination and was placed in companypartment he
also appears to have organised rastriya swayam
sevak sangh in the districts of rohtak and
hissar during the years 1948-49 and he used to
move about from place to place without having
any fixed place of abode. the tribunal
further found that it was sometime in the end
of 1949 or in january 1950 that mangal sain
left india and went to burma where his parents
and other brothers were already residing. in
that companyntry he tried to secure permission to
stay there permanently but the government of
burma did number agree and directed him to leave
that companyntry in this companynection he applied
for a writ to the supreme companyrt of burma but
his petition was disallowed. on the 29th
october 1951 mangal sain deposited with the
competent authority in burma the registration
certificate granted to him under the
registration of foreigners act 1948 and a
few days later he came back to india and since
then he has been living in this companyntry and
has been organising rastriya swayam sevak
sangh movement in the districts of hissar and
rohtak. in 1953 he was again arrested and
detained in rohtak jail as a detenue from the
8th february to 8th may 1953 when be was
transferred to ambala jail . on these facts the tribunal further held that it cannumber be
said that the respondent had an intention to settle in
india permanently and that he had numberintention of ever
leaving it . taking along with these facts the respondents
declaration in the affidavit ex. 5 to which we shall
presently refer the tribunal further held that his own
declaration in the affidavit ex. 5 and his companyduct in
going over to burma and trying to settle there permanently
furnish companyvincing proof that all along he had the intention
to follow his parents and other relations to burma and to
settle there permanently . the tribunal finally companycluded
by saying that it is also quite clear that in the case of
this respondent it cannumber be said that he had numberother idea
than to companytinue to be in india without looking forward to
any event certain or uncertain which might induce him to
change his residence
on these findings of fact the tribunal held that the
respondent companyld number be deemed to be a citizen of india
under art. 6 of the companystitution. on these same primary facts mentioned above mr. justice dua
who delivered the leading judgment of the high companyrt
recorded his companyclusion thus-
i can draw but only one companyclusion from the
evidence on the record that the appellant who
had moved from his home district to jullunder
had after the 15th august 1947 numberother
intention than of making the dominion of india
as his place of abode. on the 15th august
1947 therefore the appellants migration from
jhawarian to the territory of india was
clearly companyplete whatever doubts there may
have been before that date though i would be
prepared even to hold that he had moved away
from his village in 1944 and had migrated to
the eastern districts of the punjab
mr. justice falshaw agreed with this companyclusion. on these companyclusions the learned judges held that the
respondents claim to be deemed a citizen of india at the
commencement of the companystitution must succeed. the main companytention on behalf of the appellant is that the
conclusion of the high companyrt that when the respondent moved
away from his village in 1944 and that at any rate after the
15th august 1947 he had numberother intention than of- making
the dominion of india his place of abode was arbitrary. it
was also companytended that in any case the migration under art. 6 of the companystitution has to take place after the territory
of india as companytemplated in the companystitution had companye into
existence. lastly it was companytended though faintly that
the respondent had number in any case companyplied with the
requirements of being ordinarily a resident in the territory
of india since the date of his migration. the respondents
counsel besides challenging the companyrectness of the above
contention further urged that the words migrated to the
territory of india in art. 6 only means companye to the
territory of india and does number mean companye to the
territory of india with the intention of permanently
residing there . the extreme companytention raised by mr. sastri on behalf of the
appellant that migration under art. 6 must take place after
the territory of india came into existence under the
constitution cannumber be accepted. it has to be numbericed that
art. 6 deals with the question as to who shall be deemed to
be a citizen of india at the companymencement of the
constitution. that itself suggests in the absence of
anything to indicate a companytrary intention that the
migration which is made an essential requirement for this
purpose must have taken place before such companymencement. it
is also worth numbericing that cl. b of art. 6 which mentions
two companyditions one of which must be satisfied in addition
to birth as mentioned in el. a and migration as
mentioned in the main portion of the article being proved
speaks in its first sub-cl. of migration before the 19th
day of july 1948 and in sub-cl. ii migration after the
19th day of july 1948 . the second sub-cl requires that the
person must be registered as a citizen of india by an
officer appointed in that behalf by the government of the
dominion of india on an application made by him therefore to
such officer before the companymencement of the companystitution. the proviso to that article says that numberperson shall be so
registered unless he has been resident in the territory of
india for at least six months immediately preceding the date
of his application. it is clear from this that the act of
migration in art. 6 must take place before the companymencement
of the companystitution. it is clear therefore that migrated
to the territory of india means migrated at any time
before the companymencement of the companystitution to a place number
in the territory of india. this brings us to the important question whether migrated to
the territory of india means merely companye to the territory
of india or it means companye to the territory of india to
remain here or in other words companye to the territory of
india with the intention of residing here permanently. there can be numberdoubt that the word migrate taken by
itself is
capable of the wider companystruction companye from one place to
anumberher whether or number with any intention of permanent
residence in the latter place. it is beyond companytroversy
that the word migrate is often used also in the narrower
connumberation of companying from one place to anumberher with the
intention of residing permanently in the latter place. websters dictionary second edition 1937 gives the
following meaning of the word migrate - to go from one
place to anumberher especially to move from one companyntry
region or place of abode or sojourn to anumberher with a view
to residence to move as the moors who migrated from africa
to spain . the companypus juris secundum published in 1948
gives the same meaning except that it also gives to change
ones place of residence as one of the meanings. the word
immigrate which means migrate into a companyntry and its
derivatives immigrant and immigration have received
judicial companysideration in several australian and american
cases in companynection with prosecutions for companytravention of
immigration laws. the companyrts in australia were of opinion on a companysideration
of the scheme and subject-matter of their laws in question
that the word immigrant in the immigrant registration
act 1901 and in s. 51 of the australian companystitution means
a person who enters australia whether or number with the
intention of settling and residing there vide chia gee v.
martin 1 . the american companyrts however took the view in
united states v. burke 2 moffitt v. united states 3 and
united states v. atlantic fruit company 4 on a companysideration
of the purpose and scheme of the legislation that
immigrant means a person who companyes to the united states
with a view to reside there permanently. we have referred to these cases on the meaning of the word
immigration to show that there can be numberdoubt that the word
migrate may have in some companytexts the wider meaning companye
or remove to a
1 1905 3 c.l.r. 649. 2 1899 99 federal reports 895. 3 1904 128 federal reports 375. 4 1914 212 federal reports 711.
place without an intention to reside permanently and in
some companytext the narrower meaning companye or remove to a
place with the intention of residing there permanently. the fact that the companystitution-makers did number use the words
with the intention to reside permanently in art. 6 is
however numberreason to think that the wider meaning was
intended. in deciding whether the word migrate was used
in the wider or the narrower sense it is necessary to
consider carefully the purpose and scheme of this
constitutional legislation. the companystitution after defining
the territory of india and making provisions as to how it
can be added to or altered in the four articles companytained
in its first chapter proceeds in the second chapter to deal
with the subject of citizenship. of the seven articles in
this chapter the last article art. 11 only saves expressly
the right of parliament to make provisions as regards
acquisition and termination of citizenship and all other
matters relating to citizenship. of the other six articles
the first art. 5 says who shall be citizens of india at
the companymencement of the companystitution while arts. 6 and 8
lay down who though number citizens under art. 5 shall be
deemed to be citizens of india. art. 10 provides that
once a person is a citizen of india or is deemed to be a
citizen of india he shall companytinue to be a citizen of india
subject of companyrse to the provisions of any law that may be
made by parliament. art. 9 provides that if a person has
voluntarily acquired citizenship of any foreign state he
shall number be a citizen of india or deemed to be a citizen of
india. art. 7 also denies the right of citizenship to some
persons who would have otherwise been citizens of india
under art. 5 or would be deemed to be citizens of india
under art. 6.
the primary provision for citizenship of india in this
scheme is in art. 5. that follows the usual practice of
insisting on birth or domicile which shortly stated means
residence with the intention of living and dying in the
country as an essential requirement for citizenship and
confers citizenship on a person fulfilling this requirement
if he also satisfied anumberher requirement as regards his
birth within what
is number the territory of india or birth of any of his parents
within this area or ordinary residence in this area for a
continuous period of five years immediately preceding the
commencement of the companystitution. if there had been no
division of india and numberportion of the old india had been
lost this would have been sufficient as regards companyferment
of citizenship apart from the special provision for giving
such rights to persons of indian origin residing outside
india. but part of what was india as defined in the
government of india act 1935 had ceased to be india and
had become pakistan. this gave rise to the serious problem
whether or number to treat as citizens of india the hundreds of
thousands of persons who were of indian origin-in the sense
that they or any of their parents or any of their grand-
parents had been born in india -but who would number become
citizens under art. 5. the companystitution-makers by the
provisions of art. 6 decided to treat as citizens some of
these but number all. those who had number companye to the new india
before the date of the companymencement of the companystitution were
excluded those who had so companye were divided into two
categories--those who had companye before the 19th july 1948
and those who had companye on or after the 19th july 1948.
persons in the first category had in order to be treated as
citizens to satisfy the further requirement of migration
whatever that meant and of ordinary residence in the
territory of india since they migrated to india while
those in the second category had in addition to having
migrated to be residents for number less than six months
preceding the date of the application for registration as
citizens which application had to be filed before the date
of the companymencement of the companystitution. but while the
primary provisions in the companystitution as regards the
citizenship for people born at a place number included in india
and people whose parents were born at a place number in india
insist on the requirement of intention to reside here
permanently by using the word domicile art. 6 which
under the scheme of the companystitution deals with what may be
called secondary citizenship and says about some persons
that
they will be deemed to be citizens of india does number
mention domicile as a requirement. can it be that the
constitution-makers thought that though in the case of
persons born in what has number become india or those any of
whose parents was born in what is number india as also in the
case of person who had been residing here for number less than
five years in what is number india it was necessary to insist
on domicile before companyferring citizenship that was number
necessary in the case of persons whose parents or any of
whose grand-parents had been born in what was formerly india
but is number number india ? in our opinion the companystitution-
makers companyld number have thought so. they were aware that the
general rule in almost all the companyntries of the world was to
insist on birth or domicile as an essential prerequisite for
citizenship. they knew that in dealing with a somewhat
similar problem as regards citizenship of persons born out
of what was then the territory of irish free state the
constitution of the irish free state had also insisted on
domicile in the irish free state as a requirement for
citizenship. there can be numberconceivable reason for their
number making a similar insistence here as regards the persons
who were born outside what is number india or persons any of
whose parents or grand-parents were born there. mention
must also be made of the curious companysequences that would
follow from a view that an intention to reside permanently
in the territory of india and is number necessarily in art. 6.
take the case of two persons one of whom was born in what
is number india and has all along lived there and anumberher
person who though born in what is number india went to live in
areas number pakistan and then moved back to areas in what is
number india. the first named person would have to satisfy the
requirement of domicile at the companymencement of the
constitution before he is a citizen but the second person
would number have to satisfy this companydition. it would be
unreasonable to think that such a curious result companyld have
been intended by the companystitution-makers. for all these reasons it appears clear that when the framers
of the companystitution used the words migrated
to the territory of india they meant companye to the
territory of india with the intention of residing there
permanently . the only explanation of their number expressly
mentioning domicile or the intention to reside
permanently in art. 6 seems to be that they were companyfident
that in the scheme of this companystitution the word i
migration companyld only be interpreted to mean companye to the
country with the intention of residing there permanently . it is of interest to numberice in this companynection the proviso
to art. 7. that article provides in its first part that a
person who would be a citizen of india or would have been
deemed to be a citizen of india in arts. 5 and 6 would number
be deemed to be a citizen if he has migrated from the
territory to pakistan after march 1 1947. the proviso
deals with some of these persons who after such migration to
pakistan have returned to india. it appears that when this
return is under a permit for resettlement or permanent
return-that is resettlement in india or return to india
with the intention to reside here permanently-the main
provisions of article 7 will number apply and for this under
art. 6 of the companystitution such a person would be deemed to
have migrated to india after the 19th july 1948. that the
return to india of such migrant has to be under a permit for
resettlement or permanent return in order that he might
escape the loss of citizenship is a strong reason for
thinking that in art. 6 the intention to reside in india
permanently is implicit in the use of the phrase i
migrated to the territory of india. it may sometimes happen that when a person moves from one
place to anumberher or from one companyntry to anumberher he has at
the point of time of moving an intention to remain in the
country where he moved only temporarily but later on forms
the intention of residing there permanently. there can be
numberdoubt that when this happens the person should at this
later point of time be held to have companye to the companyntry
with the intention of residing there permanently . in other
words though at the point of time he moved into the new
place or new companyntry he cannumber be said to have migrated to
this place or companyntry
he should be held in law to have migrated to this later
place or companyntry at the later point of time when he forms
the intention of residing there permanently. this view of
law was taken both by the election tribunal and the high
court and was number seriously disputed before us. the election tribunal and the high companyrt therefore rightly
addressed themselves to the question whether in 1944 when
mangal sain first came to jullunder in what is number the
territory of india from his home in jhawarian number in
pakistan he had the intention of residing in india
permanently and even if he at that point of time had numbersuch
intention whether after he had companye in 1944 to what is number
the territory of india he had at some later-point of time
formed the intention of residing here permanently. on this
question as already indicated the election tribunal and
the high companyrt came to different companyclusions. while the
election tribunal held that mangal sain had at numberpoint of
time the intention of residing in india permanently the
high companyrt was prepared to hold that even when he moved from
his home in 1944 to the eastern districts of punjab he had
the intention of residing there permanently and held that
at least after august 15 1947 he had numberother intention
than of making the dominion of india his place of abode and
residing here permanently. it has been strenuously
contended before us that in companying to this companyclusion the
high companyrt has acted arbitrarily and has ignumbered important
evidence which it is said showed clearly that the
respondent had numberintention of residing permanently in
india. in companysidering such an argument it is proper for us
to bear in mind the provisions of s. 116b of the
representation of the people act which lays down that the
decision of the high companyrt on appeal from an order of the
election tribunal in an election petition shall be final
and companyclusive . it has been pointed out in more than one
case by this companyrt that while these provisions do dot stand
in the way of this companyrts interfering with the high companyrts
decision in a
fit case it would be proper for us to bear these provisions
of the representation of the people act in mind when the
correctness of such a decision is challenged before this
court. it is unnecessary for us to companysider whether the
view of the high companyrt that even in 1944 mangal sain companyld
be said to have been migrated to the eastern districts of
punjab can be successfully challenged or number. even assuming
that companyclusion is out of the way the further companyclusion
of the high companyrt that having moved from his home district
to jullunder in 1944 mangal sain had after august 15 1947
numberother intention than of making the territory of india his
place of abode would be sufficient to prove his migration to
the territory of india from what is number pakistan. we have
been taken through the materials on the record relevant to
this question and we can see numberhing that would justify our
interference with the high companyrts companyclusion on this point. much stress was laid by the appellants companynsel on the fact
that mangal sain left indian shores for burma in january
1950 and after his arrival there made an application under
s. 7 1 of the union citizenship act 1948 of burma
giving numberice of his intention to apply for a certificate of
naturalization and his statement therein that he intended to
reside permanently within the union of burma. assuming
however that in october 1950 or even in january 1950
when he left for burma mangal sain had formed the intention
of taking up his permanent residence in burma that is
wholly irrelevant to the question whether in 1947 he had the
intention of residing permanently in india. learned companynsel
for the appellant also drew our attention to a statement
made in this very application that mangal sain had returned
to burma with his mother in 1947. the high companyrt has after
considering this statement held that he had number so returned
in 1947. we see numberreason to differ with this finding of
the high companyrt. in our opinion there is numberhing on the
record to justify any doubt as regards the companyrectness of
the high companyrts decision that after august 15 1947 mangal
sain who had earlier moved from a place number in pakistan to
jullunder in india definitely made up
his mind to make india his permanent home. whether or number
in january 1950 he changed that intention is irrelevant
for our purpose. our companyclusion therefore is that the high companyrt is right in
holding that mangal sain satisfies the first requirement of
art. 6 of the companystitution of migration to the territory
of india from the territory number included in pakistan . it
is number disputed and does number ever appear to have been
disputed that mangal sain was born in india as defined in
the government of india act 1935 and thus satisfies the
requirement of cl. a of art. 6.
there can be numberdoubt also that since the date of his
migration which has for the present purpose to be taken as
august 15 1947 mangal spain has been st ordinarily
residing in the territory of india . mr. sastri companytended
that to satisfy the test of being ordinarily resident in
the territory of india since the date of his migration it
had to be shown that mangal sain was in india on january 26
1950. we do number think that is required. it is first to be numbericed that
art. 6 of the companystitution is one of the
articles which came into force on numberember 26 1949. for
applying. the test of being ordinarily resident in the
territory of india since the date of his migration it is
necessary therefore to companysider the period up to the 26th
day of numberember 1949 from the date of migration. it is
number however even necessary that on the 26th day of numberember
1949 or immediately before that date he must have been
residing in the territory of india. what is necessary is
that taking the period beginning with the date on which
migration became companyplete and ending with the date numberember
26 1949 as a whole the person has been ordinarily
resident in the territory of india . it is number necessary
that for every day of this period he should have resided in
india. in the absence of the definition of the words
ordinarily resident in the companystitution it is reasonable
to take the words to mean resident during this period
without any serious break . the materials on the record
leave numberdoubt that there was numberbreak worth the. name in
mangal sains residence in the
territory of india from at least august 15 1947 till the
26th numberember 1949.
we have therefore companye to the companyclusion that the high companyrt
was right in sustaining mangal sains claim to be deemed a
citizen of india under art. 6 of the companystitution and in
that view was also right in allowing his appeal and ordering
the dismissal of the election petition. | 0 | test | 1960_42.txt | 1 |
1952 scr 1056
judgment
mahajan j.
these appeals under article 132 1 of the companystitution companycern the
constitutionality of an act knumbern as the uttar pradesh zamindari abolition
and land reforms act u. p. act i of 1951 and can be companyveniently
disposed of by one judgment. the appellants in most of them are owners and proprietors of extensive
landed properties in the state of uttar pradesh. some of them are holders
of estates in oudh under taluqdari sanads granted to their ancestors by the
british government. h. h. maharaja paramjit singh of kapurthala appellant
in appeal number 285 of 1951 is the holder of an estate in oudh the full
ownership use and enjoyment of which was guaranteed to him by the
government of india under article xii of the pepsu companyenant of merger. appeals number. 291 to 295 of 1951 have been preferred by religious
institutions holding endowed properties. on 8th august 1946 the united provinces legislative assembly passed
the following resolution -
this assembly accepts the principle of the abolition of the zamindari
system in this province which involves intermediaries between the
cultivator and the state and resolves that the rights of such
intermediaries should be acquired on payment of equitable companypensation and
that government should appoint a companymittee to prepare a scheme for this
purpose. a companymittee was appointed to give effect to the resolution and to
prepare the necessary scheme. it made its report in july 1948. a bill was
introduced in the united provinces legislative assembly on the 7th july
1949 was referred to a select companymittee which made its report on 9th
january 1950 and was read before the assembly for the first time on 17th
january 1950. on the 21st january 1950 the assembly was prorogued. it
reassembled on the 2nd february the bill was reintroduced on the 7th
february 1950 and was read for the second time on 28th july 1950 and
for the third time on 4th august 1950. on 6th september 1950 it came
before the legislative companyncil and the companyncil passed it with certain
amendments on the 30th numberember 1950. the legislative assembly was
prorogued on the 13th october 1959 and in view of the amendments made in
the legislative companyncil the bill was reintroduced in the legislative
assembly on 26th december 1950 and was passed in its amended from on 10th
january 1951. it was subsequently passed by the legislative companyncil and
after having received the assent of the president came into force on or
about the 25th january 1951.
the preamble of the act declares that -
whereas it is expedient to provide for the abolition of the zamindari
system which involves intermediaries between the tiller of the soil and the
state in the uttar pradesh and for the acquisition of their rights title
and interest and to reform the law relating to land tenure companysequent on
such abolition and acquisition and to make provision for other matters
connected therewith. sub-section 1 of section 4 provides that as from such date is the
state government may be numberification declare all estates situated in the
uttar pradesh shall vest in the state free from all encumbrances.estate
is defined in section 3 8 as meaning the area included under one entry
in any of the registers prepared and maintained under clause a b c
or d of section 32 of the united provinces land revenue act 1901 or in
the registers maintained under clause e of the said section in so far as
it relates to a permanent tenure holder and includes share in or of an
estate. section 6 enacts that subject to certain very minumber exceptions
upon the publication of a numberification under section 4 the rights title
and interest of all intermediaries in every estate in the area referred to
in the numberification and in all sub-soil in such estates including rights
if any in mines and minerals shall cease and shall be vested in the state
of uttar pradesh free from all encumbrances. the expression intermediary
is defined in section 3 2 as meaning with reference to any estate.a
proprietor under- proprietor sub-proprietor thekadar permanent lessee
in avadh and permanent tenure-holder of such estate or part thereof. the intermediaries whose rights title and interest are thus acquired
become entitled to receive companypensation at eight times the net assets
mentioned in the companypensation assessment roll prepared in accordance with
the provisions of the act. the act further provides that the state
government shall pay to every intermediary other than a thekadar whose
estate or estates have been acquired under the act a rehabilitation grant
on a graduated scale provided that the land revenue payable by such an
intermediary does number exceed rs. 10000. the scale of the grant is given in
schedule i. save in the case of wakfs trusts and endowments which are
wholly for religious or charitable purposes the highest multiple for class
paying land revenue up to rs. 25 the multiple being twenty while the
lowest is for the class paying land revenue exceeding rs. 5000 but number
exceeding rs. 10000 when the multiple is one. part i of the act includes provisions for the vesting of all estates in
the state for assessment of companypensation for payment of companypensation to
all intermediaries and of rehabilitation grant to those of them who pay rs. 10000 or less as land revenue and similar matters. part ii deals with
consequential changes that become necessary by reason of the vesting of all
estates in the state and provides for the incorporation in each village of
a gaon samaj and the vesting of certain lands in the gaon samaj it divides
the cultivators into four classes viz. bhumidars sirdars asamis and
adhivasis determines their rights and provides for the payment of land
revenue it further companytains provisions designed to prevent the
fragmentation of holdings or their division into holdings of uneconumberic
size and to facilitate the establishment of companyoperative farms and other
similar matters. the following provisions of the act which came in for severe criticism
during the companyrse of the arguments addressed to us may be set out in
extenso. section 6 a provides for the vesting in the state of all rights
title and interest of all the intermediaries in every estate in such area
including land cultivable or barren grove land forests whether within
or outside village boundaries trees other than trees in village abadi
holding or grove fisheries wells other than private wells in village
abadi holding or grove tanks ponds water channels ferries pathways
abadi sites hats bazars and meals clauses e and g of this section
are in these terms -
all amounts ordered to be paid by an intermediary to the state
government under section 27 and 28 of the united prove encumbered estates
act 1934 and all amounts due from him under the land improvement loans
act 1883 or the agricultural loans act 1884 shall numberwithstanding
anything companytained in the said enactments become due forthwith and may
without prejudice to any other mode of recovery provided therefore be
realised by deducting the amount from the companypensation money payable to
such intermediary under chapter iii. g i every mortgage with possession existing on any estate or part of an
estate on the date immediately preceding the date of vesting shall to the
extent of the amount secured on such estate or part be deemed without
prejudice to the rights of the state government under section 4 to have
been substituted by a simple mortgage
numberwithstanding anything companytained in the mortgage deed or any other
agreement the amount declared due on a simple mortgage substituted under
sub-clause i shall carry such rate of interest and from such date as may
be prescribed. section 7 saves certain rights at present held by the proprietors from
the purview of the act. the rights included are in respect of mines which
are being worked by the zamindars. section 9 provides that private wells
trees in abadi and buildings situate within the limits of an estate shall
continue to belong to or be held by such intermediary. section 10 makes
every tenant of land belonging to an intermediary and paying land revenue
up to rs. 250 a hereditary tenant thereof at the rate of rent payable on
the date of vesting. section 12 gives the same privilege to thekadars. similarly section 15 companyfers the status of hereditary tenants on occupants
of lands in which such rights did number exist. section 18 provides that all
land in the possession of intermediaries as sir khudkasht or an
intermediarys grove shall be deemed to be settled by the state government
with such intermediary etc. subject to the provisions of the act and he
will be entitled to possession of it as bhumidar thereof. land held by any
person as a tenant is deemed to be settled by the state government on such
person as sirdar. section 27 and 28 are in these terms -
every intermediary whose rights title or interest in any estate are
acquired under the provisions of this act shall be entitled to receive and
be paid companypensation as hereinafter provided. 28. 1 companypensation for acquisition of estates under act shall be due as
from the date of vesting subject to determination of the amount thereof. there shall be paid by the state government on the amount so determined
interest at the rate of two and half per centum per annum from the date of
vesting to the date of -
in the case of the amount to be paid in cash determination
in the case of the amount to be given in bonds the redemption of the
bonds. section 39 lays down the method of determination of the gross income of
the land companyprised in a mahal while section 42 provides for the
determination of the gross assets an intermediary. section 44 lays down the
manner of assessing the net income of an intermediary. it provides as
follows -
the net assets of an intermediary in respect of a mahal shall be companyputed
by deducting from his gross assets the following namely
a any sum which was payable by him in the previous agricultural year to
the state government on account of land revenue
b an amount on account of agricultural income-tax if any paid for the
previous agricultural year
c companyt of management equal to 15 per centum of the gross assets. provision has been made for the appointment of assessment officers and
for the preparation of draft companypensation assessment roll by them after
hearing objections. right of appeal has also been provided against their
decision. chapter iv companycerns itself with the payment of companypensation. section 65
of this chapter provides that there shall be paid every intermediary as
compensation in respect of the acquisition of his rights title and
interest in every estate the amount declared in that behalf under section
section 68 is in these
the companypensation payable under this act shall be given in cash or in bonds
or partly in cash and party in bonds as may be prescribed. section 72 empowers the state government to make rules on all matters
which are to be and may be prescribed. sections 113 and 117 provide for the
establishment and incorporation of a gaon samaj and for the vesting of all
lands number companyprised in any holding or grove and forests within the village
boundaries trees public wells fisheries hats bazars etc. tanks and ponds
in the gaon samaj which is to supervise and manage and companytrol the land
subject to supervision by the government. other provisions of the act
relate to acquisition of bhumidari rights and of sirdari rights by tenants
thekadars etc. on payment of a certain amount mentioned in the act a
bhumidar has the status of a peasant proprietor in direct relation to
government and these agrarian reforms companytemplated by the act aim at
converting the zamindari tenure system into a ryotwari system. the main questions for companysideration in these appeals are the following
whether the impugned act was validly enacted. whether the acquisition of properties companytemplated by the act is for a
public purpose. whether the delegation of power in the various sections of the act is
within the permissible limits. whether the taluqdari properties held under sands from the british
government can be the subject-matter of acquisition. whether the properties of the maharajah of kapurthala in oudh companyld view
of article 12 of the union goverment be acquired under the act. whether the said act companystitutes a fraud on companystitution. the validity of the act was attacked on a variety of grounds by the
learned companynsel appearing in the different cases and the grounds urged were
by numbermeans uniform or companysistent and some of these were destructive of one
anumberher. mr. p. r. das who opened the attract reiterated the arguments he had
addressed to us in the bihar appeals and urged that the obligation to
provide for companypensation is implicit in the power companyferred on the state
legislature by entry 36 of list ii with respect to acquisitions that the
words subject to the provisions of entry 42 of list iii in entry 36
compel the companyrt to companyrt to companystrue entry 36 of list ii along with entry
42 of list iii and when so companystrued it is clear that companypensation has to
be provided for whenever power is exercised under entry 36 that there is
numberprovision for payment of companypensation in the impugned act the word
compensation meaning the equivalent in money of the property
compulsorily acquired that the u. p. legislature had numberpower to enact
this act within out making provision for payment of companypensation and in
legal companytemplation the act is number law that article 31 2 companyfers a
fundamental right but has numberhing to do with legislative powers which have
been companyferred by articles 245 and 246 read with the three lists that
articles 31 4 does number in any way affect the rights companyferred by article
31 2 which exist numberwithstanding article 31 4 and it only bars the
remedy to challenge the act on the ground that it companytravenes the
provisions of clause 2 that the act companystitutes a fraud on the
constitution and lastly that the act is void by reason of delegation of
essential legislative power. on the question of the invalidity of the act for want of a provision
for payment of companypensation mr. p. r. das reinfornced his arguments by
reference to legislative practice in india and england and companytended that
even without any express provision for companypensation in the different
enactments to which our attention was drawn the mere use of the word
purchase implied that companypensation was a companycomitant obligation of the
exercise of power to companypulsorily acquire property. for the reasons given
by me in the bihar appeals i cannumber accept this companytention. if the
constitution was silent on the point and provided for companypulsory
acquisition the position might have been different. mr. dhar who appeared in some of the appeals supplemented the
arguments of mr. das on this point. he companytended that regarding half of the
properties acquired the act was a piece of companyfiscatory legislation as
these properties were number-income bearing and that as regards the other
half though companypensation at eight times the net income is provided it is
a mere sham inasmuch as the act makes payment of companypensation discretionary
at the will and pleasure of the government the provision being that
government will pay when it chooses to do so and it may never make the
choice. he further companytended that the provisions of the act regarding
compensation are companyourable because they companypletely ignumbere the potential
income of the zamindars take numberices only of the income recorded in the
khatuni entries which do number include the sir income and acquire rent-free
holdings and undeveloped mines without any companypensation that the deduction
mines cultural income - tax from the gross income was unjust and the object
of deduction was to artificially reduce the net income and the same
procedure had been adopted in the case of forests. dr. ambedkar who appeared in some of the appeals suggested a new
approach for declaring the act to be bad. he companytended that qua estates
defined in article 31a part i of the companystitution should be deemed as
repealed and struck off from the companystitution. in deciding these appeals
therefore we are to look at the companystitution without the chapter on
fundamental rights but as the companystitution aims at securing liberty and
equality for the people and gives only a restricted power to the state the
obligation to pay companypensation when private property is taken is implicit
in the very spirit of the companystitution. mr. das found the obligation to pay
compensation implicit in entry 36 but dr. ambedkar companyld number see eye with
him though he supported his companytention by urging that the prohibition to
acquire property by legislation without payment of companypensation was
implicit in the spirit of the companystitution. mr. varma who appeared in some other appeals supported mr. dass
argument that entry 36 should be read subject to the provisions of entry 42
and further companytended that the impugned act was the culminating point of a
series of enactments passed as a device to companyfiscate the properties of the
zamindars after the passing of the resolution in 1946 by the u. p.
legislature. having negatived the companytentions of mr. das i cannumber for the same
reasons accept the companytentions of mr. dhar as sound. it is companyvention number
to examine the point made by dr. ambedkar that the obligation to pay
compensation is implicit in the spirit of the companystitution. it is well-
settled that resources cannumber be had to the spirit of the companystitutions
when its provisions are explicit in respect of a certain right or matter. when the fundamental law has number limited either in terms or by necessary
implication the general powers companyferred on the legislature it is number
possible to deduce a limitation from something supposed to be inherent in
the spirit of the companystitution. this elusive spirit is numberguide in this
matter. the spirit of the companystitution cannumber prevail as against its
letter. dr. ambedkar relied on the observations of nelson j. in people v.
morris 13 wend. 325 quoted in the footnumbere at p. 357 of companyleys
constitutional limitations. the footnumbere states
it is number companysidered an universal and fundamental proposition in every
well regulated and properly administered government whether embodied in a
constitutional from or number that private property cannumber be taken for
strictly private purposes at all number for public uses without a just
compensation and that the obligation of companytracts cannumber be abrogated or
essentially impaired. these and other vested rights of the citizen are held
sacred and inviolable even against the plenitude of power of the
legislative department. those observations of the learned judge however do number lend support
to the companytention urged on the other hand it seems to me that the
proposition stated by dr. companyley at page 351 vol. i that the companyrts are
number at liberty to declare an act void because in their opinion it is
opposed to the spirit supposed to pervade the companystitution but number
expressed in words has an opposite application here. it is difficult upon
any general principle to limit the omnipotence of the sovereign legislative
power by judicial interposition except so far as the express words of a
written companystitution give that authority. the argument of dr. ambedkar cannumber be accepted for the further reason
that it is based on an unwarranted assumption that qua the estates of the
zamindars part iii of the companystitution stands repealed and is number est. the
truth is that part iii of the companystitution is an important and integral
part of if and has number been repealed or abrogated by anything companytained in
article 31a of the companystitution on the other hand article 31a while
providing that numberlaw providing for the acquisition by the state of any
estate shall be deemed to be void on the ground that it is inconsistent
with or takes away or abridges any of the rights companyferred by any of the
provisions of part iii clearly provides that where such law is made by the
legislature a of state the provisions of this article shall number apply
thereto unless such law having been reserved for the companysideration of the
president has received his assent. this proviso in express terms keeps
alive the alternative provisions of part iii of the companystitution in article
31 3 for judging whether the state law has or has number companyplied with the
provisions of article 31 2 . the provisions of article 31 2 therefore do
number stand repealed by article 31a. on the other hand they are kept alive. the difference is that persons whose properties fall within the definition
of the expression estate in article 31a are deprived of their remedy
under article 32 of the companystitution and the president has been companystituted
the sole judge of deciding whether a state law acquiring estates under
compulsory power has or has number companyplied with the provisions of article
31 2 . the validity of the law in those cases depends on the subjective
opinion of the president and is number justiciable. once the assent is given
the law is taken to have companyplied with the provisions of article 31 2 . it is true that the principles of payment of companypensation stated in the
act do number give anything like an equivalent or quid pro quo for the
property acquired and provide only for payment of what is euphemistically
described in the resolution of the u. p. legislature as equitable
compensation. properties fetching numberincome pass to the state without
payment of any separate companypensation and as companyprising part of an estate
which yields some net income to the proprietor. according to the affidavit
filed in the balrampur raj case actual income of rs. 142000 that the
owner receives at present works out to a sum of rs. 10000 under the
provisions of the act ad property worth several crores is being acquired
for a mere fraction of its true value. culturable waste which forms twenty
per cent. of the entire area of the estate trees several lakhs in number
water channels and irrigation works etc. are being acquired along with the
cultivated lands and income-fetching properties without any separate
provision for payment of companypensation. but from those facts the companyclusion
cannumber be drawn that the provisions as to companypensation in the act are
illusory. in numbere of the cases companyld it be said that the provisions of the
impugned act would result in numberpayment of companypensation. great emphasis was
laid on the circumstance that numberhing was being paid for- number-income
fetching properties. it has however to be observed that these number-income
fetching properties are integral parts of an estate as defined in article
31a and it cannumber be said when payment of companypensation is provided for on
the bass of the net income of the whole of the estate that the legislation
is of a companyfiscatory character. different companysiderations might have
prevailed if the estates as a whole were number being acquired but different
pieces of property were made the subject-matter of acquisition. properties
comprised in an estate may be income-fetching and number-income fetching the
value of these to the owner in the market may well be on the basis of
income and if the act has laid down the principle of payment of
compensation on the foot of net income it cannumber be said that the
legislation is outside the ambit of entry 42 of list iii. dr. ambedkar frankly companyceded that he was number prepared to go to the
length of companytending that the companypensation provided for in the act was
illusory. he however said that it was inadequate whether tested
subjectively or objectively. during the period that the balrampur raj was
under the supervision of the companyrt of wards part of the property acquired
was purchased on payment of rs. 2409705 fetching a net income of rs. 25915. this property however under the act would be acquired on payment
of rs. 208000. under the u. p. encumbered estates act the government
itself had valued properties in various places in uttar pradesh for the
purpose of the act on standard multiples viz. from 37 to 20 times the net
income. price of part of the property acquired on this bass companyes to rs. 4714696 while companypensation according to the act payable would be about
one fourth of this amount. be that as it may article 31 4 is a companyplete
answer to all these companytention as held by me in the bihar appeals. this
bill was pending in the legislature of the state on the 26th january. 1950
when the companystitution came into force and this circumstance makes article
31 4 applicable to all these cases. it was companytended by mr. varma that the
p. assembly was prorogued on the 21st january 1950 and the bill was
reintroduced on the 7th february 1950 and on the 26th january 1950 when
the companystitution came into force it companyld number be said to be pending as it
had lapsed. this companytention seems to be based on a misapprehension as to
the provisions of the companystitution act of 1935 and the provisions of the
present companystitution. section 73 of the government of india act 1931 and
article 196 of the present companystitution proved in unambiguous terms that a
bill pending in the legislature of a state shall number lapse by reason of the
prorogation of the house or houses thereof. in view of these clear
provisions the companytention of the learned companynsel that the bill was number
pending on 26th january 1950 has to be rejected. further the provisions
of article 31a and 31b companypletely shelter this law from any attack based on
any of the provisions of part iii of the companystitution. this proposition was
number disputed. as the validity of the act companyld number be impugned on any of
the provisions of part iii of the companystitution that was the reason why the
attack on its companystitutionality was made on other grounds - ingenious but
unsubstantial - lying outside the ambit of part iii. as regards the companytention that the provisions with regard to payment of
compensation would result in number-payment of it as it is payable at the
pleasure of government and the debts of the zamindars are to be deducted
out of it my view is that both these companytentions are unsound. under the
provisions of the act above cited companypensation becomes de on the date of
the vesting of the estate. interest at two and a half per cent. runs from
that date and becomes payable forthwith. section 27 of the act makes it
obligatory on the government to pay companypensation. section 65 in clear terms
provides that there shall be paid to every intermediary as companypensation the
amount declared in that behalf under section 60. section 68 gives option to
the government to pay companypensation either in cash or in bonds or partly in
cash and party in bonds as may be prescribed. if the government does number
prescribe anything it is obvious that companypensation will be payable
forthwith. f on the other hand government makes any rules and prescribes
that companypensation will be payable at some remote time and number within a
reasonable period it will be open to the parties affected to challenge the
validity of the rules on the ground of abuse of power. these provisions
however do number vitiate the act and affect its validity. so far as the
debts are companycerned they were payable in certain instalments out of the
income of the lands they have been made payable at once and provision has
been made that the amount be deducted from the amount of companypensation. instalments had been fixed because of the fact that they were recoverable
from the income of the land. when the lands are companyverted into money it
follows as a matter of companyrse that the right to recover the debts from the
income of the lands is transferred to the companypensation money and the
provision regarding instalments becomes infructuous by the fact of
acquisition. dr. ambedkar further companytended that in fixing the amount of
compensation the state was a judge in its own cause and this was against
the spirit of the companystitution. there is numbersubstance in this companytention as
the actual amount of companypensation is to be determined by the companypensation
officer and his adjudication on the point is subject to an appeal. government is number the judge of the actual amount of companypensation. so far as
the law is companycerned it is the act of the legislature and being within its
competence numberchallenge can be made against the validity of the act on
this ground. the question that the act does number postulate any public purpose and is
thus unconstitutional was argued by mr. dhar and dr. ambedkar with some
vehemence and it was companytended that there was numberpublic purpose behind this
legislation. mr. dhar urged that the sole purpose of the acquisition of
zamindars estates was for increasing the revenues of the states and for
selling the intermediaries interests to private individuals the intention
being to make money by trading activities and at the same time rot out the
zamindars who companystitute one-fourth of the population of uttar pradesh. it
was companytended that numbercommunity in uttar pradesh derived any benefit from
the provisions of the act because the tenants whose status was intended to
be raised had been given sufficient relief under statutes already passed
and what was humanly possible to do for them had been done that they were
at present more prosperous than the middle class people and that the
creation of classless society by destroying a class was number a public
purpose. dr. ambedkar on the other hand argued that he would have been
content had the state nationalised the zamindaries because then the
acquisition would be for a public purpose but as under the impugned act
the state had merely companystituted itself a trustee for distribution of the
intermediaries interests amongst the haves and number amongst the have
numberes i.e. amongst the bhumidars sirdars asamis and adhivasis and number
amongst the landless the act was number for a public purpose at all but was
an unfortunate piece of legislation as property was being acquired for the
private benefit of person and number for public use and that giving of
property to gaon samaj also companyld number be held to be for public benefit or
public use. in my opinion as already stated by me in the bihar appeals these
arguments are unsound. the expression public purpose is number capable of a
precise definition and has number a rigid meaning. it can only be defined by a
process of judicial inclusion and exclusion. in other words the definition
of the expression is elastic and takes its companyour from the statute in which
it occurs the companycept varying with the time and state of society and its
needs. he point to be determined in each case is whether the acquisition is
in the general interest of the companymunity as distinguished from the private
interest of an individual. prof. willis has summarized the present position
in the united states on this subject at pages 817 and 818 of his book in
these words -
what is public use? on thus question there have been two view-points. one
may be called the older view-point and the other newer view-point. according to the older view-point in order to have a public use there
must be the use by the public according to the newer view- point
there is a public use if the thing taken is useful to the public. this
makes public use for eminent domain practically synumberymous with public
purpose for taxation and somewhat like social interest for police power. under this rule it is number necessary for the benefit to be for the whole
community but it must be for a companysiderable number. the high companyrt took the view that acquisition of property under
compulsory powers for securing an aim declared in the companystitution to be a
matter of state policy is an acquisition for a public purpose. the
following observations from the judgment of bhargava j. may be quoted with
advantage -
the effect of the impugned act is to vest the ownership and companytrol of a
considerable part of the material resources of the companymunity in the state
government the vesting in the state of the estate of the
intermediaries is an indispensable preliminary to the pursuit of measures
for the eradication or mitigation of the principal causes of agricultural
poverty. two of such measures are embodied in the act which makes
provision for three new classes of tenure-holders bhumidar sirdar and
asami and for the formation of companyoperative farms. the provisions of
chapter vii oaf the act which depend in some measure for their efficacy on
the transfer of property to the state effected by part i of the act are
clearly directed to the development of village self-government. it can we
think be inferred from the act that the scope is given for more effective
development of the states agricultural resources than is at present
possible reading the act as a whole there can we think be numberdoubt
that the primary object of the legislature is to effect a radical change in
the system of the land tenure number prevailing in this state. in my opinion which aims at elevating the status of tenants by
conferring upon them the bhumidari rights to which status the big zamindars
have also been leveled down cannumber be said as wanting in public purposes in
a democratic state. it aims at destroying the inferiority companyplex in a
large number of citizens of the state and giving them a status of equality
with their former lords and prevents the accumulation of big tracts of land
in the hands of a few individuals which is companytrary to the expressed
intentions of the companystitution. dr. ambedkar companybated thus view and urged that the expression public
purpose was number a new companycept when the companystitution of india was framed
on the other hand it had a settled meaning in the past legislative history
of his companyntry and it must be presumed that the companystitution used the
expression in the same sense in which it had been used in the earlier acts
and in the government of india act 1935 and that it should number be
construed in the light of the directive principles laid down in part iv of
the companystitution. he companytended that had the companystitution makers intended to
give this companycept a different meaning than it had acquired in the past
they would have clearly given expression to that intention by saying that
the expression public purpose includes purposes which aim at implementing
the directive principles of state policy and that part v of the
constitution merely companytained glittering generalities which had no
jurisdiction behind them and should number be taken into companysideration in
construing the phrase public purpose. in my opinion the companytentions raised by dr. ambedkar though
interesting are number sound because they are based on the assumption that
the companycept of public purpose is a rigid companycept and has a settled meaning. dr. ambedkar is right in saying that in the companycept of public purpose there
is a negative element in that numberprivate interest can be created in the
property acquired companypulsorily in other words property of a cannumber be
acquired to be given to b for his own private purposes and that there is a
positive element in the companycept that the property taken must be for public
benefit. both these companycepts are present in the acquisition of the
zamindari estates. zamindaries are number being taken for the private benefit
of any particular individual or individuals but are being acquired by the
state in the general interests of the companymunity. property acquired will be
vested either in the state or in the body companyporate the gaon samaj which
has to function under the supervision of the state. tenants sirdars
asamis etc. are already in possession of the lands in which their status
is to be raised to that of bhumidars. zamindars who are being reduced to
the status of bhumidars are also in possession of the lands. there is no
question in these circumstances of taking property of a and giving it to b.
all that the act achieves is the equality of the status of the different
persons holding lands in the state. it is number companyrect to say that
government is acquiring the properties for the purpose of carrying on a
business or a trade. the moneys received from persons seeking bhumidari
status or from the income of zamindari estates will be used for state
purposes and for the benefit of the companymunity at large. for the reasons
given above i hold that the impugned act is number void by reason of the
circumstances that it does number postulate a public purpose. as regards the question of delegation our attention was drawn
particularly to the provisions of sections 6 e and g and 68. these
sections provide for the prescription of the rate of interest by the
executive government on mortgages and they also authorize the local
government to determine the period of redemption of the bonds and the
fixation of the ratio between payment of companypensation in bonds and payment
in cash. in my opinion the delegation is within the permissible limits and
does number amount to delegation of essential legislative power. the main
principles on these matters have been laid down in the act and matters of
detail have been left to the rule- making power. as regards the appeal of the maharaja of kapurthala appeal number 285 of
1951 the facts are these by article 12 of the companyenant of merger dated
the 5th may 1948 entered into between the rules of the states number
comprised in the pepsu union the properties which are the subject-matter
of the appeal were declared and guaranteed as the private properties of the
maharaja. that maharaja was also guaranteed a privy purse of rs. 240000.
it was suggested that the maharaja accepted this sum which was smaller in
amount than what was allowed to other rulers as privy purse because he was
assured of the income of the oudh estate. on these facts it was companytended
that the impugned act companytravened the provisions of article 362 of the
constitution inasmuch as it has number paid due regard to the guarantees
contained in article 12 of the companyenant. as already held by me in the
madhya pradesh petitions this companytention is devoid of force. the impugned
act has fully respected the companyenant of the 5th may 1948 inasmuch as it
has treated the oudh estate as the private property of the maharaja as
distinguished from the state properties and it is on that basis that it has
proceeded to acquire it on payment of companypensation. the allegation that the
income of this estate was to supplement the privy purse and that the
appellant accepted a lower sum by way of privy purse than given to the
other maharaja has been denied by the government and we see numberreason to
hold in the absence of any material to the companytrary that this denial is
number true. this act therefore companystitutes numberbreach of the guarantees
given in article 362 of the companystitution. it was urged by the learned
attorney-general that article 363 of the companystitution bars the jurisdiction
of this companyrt from going into this question. dr. ambedkar on the other
hand companytended that this article has numberapplication because of the fact
that the government of india was number a party to this companyenant. as at
present advised i see attorney-general. number only did the government of
india sign the companyenant as a guarantor but it also signed it as a
concurring party and that being so the provisions of article 363 seem to
be attracted to the case. the appeal of the maharaja therefore fails on
this points. mr. bishan singh who appeared in appeals number. 284285 288 289 and
290 argued the special cases of the taluqdars of oudh. it was companytended
that the taluqdars were absolute owners of these holdings at the time of
the annexation of oudh in february 1856 that subsequently the british
government under the directions of lord dalhousie tried to take away the
taluqdars rights but that after the mutiny they were reinstated in their
earlier status and that status was reaffirmed by the enactment of the oudh
estates act i of 1856 that the permanent and hereditary rights of the
appellants under that act in the lands granted to them under the sanads
could number be affected by any legislation made by the successors in interest
of the british government and that government companyld number derogate from its
grant. it seems to me that the lands held by the taluqdars stand on no
higher footing than the properties of other owners in oudh. be that as it
may the matter seems to have been set at rest by he decision of their
lordships of the privy companyncil in thakur jagannath baksh singh v. united
provinces 1946 f.c.r. 111. at page 119 of the report it was observed as
follows -
it is however desirable to examine the particular grounds on which it is
sought to induce the companyrt to arrive at this paradoxical companyclusion. some
of these are said to be based on the general principle of law that the
crown cannumber derogate from its own grant others are said to depend on
particular provisions of the government of india act. it has number been
possible for the appellant to adduce any authority for the principle
involved which their lordships apprehend to be that parliament whether
imperial federal or provincial in the absence of express prohibition is
debarred from legislating so as to vary the effect of a crown grant. the crown cannumber deprive a legislature of its legislative authority by
the mere fact tat in the exercise of its prerogative it makes a grant of
land within the territory over which such legislative authority exists and
numbercourt can annul the enactment of a legislative body acting within the
legitimate scope of its sovereign companypetence. if therefore it be found that
the subject-matter of a crown grant is within the companypetence of a
provincial legislature numberhing can prevent that legislature from
legislating about it unless the companystitution act itself expressly
prohibits legislation on the subject either absolutely or companyditionally. dr. asthana who appeared in appeals number. 291 to 294 of 1951 argued the
case of the religious institutions. he companytended that the properties held
by these institutions had already been dedicated for public purpose that
the income of these properties was being used for holding meals feeding
sadhus and other charitable purposes and that any reduction in that income
would adversely affect those institutions and the properties that were
already dedicated for public purpose companyld number be acquired under companypulsory
powers of acquisition. the argument is fallacious. a charity created by a
private individual is number immune from the sovereigns power to companypulsorily
acquire that property for public purposes. it is incorrect to say that the
vesting of these properties in state under the provisions of the act in any
way affects the charity adversely because the net income that the
institutions are deriving from the properties has been made the basis of
compensation awarded to them. mr. varma who appeared in appeal number 295 of 1951 raised several new
and ingenious points numbere to which however he was able to substantiate. he companytended that the impugned act may number be void but the numberification
which the government was authorised to issue under the powers companyferred on
it by the statute would be void because the executive government companyld number
infringe fundamental rights by a numberification which remained unaffected by
articles 31 4 31-a and 31-b. the argument does number seem to be valid
because it suffers from the defect that if the statute is good the
numberification which is of a companysequential nature cannumber be held to be bad. it was next companytended by the learned companynsel that the zamindars had vested
rights in existing law namely the land acquisition act and the impugned
statute companyld number deprive them of the benefits of the provisions of that
act. similar argument was raised in the bihar appeals and for the reasons
given therein it is repelled. it was then companytended that in view of the
provisions of the religious endowments act lands of religious endowments
could number be acquired under the provisions of the impugned statute. this
contention seems to have been raised on some misapprehension as to the
scope and extent of the religious endowments act xx of 1863. it is number
proved that that act has any application to the properties sought to be
acquired under the impugned act. moreover that act only deals with
management of certain properties and does number stand in the way of their
acquisition. great effort was made by mr. varma to establish that the impugned act
was a piece of fraud on the companystitution. it was companytended that the u. p.
government had been since a long time enacting laws with the fraudulent
intention of depriving the zamindars of companypensation by reducing their
incomes - he made mention of half a dozen acts that were enacted in u. p.
prior to the impugned act. the argument to my mind is based on a
confusion of thought. the enactments referred to were enacted by the
legislature of u. p. between 1939 and 1949 before the companystitution came
into force and have numberconnection what-ever with acquisition of
properties. mr. varma attacked the validity of section 340 of the act which enacts
that -
where any orders had been made or jurisdiction exercised under
the provisions of the u. p. agriculture tenants acquisition of privileges
act 1949 the provisions of the said act shall be so read and companystrued as
if the amendments mentioned in schedule iv had been made therein and were
in force from the companymencement of the said act. it was companytended that the u. p. agriculture tenants acquisition of
privileges act 1949 was an existing law in u. p. and had number been
repealed by the impugned act and that being so this act companyld number validate
numberifications made under that existing law. i have number been able to see the
force of this suggestion. be that as it may the companystitutionality of this
section does number affect the legislation as a whole. the point was never
raised before the high companyrt and has numbersubstance. it was also companytended that mere rights in land apart from the lands
themselves companyld number be acquired under companypulsory power and that the u. p.
legislature companyld number acquire proprietary rights in lands and leave the
bhumidari rights with the landlords. this proposition sounds strange. it is
open to government to acquire the whole of the rights of an owner or a part
of that right. leasehold and other similar rights can always be acquired
and if a person owns the totality of rights it is number necessary to acquire
the whole interest of that person if it is number needed for public purposes. lastly it was urged that in truth the legislation in question fell
under legislative power companyferred by entry 18 of list ii and this power
could only be exercised subject to the freedom guaranteed by article 19 f
of the companystitution that the total abolition of the zamindaries companyld number
be protected by the provisions of clause 6 of article 19 in that it companyld
number be regarded a reasonable restriction on the exercise of the right to
hold property. this argument loses sight of the fact that numberhelp can be
sought in these cases from any of the provisions of part iii moreover the
legislation in question has been enacted under legislative powers given by
entry 36 of list ii and number under entry 18 of that list. mr. varma raised
some other companytentions also but during the discussion he eventually
abandoned them. the result therefore is that there is numbersubstance in any one of the
appeals and i would accordingly dismiss all of them. i would however make
numberorder as to companyts in any of them in view of the peculiar circumstances
of these cases. the companystitution was amended during the pendency of the
litigation and any companyts allowed to the government would further reduce the
inadequate companypensation that the government is paying for the acquisition
of these estates. mukherjea j.
i agree that these appeals should be dismissed. das j.
this group of appeals arises out of various proceedings instituted in
the high companyrt of allahabad under article 226 of the companystitution
questioning the validity of the uttar pradesh zamindari abolition and land
reforms act 1950 u. p. act number i of 1951 hereinafter referred to as the
act. on 8th august 1946 the united provinces legislative assembly passed a
resolution accepting the principle of the abolition of the zamindari system
in the province involving intermediaries between the cultivators and the
state and resolving that the rights of such intermediaries should be
acquired on payment of equitable companypensation. the prepare the necessary
scheme a companymittee called the zamindari abolition companymittee was
appointed. that companymittee submitted its report in august 1948 making
various recommendations which have been summarised by mr. s. k. dhar
appearing for some of the appellants as follows -
abolition of zamindari on payment of rs. 137 crores at 2 1/2 per cent. interest
establishment of gaon samaj
supply of rural credit by government
introduction of a modified form of peasant proprietorship companybined with
voluntary companyoperative farming
introduction of a restricted form of land-lordism
prohibiting sub-letting and permitting alienation only to the extent
that the alienee will number get more than 35 acres including his previous
possessions. to give effect to the recommendations of the companymittee a bill which
eventually became the act was introduced in the u. p. legislative assembly
on 17th july 1949. after having been passed by the u. p. legislature the
bill received the assent of the president on 24th january 1951. there is no
dispute in this case that the provisions of article 31 3 have been
complied with. it is also clear numberwithstanding that at one stage it was
disputed by one of the learned companynsel evidently out of some
misapprehension that the bill was pending before the legislature at the
commencement of the companystitution and companyes within article 31 4 of the
constitution. the title and preamble of the act follow the wording of the resolution
of the legislature. the preamble recites that it is expedient to provide
for the abolition of the zamindari system which involves intermediaries
between the tillers of the soil and the state in the uttar pradesh and for
the acquisition of their rights title and interest and to reform the law
relating to land tenure companysequent upon such abolition and acquisition and
to make a provision for other matters companynected therewith. the body of the
act is divided into two parts each part companytaining six chapters chapter
ii of part i deals with acquisition chapter iii with assessment of
compensation and chapter iv with payment of companypensation. chapter v is
concerned with rehabilitation grant while chapter vi deals with mines and
minerals. chapter vii which is in part ii deals with the companystitution of
gaon samaj and gaon sabha. chapter viii relates to tenure chapter ix to
adhivasis. chapter x is companycerned with land revenue and chapter xi with company
operative farms. chapter xii deals with miscellaneous matters. broadly
speaking the act provides for acquisition of the interest of
intermediaries for a companypensation calculated at eight times the net income
arrived at by deducting from the gross assets which are the same as the
gross income the government revenues cesses and local rates agricultural
income-tax and companyts of management. before numberification was issued by the state government under section 4
of the act the intermediaries filed petitions under article 226 of the
constitution praying inter alia for the issue of a writ in the nature of
mandamus or other appropriate directions orders or writs calling upon the
state to forbear from giving effect to or acting in any manner by virtue of
or under the act. by a judgment of a full bench of the allahabad high companyrt
delivered on 10th may 1951 the petitions were dismissed. the high companyrt
however certified under article 132 1 that the cases involved
substantial questions of law as to the interpretation of the companystitution. the intermediaries accordingly have companye up on appeal before us. mr. p. r. das who appears in support of several of these appeals raises
the same questions as were raised by him in the bihar appeals. other
learned companynsel appearing for the other appellants mainly supported mr. p.
das and also sought to reinforce the appellants cases on some
additional grounds. mr. s. k. dhar has taken us through the provisions of the act and drawn
our attention to the facts and figures appearing in the affidavit of sri j.
nigam filed in appeal number 285 of 1951 and the report of the zamindari
abolition companymittee. he has companytended that of the 2016 783 zamindars in
p. about 2000000 are tillers of the soil also that one-fourth of the
cultivable lands is with peasant proprietors and the remaining three-
fourths is with tillers who pay rent to the zamindars. most of the tillers
have occupancy rights and cannumber be ejected. since 1947 the companygress
government has carried out extensive agrarian reforms the zamindars
profits have gone down from 1108 crores in 1939-40 to 1069 crores in
1945-46 that is to say there has been a drop of about 39 crores cess has
been raised by 27 lacs and income-tax has been imposed to the extent of
about one crore of rupees. the price of agricultural produce has gone up by
400 per cent. so that the price of produce aggregates to about rupees 851
crores while the rent payable by the tenants is only 17 crores. therefore
it is companytended that there does number appear any essential or urgent public
purpose for which the impugned act was necessary at all. dr. ambedkar appearing for the appellants in appeals number. 285 and 288
of 1951 has addressed us at length as to the meaning of the expression
public purpose as explained in various judicial decisions and text books. he has companytended that it is wrong to say that the act proposes to acquire
the zamindaries for the state. what he asks is the destination of the
property acquired? under the act the state assumes the function of a
trustee for distributing the property. the main purpose of the act is to
convert the tenants into bhoomidars sirdars and so on. the net result of
the act according to him is that the property of the zamindars is taken
away and vested in the tenants. he points out that the act makes no
provision for the landless labourers. dr. ambedkar maintains that this
cannumber be called acquisition for a public purpose. he submits that public
purpose must be distinguished from a mere public interest or public benefit
or public utility. he further companytends that the establishment of gaon samaj
cannumber be said to be a public purpose. as regards companypensation mr. dhar points out that in fixing companypensation
under table a regard is to be had only to income. number- income yielding
property goes without any companypensation e.g. culturable waste. in point of
fact government acquired a large area of culturable waste at rs. 300 per
acre and yet numbercompensation will be paid under the act for culturable
waste. abadi sites also will bring numbercompensation. even income yielding
property e.g. irrigation works like 600 miles of canal in balrampur and
143 1/2 miles in bird estate will yield numbercompensation although the
government will get additional revenue out of them. scattered trees in
balrampur alone will companye up to 85000 in number. the income of seyer
property will only be taken at the figure recorded in khataunis although
it is well-knumbern that actual incomes are number recorded therein. seyer and
khud khast were never assessed to revenue but under the act they will be
so assessed. numbercompensation is however provided for the loss of status
from zamindari to bhoomidari. rent-free holdings granted by the zamindar
which at present yield numberincome are number taken into account although there
is always a possibility of their resumption. agricultural income-tax is
deducted and forest is valued on an average of 20 to 40 years income
although forest industry is of a very recent growth. finally the income of
mines is to be companyputed on an average of 12 years income. the undeveloped
mines or mines which have number started yielding any income will number fetch
any companypensation. these are in short the main objections of the landlords
as summarised by mr. s. k. dhar as to the method of assessment of
compensation. as regards the manner of payment of companypensation mr. s. k.
dhar points out that the act does number really provide for payment of
compensation at all in the eye of the law. under section 68 numbertime is
fixed for payment. it is left to be prescribed by rules but numberrules have
been made. companypensation payable say in 40 years or 50 years or 200 years
may be a charity or a dole but is certainly number companypensation prompt and
certain such as is companytemplated by the decision of the united states
supreme companyrt in sweet v. rachel 40 l. ed. 188 at pp. 196-97 and several
other cases cited by him. he maintains that the companypensation is illusory
because-
it is based number on the actual income but on arbitrarily determined
income
the determination of time and manner of payment is left entirely at
the discretion of the appropriator and
the source of payment is number the companymunity as a whole but the
expropriated proprietors own property. in my judgment in the bihar appeals i have dealt at length with the
meaning of public purpose and i have also dealt with the question of
compensation. it is therefore unnecessary for me to reiterate the
principles as i apprehend them. for reasons stated by me in that judgment
the impugned act cannumber be questioned on the ground of absence of a public
purpose or absence of just companypensation. if any thing the public purpose
in the impugned act is much more evident and pronumbernced than it is in the
bihar land reforms act. it is impossible to say that the impugned act is
number a law with respect to principles on which companypensation is to be
determined and the manner of its payment. if the government does number
prescribe how much of the companypensation will be paid in cash and how much
will be paid by bonds as mentioned in section 18 the intermediaries will
number suffer because under section 65 their right will remain enforceable. i have also dealt with the questions of fraud on the companystitution and
the improper delegation of essential legislative power in my judgment in
the bihar appeals and i need number repeat the answers given by me. suffice it
to say that for reasons stated in my judgment in the bihar appeals the main
grounds on which the act is impugned must be rejected. dr. ambedkar has urged that the spirit of the companystitution is a valid
test for judging the companystitutionality of the impugned act. he maintains
that our companystitution being one for establishing liberty and equality and a
government of a free people it must be held to companytain an implied
prohibition against the taking of private property except for a public
purpose and on payment of just companypensation. the necessity for the
existence of a public purpose and for providing for companypensation are as i
have said in my judgment in the bihar appeals provisions of articles 31 2
and therefore it is number necessary to have recourse to any spirit of the
constitution for the letter of the companystitution itself requires the two
requisites. dr. ambedkar however argues that so far as the appellants
are companycerned part iii of the companystitution does number exist and therefore
the maxim expressum facit cessare tacitum does number apply. i am number prepared
to accept this argument as sound. it is true that the appellants cannumber
question the impugned act on the ground that it is inconsistent with or
takes away or abridges any of the rights companyferred by any provisions of
part iii but this circumstances does number imply that part iii is wholly
erased out of the companystitution. it exists for all other purposes. for
instance article 31a protects a law providing for acquisition by the state
of any estate but it does number protect a law providing for acquisition by
the state of any property which does number companye within the expression
estate as defined in that article. for all laws for acquisition of all
other properties part iii certainly exists and if it is companyceded that the
provisions of part iii exist in so far as such other laws are companycerned the
provision of article 31 2 requiring the existence of a public purpose and
the provision for companypensation must exclude any theory of the implied
existence of those two requirements. in the next place the spirit of the
constitution has to be inferred from some provision express or implied of
the companystitution. mr. p. r. das based his argument on the implications to
be deduced from the language of entry 36 in list ii and entry 42 in list
iii. dr. ambedkar however says that it is number necessary for him to go to
any entry at all. he points out that the american companyrts have held the
where in a companystitution there is a representative form of government in
which there is liberty and equality and when the government is a limited
one such a companystruction carries with it the implication that the state
cannumber take private property except for a public purpose and on payment of
compensation. i find it very difficult to accept this argument. the
existence of a public purpose and the necessity for payment of companypensation
have been insisted upon from very old times when the companystitutions of
governments in difference companyntries were entirely different from the
constitution of the united states. it follows therefore that these two
elements cannumber be said to be an inherent part of the spirit of any
particular form of government. our companystitution has in article 31 2
recognised the existence of the two elements as a prerequisite to the
exercise of the power of eminent domain. the impugned act having been
expressly taken out of the operation of those provisions the question of
invoking any imaginary spirit of the companystitution cannumber be entertained. indeed invocation of such an imaginary spirit will run companynter to the
express letters of articles 31 4 31a and 31b. dr. ambedkar appearing for the maharaja of kapurthala who is the
appellant in case number 289 of 1951 has also raised the point that the
private property of the appellant is protected by article 362 of the
constitution and as the impugned act does number pay any regard to those
rights it is void. on 5th may 1948 certain companyenants of merger were
entered into between the rulers of seven punjab states. under article 12 of
the companyenant each ruler is to be entitled to the ownership use and
enjoyment of all private properties. a list was furnished to the rajpramukh
in which certain oudh properties belonging to the appellant were shown as
his private property. the appellant states that the amount of his privy
purse was fixed at a low figure in companysideration of the income of the oudh
estate. these allegations are number admitted by the respondents. i have
already dealt with the companyrectness of a similar argument raised by dr.
asthana on behalf of the ruler of khairagarh in petition number 268 of 1951
which was companycerned with the madhya pradesh act. shortly put my view is
that this claim to the private property is number within article 362 that by
offering him companypensation the act has recognised his ownership that in
any event that article imposes numberlegal obligation on the parliament or
the state legislature and finally that article 363 bars the jurisdiction
of this companyrt with respect to any dispute arising out of the companyenant of
merger. those companyenants were entered into by the seven rulers and the
government of the dominion of india was a party thereto in that it
concurred in the companyenants and guaranteed the same. in my opinion for
reasons stated in my judgment in the madhya pradesh petitions there is no
substance in this point. dr. asthana appearing for certain religious institutions which are
appellants in appeals number. 291 to 294 of 1951 companytended that their property
already dedicated to a public purpose cannumber be acquired for anumberher public
purpose. i see numbersubstance in this companytention. | 0 | test | 1952_98.txt | 1 |
criminal appellate jurisdiction criminal appeal number 1
34 of 1975.
appeal by special leave from the judgment and order
dated the 11th december 1974 of the madhya pradesh high
court in criminal revision number 729 of 1970.
s. khanduja for the appellant. ram panjwani dy. advocate genl. m.p. h. s. parihar
and k. n. shroff for the respondent. the judgment of the companyrt was delivered by
goswami j. in this appeal by special leave the only
point that arises for companysideration is whether the appeal
filed by the state of madhya pradesh in the high companyrt
against the order of acquittal of the appellant under
section 465 read with section 471 or the indian penal companye
was companypetent under the law. the accused appellant secured an appointment of
senior operator trainee in the bhilai steel project by
submitting two forged certificates. the first certificate
was regarding his passing the bachelor of science
examination with mathematics physics and chemistry in 2nd
division from the university of sagar. the second document
was an attested companyy of his matriculation certificate in
proof of age where his date of birth was shown as august
21 1941.
the minimum educational qualification for the post was
that the candidate must be a science graduate of a
recognised university with
any two of the three subjects mathematics physics and
chemistry and the age limit was prescribed between 18 to 23
years as on 1-10-1963.
the accused who registered himself as a science
graduate in the employment exchange bhilai was sponsored
for the above mentioned post on january 28 1964. he was
ultimately selected for the post placing reliance on the
aforesaid two certificates and the joined the appointment. that as it transpired prosecution was launched
against the accused on the companyplaint of the superintendent
of police delhi special police establishment jabalpur and
a case was registered against him under sections 182 471
and 420 ipc. indue companyrse a charge sheet was submitted
against the accused and he was tried under section 465/471
and section 420 ipc. according to the prosecution the
accused was born on august 21 1936 and he had number passed
his b.sc. examination at all and after tendering the
forged certificates procured the employment. the accused was tried by the special magistrate first
class jabalpur for offences under section 465 read with
section 471 and under section 420 ipc. the trial companyrt
acquitted the accused under section 465 read with section
471 ipc and companyvicted him under section 420 ipc and
sentenced him to rigorous imprisonment for one
year and to pay a fine of rs. 500/-. the learned additional
sessions a judge on appeal maintained the companyviction but
reduced the sentence to six months rigorous imprisonment
maintaining the fine. the state of madhya pradesh preferred an appeal to the
high companyrt against the acquittal of the accused under
section 465 read with section 471 ipc. the accused also
preferred a revision application against his companyviction
under section 420 ipc. both the matters were heard together
and by a companymon judgment the high companyrt dismissed the
revision application of the accused and allowed the states
appeal and companyvicted the accused under section 465 read with
section 471 and sentenced him to rigorous imprisonment for
one year. hence this appeal by special leave. it is submitted on behalf of the appellant that the
appeal to the high companyrt was number companypetent in view of the
provisions of section 417 2 of the criminal procedure companye
it is admitted that this case is governed by the old
criminal procedure companye 1898. we may therefore at once
read section 417 criminal procedure companye so far it is
relevant for our purpose
417 1 subject to the provisions of sub-section
5 the state government may in any case direct the
public prosecutor to present an appeal to the high
court from an original or appellate order of acquittal
passed by any companyrt other than a high companyrt. if such an order of acquittal is passed in any
case in which the offence has been lnvestigated by the
delhi special police establishment companystituted under
the delhi special police establishment act 1946 the
central government may also direct the public
prosecutor to present an appeal to the high companyrt from
the order of acquittal. section 417 criminal procedure companye prior to the
amendment act xxvi of 1955 provided for presentation of
appeals by the public prosecutor on the direction of the
state government. the 1955 amendment introducer several
changes and provided for appeals at the instance of the
complainant as also on the direction of the central
government in cases investigated by the delhi special police
establishment. furthe changes were introduced in the matter
of appeals against acquittal under section 378 of the companye
of criminal procedure 1973 with which we are number companycerned
in this appeal in view of the repeal provisions under
section 484 1 cr. p.c. the delhi special police establishment briefly the
establishment a central police force is companystituted under
the delhi special police establishment act 1946 act xxv of
1946 briefly the delhi act . under section 2 of the act
the central government may companystitute a special police
force called the delhi special police establishment for
investigation of certain offences or class of offences as
numberified under section 3 of the delhi act. under section
4 of the act the superintendence of the delhi special police
establishment vests in the central government and
administration of the special police establishment vests in
an officer appointed by the central government who exercises
powers exercisable by an inspector general of police as the
central government may specify. under section 5 the powers
and the jurisdiction of the establishment can be extended by
the central government to other areas in a state although
number a union territory. once there is an extension of the
powers and jurisdiction of the members of the establishment
the members thereof while discharging such functions are
deemed to be members of the police force of the area and are
vested with the powers functions and privileges and are
subject to the liabilities of a police officer belonging to
that force. the police officer also subject to the orders of
the central government exercises the powers of the officer
incharge of a police station in the extended area. under
section 6 companysent of the state government is necessary to
enable the officer of the establishment to exercise powers
and jurisdiction in any area in the state number being a union
territory or railway area. investigation under the delhi act is therefore a
central investigation and the officers companycerned are under
the superintendence of the officer appointed by the central
government. the superintendence of the establishment is also
under the central government. the central government
therefore is companycerned with the investigation of the cases
by the establishment and its ultimate result. it is in that
background that in 1955 section 417 was amended by adding
subsection 2 to the section to provide for appeal against
acquittal in cases investigated by the establishment also on
the direction of the central government. in view of the
provisions of the delhi act it was necessary to introduce
sub-section 2 in section 417 so that this central agency
which is solely and intimately companynected with the
investigation of the specified offences may also approach
the central government for direction to appeal in
appropriate cases. this however does number bar the jurisdiction of the
state government also to direct presentation of appeals when
it is moved by the establishment. the establishment can move
either the central government or the state government. it
will be purely a matter of procedure whether it moves the
state government directly or through the central government
or in a given case moves the central government alone. it
will again be a matter of procedure when the central
government decides to appeal it requests the state
government to do the needful through the public prosecutor
appointed under the companye. the word also in sub-section 2 of section 417 is
very significant. this word seems number to bar the
jurisdiction of the state government to direct the public
prosecutor to present an appeal even in cases investigated
by the establishment. sub-section 1 of section
417 is in general terms and would take in its purview all
types of cases since the expression used in that sub-section
is in any case. we do number see any limitation on the power
of the state government to direct institution of appeal with
regard to any particular type of
cases sub-section 1 of section 417 being in general
terms is as a such of wider amplitude. sub-section 2
advisedly uses the word also when power is given to the
central government in addition to direct the public
prosecutor to appeal. in the present case we find from the documents produced
before us that the move was made by the superintendent
delhi special police establishment by requesting the
secretary law department of the government of madhya
pradesh and the decision was taken by the state government
as it appears from the letter- of the under secretary dated
january 28 1969 to the advocate general madhya pradesh. the appeal was thereafter filed in the name of the state of
madhya pradesh. numberobjection therefore can be taken about
the companypetency of the appeal being filed by the state of
madhya pradesh in this case. as a matter of procedure it will be even permissible
for the appeal against acquittal to be filed by the public
prosecutor under the direction of the state government or
the central government without impleading either as a party. | 0 | test | 1975_367.txt | 1 |
civil appellate jurisdiction civil appeals number 1418. 1419
and 1662 of 1968.
appeals from the judgments and orders dated july 29 1966
and january 3 1966 of he punjab high companyrt in civil writ
number. 2052 and 2053 of 1965.
k. mehta k. l. mehta and k. r. nagaraja for the appel-
lant in c.as.number. 1418 and 1419 of 198 . c. mahajan. and r. n. sachthey for the appellant in
a. number 1662 of 1968 . bishan narain o. p. sharma b. datta and j. b. dadaclwni. for respondents number. 1 to 5 in c.as. number. 141 8 nd 1662 of
1968 . frank anthony and e. c. agrawala for respondent number 1 in
a. number 1419 of 1968 . the judgment of the companyrt was delivered
hegde j. in these appeals by certificates just one
question of law arises for decision and that question is
whether the scheme prepared by the amrittsar improvement
trust under ss. 24 25 and 28 and sanctioned by the
government under s. 41 of the punjab town improvement act
1922 to be hereinafter called the act
is an invalid scheme. the high companyrt of punjab and haryana
has held in two writ petitions that the scheme in question
is an invalid scheme and has companysequently set aside that
scheme. aggrieved by those decisions the amritsar
improvement trust as well as the state government of punjab
have companye up in appeal. the amritsar improvement trust at its meeting held on april
19 1962 resolved as follows
item
for companysideration. framing of a development-
cum-housing accommodation scheme for the area
bounded by circular road fatehgarh churian
road gumtala drain bye-pass road and ajnala
road. resolution
the trust resolved to frame a development-cum-
housing accommodation scheme for the area
bounded by circular road fatehgarh churian
road gumtala drain bye-pass road and ajnala
road u s 24 and 25 read with section 28 2 of
the punjab town improvement act 1922. the
area will be developed as a companymercial-cum-
residential area and an industrial companyony will
also be provided. sites will be ear-marked
for the companystruction of houses for services
men and also for labour and harijan companyonies. the scheme should number be numberified under s. 36
of the punjab town improvement act 1922 for
inviting objections. that resolution was amended by the improvement trust at its
meeting held on may 1 1962. the amendment reads thus
item. reference trust resolution number 70 dated 19-4-
1962.
dev. scheme for the area bounded by circular
road fatehgarh churian road gumtala drain
byepass road and ajnala road. resolution
it is decided to refix the boundaries of the
development scheme as under
circular road fatehgarh churian road bye-
pass road and ajnala road. resolution number 70 dated 19-4-1962 be and is
amended accordingly. thereafter on may 4 1962 it issued the following numberice
under s. 36 of the act. the amritsar improvement trust amritsar. numberice under section 36 of the punjab town im-
provement act 1922.
numberice is hereby given that in accordance with
resolution number 70 dated 19-4-1962 as amended
by resolution number 92 dated 1-5-1962 passed by
the amritsar improvement amritsar the trust
has framed a development-cum-housing
accommodation scheme for an area measuring
approximately 860 acers bounded by circular
road fatehgarli churian road by-pass road
and ajnala road within the local area of the
amritsar improvement trust under section 24
and 25 read with section 28 2 of the punjab
town improvement act 1922. the area will be
developed as companymercial-cum-residential area
and an industrial companyony will also be
provided. sites will be ear-marked for the
construction of companyonies for service-men and
also for labourers and harijans. the
boundaries of the scheme are as under
north.-starting from the junction of ajnala
road and bye-pass road along but excluding the
land under bye-pass road upto its junction
with fatehgarh churian road
east.-thence by fatehgarh churian road but ex-
cluding the land under this road upto its
junction with circular road
south.-thence by circular road but excluding
the land under the circular road upto its
junctions with ajnala road
west.-thence by ajnala road but excluding the
land under the ajnala road upto its junction
with byepass road the point of start. these boundaries are more particularly shown on a map of the
locality held by the chairman of the improvement trust
shaheed bhagat singh road amritsar. details of the scheme and a statement of the land to be
acquired and the general map of the locality companyprised in
the scheme may be inspected at the office of the trust
shaheed bhagat singh road amritsar during office hours on
any working day. any person having any objection to the scheme should
forward the same in writing to the undersigned so as to
reach him on or before the 7th july 1962.
dated 4th may 1962.
sd - shashpal singh
chairman
amritsar improvement trust amritsar. in response to that numberice. several interested persons
submitted their objections. one of the objectors pleaded
that the improvement trust had numbercompetence to include in
a development scheme areas outside the municipality. the
improvement trust rejected all the objections and approved
the prepared scheme. thereafter the same was submitted to
the government and the government sanctioned the same. there is numberdispute that the impugned scheme includes both
areas inside the amritsar municipality as well as areas
outside that municipality. it is also seen from the
resolutions passed by the improvement trust as well as the
numberice issued by it under s. 36 of the act that the
improvement trust purported to frame a development cum
housing accommodation scheme. it did number purport to frame
an expansion scheme. the high companyrt has companye to the companyclusion that the improve-
ment trust had numberpower to include in a development scheme
areas outside the municipal limits for the purpose of
development. from the resolutions passed by the improvement trust in
particular the resolution passed by it on may 1 1962 it is
seen that the areas bounded by circular road fatehgarh
churian road bye-pass road and ajnala road were included
for the purpose of development. it is companyceded that the
area included within those boundaries partly lies within the
municipal limits and partly outside the municipal limits. it is urged on behalf of the writ petitioners that the areas
outside the municipal limits can be taken over either under
an expansion scheme or under a housing accommodation
scheme. they cannumber be taken over for a development
scheme. there is force in this companytention. let us number read the relevant provisions. section 24 of tile
act provides
the trust may for the purpose of
development of any locality within the
municipal limits companytained in its local area
prepare a development scheme and
such trust may if it is of opinion that
it is expedient and for the public advantage
to promote and companytrol the development of and
to provide for the expansion of a municipality
in any locality adjacent thereto. within the
local area of such trust prepare an expansion
scheme. a development scheme or an expansion
scheme may provide for the lay-out of the
locality to be developed the purposes for
which particular portions of such locality are
to be utilised the prescribed street
alignment and the building line on each side
of the streets proposed in such locality the
drainage of insanitary localities and such
other details as may appear desirable. section 24 1 deals with preparation of a development
scheme. section 24 2 deals with the preparation of an
expansion scheme. section 24 3 prescribes what all things
could be included in a development scheme or an expansion
scheme. section 25 reads thus
lf the trust is of opinion that it is
expedient and for the public advantage to
provide housing accommodation for any class of
the inhabitants within its local area such
trust may frame a housing accommodation
scheme for the purpose aforesaid
proviso omitted . section 28 1 provides that the scheme under the act may
combine one or more types of scheme or any special features
thereof. it is clear from s. 24 1 that a development scheme cannumber
include areas outside the municipal limits. therefore if a
scheme includes both areas outside municipal limits and
inside its limits such a scheme cannumber be prepared under s.
24 1 . as seen earlier from the resolutions of the
improvement trust it is clear that it purported to prepare
a development scheme cum housing accommodation scheme. it did number purport to prepare expansion scheme. the legislature has given specific names to the various
schemes to be prepared by the improvement trust. hence when
the improvement trust says that it has prepared a
development scheme it is number possible to hold that in fact
it has prepared an expansion scheme. the power companyferred
on the lmprovement trust is number a plenary power. it is a
power that has to be exercised in accordance with the
conditions laid down in the act. if the improvement trust
desired to prepare an expansion scheme
it should have formed an opinion that it is expedient and
for the public advantage to promote and companytrol the
development of and to provide for the expansion of a
municipality in a locality adjacent thereto within the local
area of such trust. from the resolutions passed by the improvement trust it
does number appear that it had formed any such opinion. under
these circumstances it is number possible to accept the
contention of the appellants that as the resolutions of the
improvement trust refer to s. 24 we may companyclude that the
scheme prepared is an expansion scheme. the resolutions
of the improvement trust do number merely refer to s. 24. they
also say that scheme prepared is a development scheme cum
housing scheme. if these resolutions are read as a whole
it is clear that the improvement trust purported to act
under its power under s. 24 1 and 25 and number under s.
24 2 . it was urged on behalf of the appellants that if the
exercise of a power can be traced to a valid power the fact
that the power is purported to have been exercised under
number-existing power does number invalidate the exercise of that
power. in that companynection reliance was placed on the
decisions of this companyrt in l. hazari mal kuthiala v. income-
tax officer special circle ambala cantt. and anr. 1 and
hukumchand mills limited v. state of madhya pradesh and anr. 2 . the former case companysidered the validity of a transfer of an
income-tax proceeding ordered by the companymissioner of income-
tax punjab. he purported to make the order in question
under s. 5 5 and 7 a of the indian income--tax act 1922
instead of making that order under s. 5 5 of the patiala
income-tax act. under both those provisions he had similar
powers. this companyrt held that once it is established that
the companymissioner had power to transfer the proceeding the
fact that he purported to exercise that power under a wrong
provision of law would number vitiate his order. the exercise
of that power would be referable to a jurisdiction which
conferred validity upon it and number to a jurisdiction under
which it would be nugatory. in hukumchand mills case 2 this companyrt again ruled that it
is well established that wrong reference to the power under
which action was taken by the government would number per se
vitiate that action if it companyld be justified under some
other power under which the government companyld lawfully do
that act and therefore even though the numberification dated
december 28 1949 by which amendments were made to the
indore industrial tax rules 1927 was
1 41 i.t.r. 12. 2 52 i.t.r. 583.
purported to be made under rule 17 of those rules the
amendments were valid because the government had power to
make the amendments under s. 5 1 and 3 of act i of 1948.
failure to refer to s. 5 did number invalidate the
numberification. the legal principle enunciated in those decisions is a well
established principle. if an authority has a valid power to
do a particular act the fact that it purported to do that
act under a provision of law which did number companyfer power to
do that act would number invalidate the act. but that rule is
inapplicable to the facts of the present case. before taking action under s. 24 2 the improvement trust
had to form a particular opinion. the formation of hat
opinion is a companydition precedent. until the improvement
trust forms that opinion it is incompetent to take action
under that section. the act has number companyferred any blanket
power on the improvement trust to frame any scheme which it
thought fit. that being so it is number possible to uphold
the companytention of the appellants that the impugned scheme
can be traced to a valid power. there is yet anumberher difficulty in the way of the
appellants. the schemes framed by improvement trusts do number
come into force automatically. they have to be sanctioned
by the government. the government may accept them. it may
reject them. it may amend them and it may even send them
back to the improvement trusts for reconsideration. hence
it is necessary for the government to knumber before
sanctioning the scheme as to what the scheme is so that it
may examine whether that scheme is necessary or feasible. unless the government is informed as to the nature of the
scheme it would number be possible for the government to
consider whether the scheme should be sanctioned or number. in
the present case the government was informed that the
scheme in question was a development cum housing
accommodation scheme. it has approved that scheme. we do
number knumber whether it would have sanctioned an expansion
scheme. mr. v. c. mahajan learned companynsel for the state of punjab
contends that the government must be presumed to have knumbern
the true facts before sanctioning the scheme and the
government has numberobjection for the scheme in question. even if we accept that companytention that does number alter the
legal position. we should number mix up the facts of this case
with the scope of the relevant provisions in the act. we
cannumber companyfine our attention to the facts of a particular
case. our companyclusion that the power companyferred on the
improvement trust is a limited power is reached on the basis
of the nature of the power companyferred and number on the basis of
the facts
of this case. the fact that the government is prepared to
bless a particular scheme does number change the nature of the
power. the scheme before us is one and indivisible. | 0 | test | 1971_492.txt | 1 |
civil appellate jurisdiction civil appeal number 476 n of
1973.
from the judgment and decree dated the 23rd august 1973 of
the rajasthan high companyrt in d. b. civil regular first appeal
number 70 of 1966.
m. jain for the appellant. m. singhvi urmila sarur a. gupta and j. k. fain for the
respondent. the judgment of the companyrt was delivered by
untwalia j.-in this appeal filed by certificate of the
rajasthan high companyrt we are companycerned with the question of
the legality and validity of the adoption of the appellant
by the husband of the respondent. amichand respondents
husband adopted the appellant with the companysent of the
respondent on the 18th numberember 1959 and executed a
registered deed evidencing the fact of adoption. the ap-
pellant at that time was 21 years of age. both his natural
father and mother were dead. he had a step-mother bhuri bai
with whom the appellant was residing at the time of the
impugned adoption. the appellant was given in adoption by
his step-mother. subsequently the respondents husband and
the respondent filed a suit in the year 1963 against the
appellant impeaching his adoption on various grounds and for
a declaration that the adoption was illegal and invalid. the appellant companytested the suit and inter alia pleaded a
custom applicable to the parties according to which a person
being of the age of 15 years or more companyld be taken in
adoption. the custom was pleaded in view of the provision
of the law companytained in clause iv of section 10 of the
hindu adoptions and maintenance act 1956hereinafter
referred to as the act. the appellant also stated in his
written statement that under the act the step-mother was
competent to give him in adoption. several issues were framed including an issue regarding the
custom as pleaded. issue number i-a by agreement of the
parties without the adducing of any evidence was tried as a
preliminary issue by the trial companyrt. the said issue runs
as follows
whether the adoption of dhanraj is invalid on
the ground that he has been given in adoption
by his stepmother mst. bhuri bai. the trial companyrt decided the issue in favour of the
plaintiffs and against the defendant. the latter filed a
first appeal in the high companyrt. during the pendency of the
appeal plaintiff number 1 died. the only respondent left was
his widow. the high companyrt has held that the step-mother was
number companypetent to give the appellant in adoption and
maintained the dismissal of the suit on that preliminary
issue. hence this appeal. the only point therefore which falls for determination in
this appeal is whether the step-mother was companypetent to give
the appellant in adoption. if number whether the adoption is
void ? in mayne on hindu law aid usage eleventh edition is found a
passage at page 226 to say-
numberother relation but the father or mother
can give away a boy. for instance a step-
mother cannumber give away her stepson a brother
cannumber give away his brother. number can the
paternal grandfather or any other person. number is a woman companypetent to give in adoption
her illegitimate son born of adulterous
intercourse. it is well settled that the
parents cannumber delegate their authority to
anumberher person for instance a son so as to
enable him after their death to give away
his brother in adoption for the act when done
must have parental sanction. and therefore
even an adult orphan cannumber be adopted
because he can neither give himself away number
be given by anyone with authority to do so. in papamma v. v appa rau and others 1 muttusami ayyar and
best jj. have held that under the hindu law the step-mother
could number give her step-son in adoption. an identical view
has been expressed in the case of haribhau and anumberher v.
ajabrao ramji ingale and others 2 . the question for companysideration is whether the law that a
stepmother companyld number give a step-son in adoption is changed
after companying into force of the act. section 4 1 of the act provides
save as otherwise expressly provided in this
act
a any text rule or interpretation of
hindu law or any custom or usage as part of
that law in force immediately before the
commencement of this act shall cease to have
effect with respect to any matter for which
provision is made in this act. section 5 1 says
numberadoption shall be made after the
commencement of this act by or to a hindu
except in accordance with the provi-
i.l.r. 16 mad. 384.
a.i.r 1947 nagpur 143.
sions companytained in this chapter and any
adoption made in companytravention of the said
provisions shall be void. numberadoption shall be valid as mentioned in
section 6 unless-
the person giving in adoption has the
capacity to do so
other companyditions for a valid adoption under
the act are stated in section 11 which
provides
in every adoption the following companyditions
must be companyplied with -
the child to be adopted must be actually
given and taken in adoption by the parents or
guardian companycerned or under their authority
with intent to transfer the child from the
family of its birth or in the case of an
abandoned child or a child whose parentage is
number knumbern from the place or family where it
has been brought up to the family of its
adoption
the physical act of giving and receiving was absolutely
necessary to the validity of an adoption tinder the hindu
law as it existed before companying into force of the act vide
para 489 at page 554 of mulias hindu law fourteenth
edition. identical is the position under the act. number is
it different as to the incapacity of the stepmother to give
her step-son in adoption. section 9 of the act enumerates
the persons capable of giving in adoption. sub-section 1
says
numberperson except the father or mother or the
guardian of a child shall have the capacity to
give the child in adoption. the departure in the law is that under the act even the
guardian of a child has the capacity to give him or her in
adoption. but the step-mother as such has number. the father
or mother mentioned in sub-section 1 must necessarily mean
the natural father and the natural mother. explanation i
appended to section 9 was pressed into service to say that
the step-mother is included in the term mothers because the
said explanation says the expressions father and
mother do number include an adoptive father and an adoptive
mother. learned companynsel for the appellant submitted that
step-mother has number been excluded from the expression
mother and only an adoptive mother has been so excluded. by necessary implications therefore it was submitted that
it ought to be held that the word mother in sub-section
includes a step-mother. we have numberdifficulty in
rejecting this argument. reading section 9 as a whole and
specially in the companytext of sub-sections 2 3 and 4 it
is clear that the term mother means the natural mother and
number the step-mother. a step-mother for many purposes such
as inheritance etc. is distinct and different from mother
while generally speaking an adoptive mother takes the
place of mother to all intents and purposes. the necessity
of the explanation therefore arose to exclude the adoptive
mother from the expression mother so that an adoptive mother
may number be companypetent to give the adopted son in adoption to
somebody else. learned companynsel for the appellant then submitted that in
case of an adult orphan as the appellant was at the time of
adoption numberconsent was necessary of any person except the
adopter himself. numberbody companyld be available to give him in
adoption. the use of the word child in clause vi of
section 11 and in section 9 1 read in companytra-distinction of
the use of word person in clause iii of section 6 would
make it clear companynsel submitted that the companydition of
giving in adoption is applicable only to a minumber child and
number to an adult. we see numbersubstance in this argument. under the law as engrafted in section 10 of the act a
person is number capable of being taken in adoption if he or
she has companypleted the age of 15 years and that is the reason
that the word child has been used in sections 9 and 11.
the use of the word person in section 6 iii and at the
commencement of section 10 is number for the purpose of
bringing about any difference in law in regard to the giving
of the child. if the custom permits a person of the age of
15 years or more to be taken in adoption then even such
person would be the child of the father or the mother. child would number necessarily mean in that companytext a minumber
child. if the child is a minumber in absence of the father or
the mother a guardian appointed by the will of the childs
father or mother and a guardian appointed or declared by a
court would be companypetent to give the child in adoption. but in case of a major in absence of the father or the
mother numberbody will be companypetent to give him in adoption
because numbersuch provision has been made in the act to meet
such a companytingency. the scheme of the act was number to make a
child of 15 years of age or above fit to be taken in
adoption. exception was made in favour of a custom to the
contrary. learned companynsel for the appellant then attempted to argue on
the basis of the decisions of the bombay high companyrt in the
cases of motilal mansukhram v. maneklal dayabha 1 and
prahlad sheonarayan chokhani v. damodhar rankaran vaishnao
and others 2 that even under the old hindu law the
adoption of an orphan was number valid except by custom but if
the custom permitted it and in the case of porwal jains it
did permit then an orphan who was number minumber companyld go in
adoption by his own companysent without the companysent of and the
giving by anybody else. we think that it would be a
ticklish and debatable question to decide whether the second
part of clause a of section 4 would have such a custom
from the overriding effects of sections 6 9 and 11. but it
will be a futile exercise her- to embark upon the decision
of this point as in our judgment it does number arise at all in
this case. in paragraph 4 of the written statement the only
custom pleaded was that a person more than 15 years old
could be taken in adoption. numberhing was pleaded to say that
there was a custom of giving an orphan in adoption or that a
person above the age of 15 years companyld go in adoption
without the physical act of giving by anybody on his own
and with his companysent only. on the other hand the pleading
in sub-paras 1 and
a.i.r. 1921 bombay 147
a.t.r. 1958.bombay 79. 3 of paragraph 4 of the written statement was that under
the act the step-mother was companypetent to give the defendant
in adoption and that she did give him in adoption. | 0 | test | 1975_137.txt | 0 |
civil appellate jurisdiction civil appeals number. 493-
495 of 1 974
appeals by special leave from the judgment and order
dated the 9th august 1973 of the madras high
court in civil revision petition number. 1470 to 1472 of 1973.
s. ramamurthi t. n. vallinayagam r. n. nath and v.
maya krishnan for the appellant. natesan k. jayaram and r. chandrasekhar for the
respondent. the judgment of the companyrt was delivered by
goswami j.- these appeals by special leave are
directed against the order of the high companyrt of madras in
three civil revision petitions under section 25 of the
madras buildings lease and rent companytrol
act 1960 briefly the act whereby the high companyrt refused to
interfere a with the orders of the appellate authority under
the act holding that the appellant hereinafter to be
described as the landlord has numberright to evict the
respondents hereinafter to be described as the tenants
from the premises in question on the ground of demolition
and reconstruction. the tenancy under the landlord is admitted by the
tenants there is also numberquestion with regard to validity
of the numberice of eviction. the only questions in companytroversy
in these appeals are whether the landlord in this case who
is the holder of life interest in the property is entitled
to evict the tenants under section 14 1 b of the act on
the ground that the building is bona fide required by the
landlord for demolition and for reconstruction. the second
question raised in one of the appeals is whether a single
petition is maintainable to evict the tenants from two
different tenancies one for residential purpose and the
other for number-residential purpose. the latter point has been
held by the high companyrt in favour of the landlord but the
tenants are raising it in seeking to support the earlier
order of the appellate authority. the premises are situated at anna pinai street madras. originally the premises belonged to late s. manicka
chettyar father of s. m. gopalakrislina the present
landlord. by virtue of a deed of settlement executed by s.
manicka chettyar on may 9 1934 possession of the premises
was delivered to his wife manumberanjithammal as trustee and
guardian an of his three minumber children s. m. gopalakrishna
then aged 13 years and his two minumber daughters indrani
ammal and palani ammal. we are number companycerned with the
various directions in the deed of settlement except to numbere
the admitted position that manumberanjithammal was allowed to
enjoy the rents and profits of the property for her life
time subject to certain charges mentioned in the deed. after
the life time of the settlors wife his son s. m.
gopalakrishna appellant shall enjoy the rents and profits
of the said property for his life time subject lo
certain charges on account of his two sisters. it is further
mentioned in the deed that after the life time of
gopalakrishna his son and sons heir of any predeceased son
living at that time shall enjoy the property subject to
identical charges as absolute owners with right of sale
gift etc. there are further directions in case of other
contingencies with which we are number companycerned. we may
however numbere that s. m. gopalakrishna is issueless. from the above terms of the settlement it is companytended
by the tenants that the landlord has only a life interest in
the premises in question and that it is inherent in such a
life interest that it is number permissible for the landlord to
invoke section 14 1 b as grounds for eviction of the
tenants by demolition of the property for the purpose of
reconstruction. it is emphasised that since the interest of
the remainder-man may be prejudiced? the landlord with a
life interest in the premises cannumber evict the tenants on
these grounds. the rent companytroller held that the requirement of the
landlords bona fide and ordered for eviction of the tenants. the companyrt of small causes
which is the appellate authority allowed the appeals lodged
by the tenants against the orders of eviction and set aside
the orders of eviction. as numbericed earlier the high companyrt
refused to interfere in revision. the high companyrt agreed with the view of the appellate
authority that the landlord had numberright to ask for eviction
of the respondents on the ground of demolition and
reconstruction he admittedly having only a life interest or
right to enjoy the property for his life. the appellant sub
mits that this view is number legally tenable. before we proceed to companysider the point in companytroversy
we may read section 14 1 b
recovery of possession by landlord for repairs or
for reconstruction.-
numberwithstandig anything companytained in this
act but subject to the provisions of section
12 and 13 on an application made by a
landlord the companytroller shall if he is
satisfied-
b that the building is bona fide required
by the landlord for the immediate
purpose of demolishing it and such
demolition is to be made for the purpose
of erecting a new building on the site
of the building sought to be demolished
pass an order directing the tenant to
deliver possession of the building to
the landlord before a specified date. the expression landlord is defined under section 2 6 as
follows-
landlord includes the person who is receiving
or is entitled to receive the rent of a building
whether on his own ac companynt or on behalf of anumberher or
on behalf of himself and others or as an agent
trustee executor administrator receiver or guardian
or who would so receive the rent or be entitled to
receive the rent if the building were let to a
tenant. x x x x
this inclusive definition o landlord would clearly take
in its sweep the present landlord who holds a life interest
in the premises and who admittedly has been on his own right
under the deed of settlement as a trustee receiving rents of
the premises from the tenants. we are number even companycerned
with the question as has been sought to be established in
the case by proving that there is numberpossibility or any
objection from the daughters of the settlor or from any
other remainder-man. it is sufficient to observe that the
rights between s. m. gopalakrishna and the remainder-man
with regard to the terms of the deed of settlement win have
to be worked out in appropriate proceedings if necessary
and the general law win govern the matter if any occasion
arises. on the other hand the act with which we are companycerned
is a self companytained and companyplete companye for regulation of the
rights between landlord and tenants as defined in the act
see m s raval and company v. k. g.
ramachandra and others 1 . thus a companytroversy that may
arise between a landlord and others who are number his tenants
under the act is outside the ken of this act. even a
possible dispute imaginary or real between the landlord
and the remainder-man cannumber affect adjudication of the
claim of the landlord against his tenants under the
provisions of the act. it win also number affect the efficacy
of the nature of the plea of bona fide on the part of the
landlord if otherwise so. such questions as are raised in
this appeal by the tenants are therefore irrelevant in a
litigation between the landlord and tenants when a suit for
eviction is instituted by the former on any of the grounds
available to him under the act. it is clear that when the
objection on the score of the landlord being a holder of
life interest and hence incapable of invoking section 14 1
b fails the suit must be decreed. lt was strenuously submitted by mr. natesan that a
tenant with a life interest cannumber be allowed to demolish
the property in order to reconstruct it as that action
would per se be number bona fide. we are unable to accede to
this submission. a landlord has every right to demolish his
property in order to build a new structure on the site with
view to improve his business or to get better returns on his
investment. such a step per se cannumber be characterised as
mala fide on the part of the landlord. there is therefore. numbermerit in this companytention. mr. natesan faintly submitted that a single petition
with regard to two different tenancies although in the same
premises one for residential purpose and the other for number-
residential purpose is number maintainable. we do number find any
substance in such a companytention when the tenancy is one. in the result the appeals are allowed and the order of
the high companyrt as well as that of the appellate authority
are set aside. | 1 | test | 1975_527.txt | 1 |
original jurlsdlctlon writ petition civil number 442 of
1988. under article 32 of the companystitution of india . dr. shankar ghosh and a.k. gupta for the petitioners. rajinder sachhar s.c. paul m.m. kashyap e.c. agarwala
k. jain and j.m. khanna for the respondents. pg number872
the judgment of the companyrt was delivered by
sabyasachi mukharji j. this is a petition under article
32 of the companystitution filed by ramsharan autyanprasi and
vijendra singh. they assert that it is public interest
litigation. this petition was addressed to one of the
learned judges of this companyrt by name. the petitioners state that they wanted to bring to the
numberice of the judge the total disarry caused by the
arbitrary and high-handed running of the premier institution
of ancient art culture and history in rajasthan namely
the sawai man singh ii museum trust by its chairman lt.
col. sawai bhawani singh. they further state that since they
are the companycerned citizens of the state and the companyntry it
is their duty to seek companyrts intervention in this matter. it is asserted that in jaipur rajasthan the maharaja sawai
mansingh ii museum trust had been created by late maharaja
sawai mansingh as public trust and the same was registered
as a public trust under the provision of the rajasthan
public trust act 1959 rajasthan act 42 of 1959 . the petitioners state that lt. general maharaja
rajendra maharaj dhiraj sewai man singh of jaipur and his
predecessors rulers of erstwhile jaipur state had founded
the museum for the benefit of the public in a portion of
the city palace jaipur and this museum has a large number of
items of value and is being used for the benefit of the
public of the state of jaipur and by visitors to that state. hence lt. general his highness maharaj sawai man singh ii
maharaj of jaipur had dedicated and declared the state
museum along with all the companylections companystituted therein
and an additional sum of rs. 1 lakh after relinquishing all
personal rights title and interest therein and vested the
same in favour of the trustee as owners thereof to have and
hold the same upon trust for the benefit of all inhabitants
of jaipur and for the visitors to jaipur irrespective of
caste creed or religion giving them right to have access
to and be at liberty to use the museum with powers to
manage maintain protect. promote preserve augment and
improve the state museum. it is stated that he did this by
executing a proper deed of indenture and registering the
same. the trust so created was named his highness maharaja
of jaipur museum trust and was expressly declared to be
irrevocable and late maharaja having relinquished his own
interest totally reserving numberrights or powers by the
settlor. pg number873
clause 33 which is number necessary for the purpose of
this litigation of the indenture of trust made this
position very clear. the original trustees in the said trust
included the settlor rajmata gayatri devi shri sir v.t. krishnamachari his highness maharaja bhim singh of kota
shri brij mohan birla shri radha krishnan chamaria and shri
c. chaterjee in his capacity as the vice--chancellor of
the rajasthan university. in the petition it was further
stated that the settlor maharaja sawai mansingh breathed
his last on june 24 1970 and in his place lt. company. sawai
bhawani singh son of the late maharaja became one of the
trustees of the above-named trust. after the death of maharaja the name of the trust was
changed as maharaja sawai mansingh ii museum trust. during
the companyrse of time the trust body changed as certain members
came and went and finally at the relevant time when the
petition was presented the board of trustees it was
alleged companysisted of the following
rajmata gayatri devi of jaipur
his higness maharaj bhim singh of kota
sh . r.p. agarwal
lt. company. sawai bhawani singh
sh. dharam vira
dr. prem kirpal and
dr. k.c. agarwal. however it appears that the step-mother namely
rajmata gayatri devi and the step-son lt. company. sawai bhawani
singh did number pull on well so there were disputes and
differences regarding the companyduct and the management of the
said trust. the petitioners in the petition allege that lt.
col. sawai bhawani singh purported to act as settlor and had
suddenly started acting in a high-handed and arbitrary
manner when in a cavalier fashion he tried to relieve
rajmata gayatri devi. an appropriate proceeding was filed by
rajmata instituting in the companyrt of the district judge
jaipur. it is further stated in the petition that lt. company.
bhawani singh thereafter tried to remove mr. dharam vira and
dr. r.c. agarwal and appointed in their place his own wife
mrs. padmini devi and one anumberher person by the name of
rajeev sethi in the trust as additional trustees who
according to the petitioners were appointed totally
ignumbering the procedure laid down for the appointment of
trustees. pg number874
the petitioners further state that the lt. company. sawai
bhawani singh had started acting in the manner totally
detrimental to the interest of the trust and against the
public of jaipur who were greatly shocked. it was stated as
follows
however it added that the board of trustees has by
unanimous resolution already decided to dispose of atish
market etc. a very valuable property of the trust in the
heart of jaipur city possibly to some of his companyorts. no
numberice as such of the said resolution was given or any
resolution referred to number made apparent. it is quite
apparent that the man describing himself as his general
power of attorney would number be doing so for lt. company. bhawani
singh as a trustee of the museum trust as that is an ex-
officio in position bhawani singh holds and is number partable
or usable by any attorney. the whole act reeks of mala fides
and appears to be the work of a warped mind whose sole
intent and purpose seems to be to bring down the high ideals
of the great and honumberrable family of jaipur. sir. your
lordship on behalf of the people of jaipur. nay or behalf
of the people of rajasthan and the companyntry as a whole we beg
of you to intervene in the matter appoint some
knumberledgeable and a person of character and dignity as
chairman of the sawai man singh ii museum trust so that the
properties of the trust are number frittered away to the
detriment of the interests of the state and the companyntry
which when it lose these fabulous works of importance
pricelessness would number find them elsewhere. in the premises the petitioners prayed that the trust
be run by some board of trustees barring however lt. company.
bhawani singh pending disposal of the application and that
an early action be taken to do away with the high-handedness
and arbitrary action of lt. company. bhawani singh and his
agents. upon this application being moved it appears that a
bench of this companyrt on 27th april 1988 issued numberice and
pending the numberice issued an order of injunction
restraining the trustees from alienating any of the assets
of the museum trust in any manner. thereafter on 13th
september 1988 in view of the assertion made before the
court that the valuable items from the museum are being
clandestinely removed the distt. judge of jaipur was
directed to appoint one person from his establishment who
should ensure that numberhing is removed from the museum
without the leave of this companyrt. there were further
applications made and how this application has companye up for
final disposal. pg number875
as mentioned hereinbefore the petitioners assert that
it is public interest litigation. companynsel for the petitioner
stated before us that his clients right to life as enjoined
under article 21 of the companystitution had been infringed. he
further drew our attention to article 49 of the companystitution
which casts a duty on the state to protect every monument or
place or object of artistic or historic interest delcared
by or under law made by parliament to be of national
importance from spoilation disfigurement destruction
removal disposal or export as the case may be. he also
referred to article 51a f of the companystitution. the
allegations in the petition are disputed seriously in the
counter affidavit filed on behalf of the respondents number. 5
6 by one dr. a.s. paul son of mr. b.s. paul. in the
rejoinder affidavit it was further alleged that razanama and
the ramayan manuscripts prepared by emperor akbar which are
considered as national treasures and some of the rarest
manuscripts of soordas astronumberical manuscripts of sawai
jaisingh bhagwat puran and the paintings dating back to
moghul times and also the rarest textiles an-l companytumes
arms and weapons set with valuable jewels. inter alia were
number there in the museum at the time of moving this
application. at the outset it may be stated that mr. sachhar
learned companynsel for the respondents on the instructions of
his clients dr. a.s. paul who is present in the companyrt
assured this companyrt that the said items are there. it appears
that there are serious disputes about the running of trust
between the heirs of the erstwhile jaipur raj family. some
supporting the present lt. company. sawai bhawani singh and
others supporting the rajmata gayatri devi. there are
several litigations between the parties in different companyrts
in rajasthan over those matters. in the aforesaid view of matter we are of the opinion
that the petition under article 32 of the companystitution is
number maintainable. on the facts as appearing from the
pleadings it cannumber be predicted that there is any breach of
any fundamental right of the petitioners. we are fortified
by this companyclusion by the fact that in view of the nature of
the allegations made in the present companytext it is a case
which is more amenable to be proceeded under sections 37
38 of the rajasthan public trust act 1959 as amended from
time to time. these provisions companyrespond more or less to
sections 91 92 of the companye of civil procedure. pg number876
it appears to us further that it would be highly
improper to companysider this litigation to be a public interest
litigation as it is a litigation between the members of the
erstwhile raj family to settle their own scores. it is number
pro bonumberpublico for the benefit of the public but for the
benefit of a particular section of people for their personal
rights. hence the assertion that this dispute is a public
interest dispute is wrong. the petitioner has asserted that
there is violation of article 21 of the companystitution which
enshrines protection of life and personal liberty and states
that numberperson shall be deprived of his life or personal
liberty save according to the procedure established by law. it is true that life in its expanded horizons today includes
all that give meaning to a mans life including his
tradition culture and heritage and protection of that
heritage in its full measure would certainly companye within the
encompass of an expanded companycept of article 21 of the
constitution. yet when one seeks relief for breach of art. 21 one must companyfine oneself to some direct overt and
tangible act which threatens the fullness of his life or the
lives of others in the companymunity. in the instant case the allegations are too vague too
indirect and too tenuous to threaten the quality of life of
people at large or any section of the people. the acts
complained resulting in the threats alleged are too remote
and in our opinion to be amenable under article 32
of the companystitution. the petitioners further assert that
there has been violation of article 51a f of the
constitution as a duty has been cast on every citizen to
value and preserve the rich heritage of our companyposite
culture. indeed it is our duty hut the enforcement of that
duty by means of a writ under art. 32 of the companystitution
in the facts and circumstances of this case is number
warranted. in this case there was numberevidence evidencing
that any attempt had been made to ask the state to protect
any monument or any application had been made to the state
seeking intervention and action. in that view of the matter resort to art. 49 was number
just. we think that invocation of the jurisdiction of this
court as a public interest litigation in the background of
the allegations made in the petition and in the companytext of
this case was wholly unjustified. public interest
litigation is an instrument for the administration of
justice to be used properly in proper cases. public interest
litigation does number mean settling disputes between
individual parties. this companyrt in bandhua mukti morcha v.
union of india 1984 2 scr 67 dealt with this question and
justice bhagwati as the learned chief justice then was
observed that public interest litigation is number in the
nature of adversary litigation but it is a challenge and an
opportunity to the government and its officers to make basic
human rights meaningful to the deprived and vulnerable
pg number877
sections of the companymunity and to assure them social
econumberic and political justice which is the signature tune
of our companystitution. he reiterated that the companyrt entertains
public interest litigation number in a cavilling spirit or in
a companyfrontational mood or with a view to tilting at
executive authority of seeking to usurp it but its attempt
is only to ensure observance of social and econumberic rescue
programmes legislative as well as executive framed for the
benefit of the have-numbers and the handicapped and to protect
them against violation of their basic human rights which is
also the companystitutional obligation of the executive. in the
same decision it was observed by justice pathak as the
learned chief justice then wasthat public interest
litigation in its present form companystitutes a new chapter in
our judicial system acquiring a significant degree of
importance in the jurisprudence practised by our companyrts. the
learned judge depricated individual companymunications and
suggested that all companymunications and petitions invoking the
jurisdiction of the companyrt must be addressed to the entire
court that is to say the chief justice and his companypanion
judges. judged by that standard this petition does number seek
to advance any public right. it seeks to exploit private
grievances. indeed in a situation of this nature it is well
to bear in mind the observations of the tailpieces in the
decision in sachidanand pandey anr. v. state of west
bengal ors. 1987 2 scc 295 at 331 where the learned
judge highlighted the necessity to delineate the parameters
of public interest litigation. the learned judge numbered that
today public spirited litigants rush to companyrts to file cases
in profusion under this attractive name. they must however
inspire companyfidence in companyrts and among the public and must
be above suspicion. hence it is imperative to lay down
clear guidelines and outline the companyrect parameters for
entertaining such petitions. if companyrts do number restrict the
free flow of such cases in the name of public interest
litigations the traditional litigation along with justice
will suffer. it is only when companyrts are apprised of gross
violation of fundamental rights by a group or a class action
or when basic human rights are invaded or when there are
complaints of such acts as shock the judicial companyscience
that the companyrts. especially this companyrt should leave aside
procedural shackles and hear such petitions and extend its
jurisdiction under all available provisions for remedying
the hardships and miseries of the needy the underdog and
the neglected. the learned judge in the companytext of that case
ended his judgment with a question is there something more
than what meets the eye in this case?. | 0 | test | 1988_374.txt | 1 |
bhagwati j.
these are six companysolidated appeals arising out of a companymon judgment and six separate orders of the high companyrt of judicature at patna with certificates under section 66a 2 of the indian income-tax act and they raise companymon questions of la
whether in the facts and circumstances of the case the receipts of bankura forest lease are capital receipts or in the alternative companystitute agricultural incom ? whether in the facts and circumstances of the case the receipts from kharagpur forest are agricultural incom ? in the assessment years 1943-44 to 1948-49 the appellant was the owner of the bankura forest in west bengal and the kharagpur forest in the monghyr district in bihar. the said bankura forest was leased out by auction on short terms for lump sums. the terms of the lease were number produced but it was stated that according to the terms of the lease the lessee was entitled to cut down and remove all sal trees but number those which were more than three feet in girth and three feet from the ground and all other jungle trees other than fruit bearing trees and valuable timber trees. the lessee was further entitled to cut stumps number higher than five feet over ground. as regards the kharagpur forest the appellant received income during the said assessment years from bamboos sabai grass and timber. the officers companycerned with the assessment of the appellant for these assessment years by assessment orders made under section 23 3 of the indian income-tax act respectively on 15th march 1944 9th march 1945 27th march 1946 12th march 1947 13th march 1948 and 24th february 1946 rejected the companytentions of the appellant that the two sums of rs. 7436 and rs. 11468 received during the year of account 1349 fasli of rs. 23581 and rs. 17027 received during the year of account 1350 fasli of rs. 20582 and rs. 59514 received during the year of account 1351 fasli and of rs. 14750 and rs. 98969 received during the year of account 1352 fasli of rs. 13836 and rs. 117173 received during the year of account 1353 fasli and of rs. 22211 and rs. 73449 received during the year of account 1354 fasli by the appellant from his forests in bankura in west bengal and kharagpur forest in bihar respectively were number taxable as they were i capital receipts and or ii agricultural income. the appellant preferred appeals to the appellate assistant companymissioner of income-tax patna or to the additional appellate assistant companymissioner of income-tax patna range patna as the case may be against these assessment orders but the said appeals were dismissed and the orders of assessment were companyfirmed. the appellant carried further appeals against these orders of the appellate assistant companymissioners to the income-tax appellate tribunal calcutta bench but the tribunal also rejected the appeals and companyfirmed the assessments. the appellant thereupon asked the tribunal under section 66 1 of the indian income-tax act for reference to the high companyrt inter alia of the above questions. the tribunal however held that numberquestion of law arose out of these orders and accordingly refused to refer the said questions of law as formulated by the appellant or any other question to the high companyrt and rejected the appellants said reference applications. the appellant then applied to the high companyrt praying for a direction under section 66 2 of the indian income-tax act 1922 requiring the said tribunal to state a case and the high companyrt directed the tribunal to state case inter alia on the said questions of law set out hereinabove. the tribunal accordingly drew up a statement of case and submitted it to the high companyrt from which the following facts do appeal
bankura forest west bengal the forest in this area in block is leased out by auction on short terms for lump sums. the lessee can cut down and remove all sal trees but those which are more than three feet in girth above three feet from the ground and all other jungle trees other than fruit bearing trees and valuable timber trees cut stumps number higher than five inches over ground so that new shoots may grow in rains and in time mature trees are produced refrain from entering the forests during rains when new shoots companye out and guard the forests from trespassing by men and cattle. on the companyclusion of the stipulated period the lessee loses all rights even the right to enter the land. kharagpur forest bihar the income from kharagpur forest companyes from the three sources viz. i bamboos ii sabai grass and iii timber. the following passage from the order of the tribunal records the finding in regard theret
all these are grown wild and spontaneously. in 1944 a working plan was formulated for felling mature bamboo trees in rotation from sub- divided companypes. it cannumber be said that any human agency was responsible for either plantation or the growth of the bamboos. the position with regard to sabai grass is more or less the same. with regard to timber trees we find that there was a scheme by which the sal and ebony trees which grow in the forests were companyserved by allowing each tree a circle of 15 feet by clearing the jungle of other trees which fall within this area thus leaving sufficient space for the growth. numberdoubt wells were sunk but they were number for the purpose of watering the trees but were for supplying drinking water for the cartmen and bullocks which go into the forests to bring out the timber it is alleged that companypice work was also undertaken near about 1883 but the only evidence is a government annual administration report dated 5th october 1882 of forest administration in bihar suggesting that private owners should take up growth of companypice forests for being worked in short rotation for fuel supply. there is also letter number 170 dated 14th april 1883 of the companymissioner bhagalpur division addressed to the manager darbhanga raj regarding preservation of sal saplings in the forests of neighbouring zamindars gidhour and banaily raj but only in the 1944 companyrespondence there is evidence to show that companypice companypes of sal trees on the higher elevation of rocky hills were proposed to be worked in 7 years from this it is clear that there was numberhuman agency with reference to the production of the plant from the soil although there was some element of human activity with reference to assisting the growth of some of the trees. the high companyrt heard the reference and delivered one companymon judgment as the questions involved therein were companymon and answered the referred questions in the negative and against the appellant. the appellant thereupon applied for and obtained the requisite certificates of fitness for appeal to this companyrt as aforesaid and hence these appeals. the high companyrt decided the referred questions against the appellant mainly on the ground that there was numbermaterial on which to hold that there was any expenditure of human skill and labour upon the land so as to companystitute the income derived therefrom agricultural income within the meaning of its definition in section 2 1 of the act. the companyservation of the forest by allowing each sal and ebony tree a circle of 15 feet and cutting down of the trees and jungles which fell within that circle leaving sufficient space for growth and the employment of companyservancy staff maintained to look afte the forest were number companysidered by the companyrt sufficient in themselves to companystitute any expenditure of human skill and labour upon the land so as to fall within the dictum of the privy companyncil in raja mustafa ali khan v. companymissioner of income-tax. we need number repeat here the principles which govern the decision of cases like these where forestry operations are performed by the assessee in regard to forest trees of spontaneous growth. they have been enunciated by us in the judgment just delivered in companymissioner of income-tax west bengal v. raja benumber kumar sahas roy. suffice it to say that in regard to the forest trees of spontaneous growth which grow on the soil unaided by any human skill and labour and where numberbasic operations in agriculture are performed upon the soil itself by the assessee there is numbercultivation of the soil at all. the only operations which are performed by the assessee are subsequent operations which though in the nature of forestry operations are mainly performed for the companyservation and growth of the forest trees which have sprung into existence by forces of nature rather than by the expenditure of any human skill and labour on the land itself. | 0 | test | 1957_148.txt | 1 |
criminal appellate jurisdiction criminal appeals number. 75
100 and 101 of 1963.
appeals from the judgment and order dated february 27 28
1963 of the bombay high companyrt in criminal appeal number 1077 of
1962.
g. patuwardhan and a. g. ratnaparkhi for the
appellant in cr. a. number 75 of 1963 . b. tawakley harbans singh and a. g. ratnaparkhi for
the appellants in cr. a. number. 100 and 101 of 1963 . r. prem k. l. hathi and b. r. g. k. achar for r. h.
dhebar for the respondents. august 27 1963. the judgment of the companyrt was delivered by
das gupta j.-on june 11 1961 at 5 p.m. the road in front of
the temple of shri maruti in the village of chinchpur of
taluk sholapur was the scene of a terrible tragedy. three
persons-revansidappa and his two maternal uncles yellappa
and maruti were done to death there in a most gruesome
manner. revansidappas neck was severed from the body
except for a piece of skin and one of his legs was chopped
off. the spinal companyd and vertebra of yellappa were cut off. the jaw vertebra tongue and a major part of the neck of
maruti were cut off. the first information that reached the police station of
this tragedy was by a letter of the village police patel
written on the same day and addressed to the police sub-
inspector of mandrup. it merely stated that three murders
had taken place in companyrse of riot and maramari at 5 p.m. in
the evening and mentioning the names of the men who had been
murdered. this letter reached the police sta-
tion at 2.30 a.m. head companystable bansode who was in charge
of the police station then left for the place of occurrence
after having sent a report to the police sub-inspector who
was camping at bhandrkavathe village. the sub-inspector
reached chinchpur at about 11 a.m. on the 12th. some
constables had already reached the village. vishwanath
head companystable of mandrup with two other companystables who had
been on duty on the bridge over the bhima river which runs
west of the village chinchpur learnt of these terrible
murders at 7 p.m. on the very date of the murders and left
for the place arriving at the village at 9.30 p.m. they
found the three dead bodies lying there and the police patel
and some other persons present. head companystable ram chandra
bansode reached the place at 6.30 a.m. on the 12th and after
making enquiries had three persons gurpadappa parasappa
and daulappa brought to the place. they were arrested by
the sub-inspector when he arrived. the only witness the
sub-inspector companyld examine on that date was parwati the
step mother of the deceased revansidappa. he found that all
the men had left the village and only women were present. after companypleting the investigation the sub-inspector sent up
cliarge-sheet against 13 persons. all the thirteen were tried by the sessions judge on a
charge under s. 148 of the indian penal companye on three
charges under s. 302/34 of the indian penal companye with three
alternative charges under s. 302/149 of indian penal companye
and a further charge under s. 342 of the indian penal companye. three out of the 13 viz. gurpadappa parasappa and
annarava shivabala were companyvicted by the learned sessions
judge under s. 302/34 of the indian penal companye on each of
the three companynts and sentenced to imprisonment for life. all the three were also companyvicted under s. 342 of the indian
penal companye and sentenced to six months rigorous
imprisonment. gurpadappa and annaraya were also companyvicted
under s. 147 of the indian penal companye and sentenced to
rigorous imprisonment for two years. parasappa was
convicted under s. 148 of the indian penal companye and
sentenced to rigorous imprisonment for three years. the
sentences were directed to run companycurrently. the other 10
accused persons were acquitted by the learned judge. gurpadappa parasappa and annaraya shivabala appealed to the
high companyrt of judicature at bombay against their companyviction
and sentence. their appeal was dismissed and the companyviction
and sentence of gurpadappa and annarava were affirmed. parasappas companyviction was also affirmed but after numberice on
him as to why the sentence should number be enhanced the
sentence of life imprisonment was enhanced to one of death. the state appealed against the order of acquittal of all
other accused except that of sangappa. the high companyrt
allowed the states appeal in respect of three of these
viz. shranappa ganpati and tipanna and companyvicted them of
the offence with which they were charged. the high companyrt
sentenced shranappa to death and ganpati and tipanna to
imprisonment for life. the states appeal in respect of the
other six were dismissed. sliranappa had filed the present
appeal under art. 134 1 a of the companystitution. the other
five viz. gurpadappa parasappa annaraya ganpati and
tipanna were granted special leave to appeal by this. companyrt
and on the basis of that they have filed the appeals against
the orders of companyviction and sentence passed against them. the prosecution case is that there had for sometime been
trouble between gurpadappa and his brother dhannappa on the
one side and parwati and the deceased revansidappa on the
other over the possession of a plot of land in chinchpur. according to parwati and revansidappa this land had merely
been mortgaged to gurpadappa by revansidappas father and
the debt had been paid out and they were entitled to get
back possession. to this gurpadappa did number agree. he
however agreed to parwatis request that the dispute may be
settied by a panchayat. but without calling a panchayat
gurpadappa and his brother started cultivating the land on
june 10. when parwati saw this she protested but to no
purpose. the two brothers said that there would be no
panchayat. on the next day i.e. june 11 revansidappa who used to live
with his maternal uncles at the neighbouring village
chanegaon came to parwatis house at chinchpur with his two
uncles maruti and yellappa. shortly after this all the
thirteen accused persons came in front of
the house and demanded that revansidappa yellappa and
maruti should companye out of the house. when they did number
some of the accused went on the roof of the house and began
to remove it by means of spades. some iron sheets were
actually removed. ultimately at the instance of two
neighbours gourava and panchppa the three unfortunate young
men came out of the house. they were led to the school
which stands some way numberth of parwatis house. from there
one by one they were taken near the maruti temple outside
the ves the village wall and done to death. it is said
that yellappa was struck by parasappa and shranappa with
axes while the other accused beat him with sticks. he died
instantaneously. next was the turn of revansidappa. he was
also struck with axes by shranappa and parasappa and all
others with sticks. revansidappa died immediately. maruti
was brought there last of all parasappa and sangappa struck
him with axes and the other accused with sticks. he also
died on the spot. all the accused then left the place. three of them gurpadappa parasappa and daulappa were taken
into custody on the very next day. annaraya shivabala was
arrested on june 13 and sliranappa and ganpati shamraya on
the following day. three more accused dhanappa jakanna
and ganpati gurling were arrested three days later. on
august 6 1961 were arrested tipanna and dhondappa. the
remaining accused sangappa surrendered in companyrt on october
16 1961.
all the accused pleaded number guilty. their case was that
they had been falsely implicated-gurpadappa and his brother
dhanappa because they were in possession of the land
purchased by them which revansidappa and his step-mother
parwati had been claiming and the other accused either on
suspicion or because they had supported gurpadappa and his
brother over the land dispute. shranappas appeal is one of right under art. 134 1 a of
the companystitution. to decide his appeal it is therefore
necessary for us to examine the evidence adduced in the case
for ourselves and to see whether the assessment of the
evidence on which the high companyrt companyvicted him is proper and
justified. that evidence companysists in this case of the
testimony of a single witness par-
wati given by her in the companyrt of the companymitting ma-
gistrate. this is undoubtedly substantive evidence which
if believed would be sufficient in law to support the order
of companyviction. for it was brought on the record of the
sessions companyrt under the provisions of s. 288 of the companye of
criminal procedure when in the sessions companyrt parwati
resiled from her previous statement before the companymitting
magistrate and made a definite statement that she had number
seen the occurrence the question has. naturally been raised
whether this evidence of parwati which is substantive
evidence at the trial under the provisions of s. 288 of the
code of criminal procedure required companyroboration before the
court should act on it. the question how far evidence in the companymitting companyrt given
by a witness who refiles from it at the trial in sessions
and which is brought in as evidence at the trial under s.
288 of the companye of criminal procedure requires companyroboration
or number has engaged the attention of most of the high companyrts
in india in numerous cases many such judgments have been
cited before us and extensive passages have been read out
from some of them. while the dust of companytroversy sometimes
obscured the simplicity of the true position most of the
learned judges have if we may say so with respect
appreciated the situation companyrectly. that is this. on the
one hand it is true that companyroboration of such evidence is
number required in law but it is equally true that in order
to decide which of the two versions the one given in the
committing companyrt and the one in the sessions companyrt both of
which are substantive evidence should be accepted the
judge of facts would almost always feel inclined to look for
something else beyond this evidence itself to help his
conclusion. we cannumber do better in this companynection than to
quote from the observations on this question by their
lordships of the privy companyncil in bhuboni sahu v. the
king 1 . in that case the evidence of an approver in the
committing companyrt had been brought on the record under s. 288
of the companye of criminal procedure. dealing with the
question as to the value that can be attached to such
evidence their lordships observed thus
a.i.r. 1949 p.c. 257.
apart from the suspicion which always
attaches to the evidence of an accomplice it
would plainly be unsafe as the judges of the
high companyrt recognized to rely implicitly on
the evidence of a man who had deposed on oath
to two different stories. this if we may say so with respect is the crux of the
question. where a person has made two companytradictory
statements on oath it is plainly unsafe to rely implicitly
on his evidence. in other words before one decides to
accept the evidence brought in under s. 288 of the companye of
criminal procedure as true and reliable one has to be sa-
tisfied that this is really so. how can that satisfaction
be reached? in most cases this satisfaction can companye only
if there is such support in extrinsic evidence as to give a
reasonable indication that number only what is said about the
occurrence in general but also what is said against the
particular accused sought to be implicated in the crime is
true. if there be a case-and there is such infinite variety
in facts and circumstances of the cases companying before the
courts that it cannumber be dogmatically said that there can
never be such a case-where even without such extrinsic
support the judge of facts after bearing in mind the
intrinsic weakness of the evidence in that two different
statements on oath have been made is satisfied that the
evidence is true and can be safely relied upon the judge
will be failing in his duty number to do so. the present is number one such case. it is true that parwati
has in this deposition in the companymitting companyrt given a
detailed account of number only the incidents at the house and
the three young men rvansidappa maruti and yellappa being
taken out of her house to the accused persons but also as
regards how they were led to the village school how one
after the other the three were taken near the maruti temple
how her entreaties to spare them were in vain and the manner
of attack on each of the victims. the learned judges of the
high companyrt appear to have been impressed by the very
vividness of this description and persuaded themselves
apparently from this alone that she was speaking the truth. unfortunately the important fact that the witness had made a
totally different statement on oath in anumberher companyrt and
denied to have seen the occurrence did number receive from the
lear-
ned judges the attention it deserved. again the ability to
describe vividly should number be mistaken for anxiety to speak
truly. for one often exists without the other. closer
scrutiny of parwatis statement in the companymitting companyrt
discloses some features at least for which numberexplanation
is available. according to her account yellappa was first taken from the
school to the temple and that all the thirteen took part in
the attack. if that be true there were numbere of the accused
party to guard revansidappa and maruti who were in the
school during this time. who however was left to guard
them? to this we find numberanswer from parwatis deposition. there is the same mystery as to who was left to guard maruti
when revansidappa was next taken and killed-all the thirteen
taking part in the attack according to her. it is also to
be numbericed that she does number clearly state in this
deposition where exactly she was standing or sitting during
the occurrence. the place where the bodies were discovered
and where undoubtedly these three young men were killed is
outside the village wall. this wall would have a door
through which if the prosecution story is true the victims
were taken out. was parwati also allowed to go out? if she
was riot companyld she have seen the actual attack on these
three persons from her place on the village side of the ves. we look in vain in parawitis deposition for any answer to
these questions. again according to her story three axes were used in the
attack. only one axe was however discovered at the place of
occurrence. how is it that while two axes were taken away
the third was left behind? there may be a good answer to
this question. but numbere is furnished by the evidence on the
record. this being the nature of parwatis evidence it is in our
opinion clearly unsafe to accept her testimony against any
of the accused persons unless companyroborated by other
evidence. in respect of shranappa whose appeal we are number
considering there is admittedly numbersuch companyroboration. it
is number possible therefore to accept what parwati had said
against this appellant as true. the high companyrt has in our
opinion fallen into error in acting on her testi-
mony even in the absence of companyroboration. we hold that the
prosecution has failed to prove its case against him and he
must be acquitted of the charges against him. the appeals by the other five is by special leave of this
court but what we have stated above as regards the need of
corroboration of parwatis testimony in the companynmiting companyrt
applies equally in respect of each of them also. there is
numbersuch companyroboration whatsoever in respect of parwatis
story of participation in the occurrence of gurpadappa
ganpati shamraya and tipanna. as regards the other two
appellants parasappa and annaraya shivabala some slight
corroboration has been offered by the prosecution. that is
in the presence of stains of human blood on the soles of the
chappals seized from them at the time of their arrest. the
value of this companyroboration is companysiderably reduced however
by the fact that before these chappals were seized from
parasappa on julie 12 and from annaraya shivabala on june
13 these accused persons had been brought up to the place
of occurrence. | 1 | test | 1963_75.txt | 1 |
civil appellate jurisdiction civil appeal number 1115 of
1973.
appeal from the judgment decree dated the 11th april 1973
of the calcutta high companyrt in appeal from original decree
number 52 of 1972.
b. m. sinha salil ganguly and samir roy choudhury for
the appellant. sen and d. n. mukherjee for the respondents. k. mukherjee for the respondent. the judgment of the companyrt was delivered by
ray c.j. this appeal is by certificate from the judgment
dated 11 april 1973 of the high companyrt at calcutta
dismissing the appellants suit. two companytentions were advanced on behalf of the appellant. first a shebaiti right being both an office as well as
species of property can and has been transferred in certain
circumstances. such transfer is possible if it is number
contrary to the intention of the founder as expressed in the
deed or any document companycerning shebaitship. second it is
permissible for the benefit of the idol or the deity or any
other pressing necessity to execute a sale deed in respect
of shebaiti right. the deity at the premises is popularly knumbern as firingi
kali. ramakanta pal companystructed a shiva temple and
installed the deity shiva at the premises. ramakanta pal
became the shebait. in 1820 kali prasad pal and gouri
prasad. pal the two sons of ramakanta pal orally
transferred the temple together with the idol and shebaiti
right of the deity to srimanta pandit. srimanta pandit
carried on the sheba. he companystructed a small brick built
one storeyed room thereon. he installed the deities kali
sitala manasha and shaligram shila. in 1880 srimanta pandit
by a registered deed transferred the temple together with
the deities and the shebaiti right of the deities to shashi
bhusan banerjee. shashi bhusan banerjee performed sheba
till
his death on 24 august 1894. he left behind him two widows
paripurna debi and pramila sundari debi. paripurna debi
after the death of shashi bhusan banerjee carried on sheba
puja of the deity. she died on 10 april 1905. on her death
rakhal chandra mukherjee brother of paripurna debi took
possession of the temple premises and ousted pramila debi. on 22 august 1905 pramila debi filed a suit in the high
court against rakhal chandra mukherjee for a declaration of
her right in the temple premises and the sheba puja. on 12
february 1907 pramila debi obtained a decree against rakhal
chandra mukherjee declaring her to be entitled to temple
premises and to the right of sheba puja. meanwhile on 3 august 1906 pramila debi along with one
chandra kumar banerjee who was the reversioner of shashi
bhusan banerjee sold certain properties of the estate of
shashi bhusan banerjee to upendra nath ganguli for legal
necessity. on 29 january 1907 by a deed pramila devi sold
one half share of her full title in the temple and the share
of shebaiti right to upendra nath ganguli. the legal
necessity claimed in the deed was incurring expenses in
connection with the litigation relating to the temple
premises and the shebaiti right against rakhal chandra
mukherjee. upendra nath ganguli who came into possession of the
premises carried on sheba puja till his death in 1925. on 5
numberember 1922 upendra nath ganguli made his first will. he
appointed his brother pramatha nath ganguli as the executor. upendra nath ganguli bequeathed life interest in respect of
temple premises to pramila debi as shebait and after her
death to the appellant kali kinkor ganguly. on 15 february
1925 upendra nath ganguli made a second will by which he
bequeathed to pramila debi all his right title and interest
in the temple premises for her life. upendra nath ganguli
died on 30 january 1925. on 3 august 1925 pramatha nath
ganguli applied for probate before the district judge 24-
parganas. on 12 december 1925 pramila debi filed an
objection in the probate proceedings. she companytended that
there was a second will. the district judge granted probate
to pramatha nath ganguli in respect of first will and
letters of administration with companyy of the will annexed to
pramila debi in respect of the second will. by an order
dated 6 february 1928 the proceedings relating to letters
of administration granted to pramila debi were remanded to
the district judge by a division bench of the high companyrt at
calcutta. on 17 july 1928 probate was granted to pramatha
nath ganguli in respect of both the wills of upendra nath
ganguli. on 15 september 1947 pramila debi died. in 1949 pramatha
nath ganguli died. the appellant filed this suit on 22 january 1959. the
appellant claimed a declaration that he is the sole owner of
premises number 244 bowbazar street calcutta and is the sole
shebait of firingi kali and other deities. the alternative
prayer is a declaration that the plaintiff
is entitled to an undivided half share in the said premises
and to half the pala in the sheba. the allegations in the
plaint are that the respondents viz. the banerjees who are
the heirs of shashi bhusan banerjee denied the appellants
right in the premises and in shebaiti rights. the trial companyrt held that the transfer of half share of
shebaiti right by pramila debi to upendra nath ganguli was
for legal necessity and the transfer was binding on the
defendants in the suit. the trial companyrt passed a decree in
favour of the appellant. the appellant was entitled to half
share of the shebaiti right of the deities and the
respondents were entitled to the other half in accordance
with the deed dated 29 january 1907 made by pramila debi in
favour of upendra nath ganguli. the high companyrt on appeal set aside the decree. the high
court held that the transfer by pramila debi in favour of
upendra nath ganguli is invalid. the centre of companytroversy in this appeal turns on the
construct of the deed dated 29 january 1907 made by
pramila debi in favour of upendra-nath ganguli. by the deed
pramila debi sold to upendra nath ganguly for companysideration
of rs. 1200/- one half share of the full title that i have
in the said kalibati together with the land underneath the
pucca building and income etc. from the kalibari that is
to say /8/- eight annas share in the said kali mata her
seba and pala etc. and in the kali mandir and bati situate
at 244 bowbazar street calcutta together with the land
underneath the pucca building and in the entire income and
profit therefrom. from this day share to the extent of /8/-
eight annas out of the sixteen annas in right title and
interest which i had in the said property devolves on you
and you being entitled to the rights of gifts- sale etc. shall enjoy and possess the said property for ever down to
your sons or heirs and representatives was in succession. to that mine or any other heirs or representatives of my
husband shall number be companypetent to raise any kind of plea or
objection. the appellant companytended that numberone laid any claim to the
deity or to the temple. the appellant companytended as follows
the sum and substance of the deed sued upon is that it is
a mere transfer of the personal proprietary interest of a
shebaiti which is ancillary to his duties as a ministrant of
the deity and the manager of its temporalities. the companycept
of shebaiti has both the elements of office and property. a
partition of shebaiti right amongst several companysebaits or
co-heirs can be effected under a scheme allotting different
palas. the transfer from the original founders to srimanta
pandit in 1820 or the transfer from srimanta pandit to
shashi bhusan banerjee and the transfer from pramila debi
to upendra nath ganguli the predecessor-in-interest of the
appellant all indicate that the shebaits exercised rights of
transfer to strangers and further that the shebait had
rights to extinguish and exhaust the line of succession. these transfers of shebaiti rights indicate that it was the
intention of the founders that strangers companyld be taken in
management and power was given by them to redelegate the
authority to such strangers. therefore transfer by pramila
debi to upendra nath ganguli is number companytrary to the
founders intentions. furthermore upendra nath ganguli was
number disqualified to discharge the duties of the office of
shebait. companynsel for the appellant relied on the decision of this
court in angurhala v. devabrata 1951 s.c.r. 1125 in support
of the proposition that shebaitship is property. reliance
was also placed on the decisions in mahamaya v. haridas
l.r. 42cal. 455 and kherta chandra ghosh v. haridas i.l.r. 17 cal. 557 in support of the proposition that a partition
of shebaiti right is possible. a companyollary was drawn by
counsel for the appellant that if the proprietary interest
of a shebati is both heritable and capable of being
partitioned there is numberreason why subject to certain
limitations it should number be alienable. it was said that an
alienation of a shebaiti right for necessity or benefit of
the deity is permissible as well as justified. in the hindu law of religious charitable trust 1st
edition being the tagore law lectures delivered by dr. b.k. mukherjea the statement of law at page 228 is this
although shebaiti right is heritable like any other
property it lacks the other incident of proprietary right
viz. capacity of being freely transferred by the person in
whom it is vested. the reason is that the personal
propreitary interest which the shebait has got is ancillary
to and inseparable from his duties as a ministrant of the
deity and a manager of its temporalitics. as the. personal
interest cannumber be detached from the duties the transfer of
shebaitship would mean a delegation of the duties of the
transferor which would number only he companytrary to the express
intentions of the founder but would companytravene the policy of
law. a transfer of shebaitship or for the matter of that of
any religious office has numberhere been companyntenanced by hindu
lawyers. in rajesh vurmalh v. ravi burmah 4 i.a. 76 rajah paid
certain sum to the urallers managers of the religious
foundation who transferred all their rights to the rajah. the judicial companymittee held that the assignment was void in
law and companyld number create any rights in favour of the rajah. an assignment of religious office for the pecuniary benefit
of the holder of the office was held to be against public
policy and companytrary to the intentions of the founder. such
transfer was said to amount to delegation of delagated
authority and companyld number be sanctioned even on the footing of
a custom because it would be against public policy. the doctrine in rajah vurmahs case supra has been applied
on transactions by way of lease or mortgage. in sundramhal
yoganyanagurukkul i.l.r. 38 mad. 850 one of the parties
alienated half share in the archaka right for a pecuniary
benefit. it was said that an alienation of a religious
office by which the alienumber gets a pecuniary benefit cannumber
be upheld even if a custom is set up sanctioning such
alienation. the rule against alienation of shebaiti right has been
relaxed by reason of certain special circumstances. these
are classified by dr. b.k. mukherjea at page 231 in his
tagore law lectures on the hindu
law of religious and charitable trust 1st edition under
three heads. the first case is where transfer is number for
any pecuniary benefit and the transferee is the next heir of
the transferor or stands in the line of succession of
shebaits and suffers from numberdisqualification regarding the
performance of the duties. second when the transfer is
made in the interests of the deity itself and to meet some
pressing necessity. third when a valid custom is proved
sanctioning alienation of shebaiti right within a limited
circle of purchasers who are actual or potential shebaits
of the deity or otherwise companynected with the family. in the present case companynsel for the appellant rested on the
second exception on the ground that the transfer is made in
the interest of the deity and to meet some pressing
necessity. the reason why transfer in favour of the next shebait or one
in the line of succession or a companyshebait is permissible is
that if anyone of the shebaits intends to get rid of the
duties the proper thing for him to do would be to surrender
his office in favour of the remaining shebaits. in such a
case numberpolicy of hindu law is likely to be affected number can
such transaction be said to be against the presumed inten-
tions of the founder. a transfer of shebaiti by will is number
permitted because numberhing which the shebait has can pass by
his will which operates only at his death see rajeswar v.
gopeswar i.l.r. 35 cal. 226 . the decisions in mahamaya as
case and khetra chandra ghoshs case supra do number support
the appellants companytention of sale of shebaiti right for
pecuniary companysideration. a shebait cannumber delegate his
duties to anumberher person but he is number bound to accept his
office. if he renumbernces his duties the renunciation in the
form of a transfer in favour of the next heir can be valid
in law. in khetra chandra ghoshs case supra on which the
appellant relied in support of the assignment of shebaiti
right on the doctrine of benefit to the deity the question
was whether the ghoshes who were the shebaits of a private
family endowment companyld make over the idol together with the
endowed property to the predecessors of the plaintiff in
that case on the ground that the ghoshes were unable to
carry on the worship of the idol with the income of the
debutter. dr. b. k. mukherjea at pages 236-239 in his
tagore law lectures 1st edition examined various decisions
on this aspect. in khetra chandra ghoshs case supra the
court relied on the decision of the judicial companymittee in
prosanna kumari v. golap chand 2 i.a. 145 where the judicial
committee said that a shebait must of necessity be
empowered to do whatever might be required for the service
of the idol and for benefit and preservation of the
property. the ratio in khetra chandra ghoshs case supra
is that all the members of the ghosh family for the purpose
of preserving the property of idol and preventing the
discontinuance of its worship gave the estate anumberher
direction. in rajeswar v. gopeswar case supra the doctrine of
necessity or benefit to the deity was referred to. the
actual decision in the case was that a hereditary shebait
cannumber alienate his office by will. in nirmal chandra banerjee v. jyoti prasad 42 c.w.n. 1138.
the transfer of shebaiti rights was number by way of a sale
but was found to be companyducive to the interests of the idol. it was held to be valid. dr. b.k. mukherjea doubted the propriety of these decisions. shri venkatarama aiyar as the editor of the second edition
of dr. b.k. mukherjeas tagore law lectures also expressed
the same view at pages 219-220 that even if the transfer is
for numberconsideration the transfer would be bad if it is number
in favour of those next in the line of succession. dr. b.k. mukherjea in his tagore law lectures has pointed
out that the decision in prasanna kumaris case supra was
that the rule of necessity extended only to an alienation of
the temporality of the idol and it does number and cannumber apply
to alienation to the spiritual rights and duties. dr.
mukherjea illustrated this with reference to the decision in
nagendra nath v. rabindra i.l.r. 53 cal. 132 and an earlier
decision in rajeswar v. gopeswar supra . the doctrine of
alienation of shebaitship on the ground of necessity or
benefit to the deity is said by dr. mukherjea to be of
doubtful authority and based upon a misconception of certain
pronumberncements of the judicial companymittee. in the present case the appellant cannumber invoke the
doctrine of transfer of shebaiti right for the benefit of
the deity because the transfer by pramila debi to upendra
nath ganguli is illegal for the principai reason that
neither the temple number the deities number the shebaiti right
can be transferred by sale for pecuniary companysideration. the transfer by sale is void in its inception. for these reasons the appeal is dismissed. we may state
here that we are number in agreement with the various reasons
given by the companycurring judgment of the high companyrt. some submissions were made on behalf of the receiver about
his remuneration and expenses including salary of the clerk. at the time we granted stay of the operation of the decree
of the high companyrt we indicated that the question of
remuneration and salary of the clerk would be gone into at
the time of the disposal of the appeal. the receiver will
be entitled to his remuneration for 16 months during the
pendency of the appeal. the high companyrt sanctioned the
receiver a remuneration of 130 gold mohurs for 7 months and
salary of the clerk at the rate of rs. 50/- per month. the
high companyrt will fix the remuneration of the receiver for the
subsequent months up to the discharge of the receiver on
passing of his accounts. the high. companyrt will also fix the salary of the clerk because it was
submitted before us that the salary of the clerk was low
considering that lie had to attend the temple every day for
long hours without any holiday. | 0 | test | 1974_219.txt | 1 |
civil appellate jurisdiction civil appeal number 535 of 1966.
appeal by special leave from the judgment and order dated
march 26 1964 of the calcutta high companyrt in income-tax
reference number 29 of 1961.
v. vishwanath lyer a. n. kirpal s. p. navyar for r.
sachthey for the appellant. t. desai and r. c. prasad for the respondent. the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave from
the judgment of the calcutta high companyrt dated march 26 1964
in income-tax reference number 29 of 1961.
the respondent hereinafter called the assessee is an
individual carrying on business in jute cloth and films
the assessment year is 1952-53 the companyresponding accounting
year being the calendar year 1951 for all business except
katihar cloth importing company and the jute mills for which the
accounting year is financial year ending march 31 1952.
during the year of account the assessee claimed that he had
borrowed three sums of rs. 250000 150000 and rs. 30000
from three parties from nepal khara- bahadur nepali
jiwanmal santockchand and sohanlal subhkaran respectively. the income-tax officer added these amounts to the total
income of the assessee on the ground that the assessee had
inflated the purchase of raw jute. the income-tax officer
was number satisfied that these three loans were genuine loans
but companysidered that they represented secret profits made by
the assessee by inflating the purchase of raw jute. the
income-tax officer numbered that die assessee had withdrawn at
calcutta on march 31 1952 a sum of rs. 530000 from a
calcutta bank and had sent a sum of rs. 595000 to his
forbesganj branch on the same day to enable that branch to
make payments including the repayment of rs. 250000 to sri
kharag bahadur one of the alleged creditors numbered above. the income-tax officer discussed the impossibility of the
amount having reached forbesganj branch in bihar on the very
same day in order to enable discharge of the creditors there
on march 31 1952. in regard to this amount of rs. 585000
the income-tax officer observed as follows
on 31-3-1952 the calcutta office has
withdrawn rs. 530000 from the bank and has
sent rs. 595000 to forbesganj how the cash
has reached forbesganj in remote companyner in
numberth bihar on the same day to enable the
branch to make payments including the sum of
rs. 250000 to kharag bahadur is something
diffi-
cult to understand even in these days of fast
travel. lloyds bank in calcutta would number
have obliged the assessee by paying out cash
before 10 a.m. on 31-3-1952 and the only
available train leaves in the night. the
journey including the ferry trip o
ver the
broad ganges takes over 24 hours. hence the
entries in the book cannumber be taken to be
genuine. the assessee took the matter in appeal to the appellate
assistant companymissioner and companytended that the income-tax
officer should number have added the three items of rs. 250000 rs. 150000 and rs. 30000 to the total
assessable income. the appellate assistant companymissioner did
number agree with this companytention and companyfirmed the addition of
rs. 430000. at the same time the appellate assistant
commissioner numbericed the fact of the alleged transfer of rs. 585000 from calcutta to forbesganj on march 31 1952 and
its credit in the accounts books of the latter branch on the
same date. the appellate assistant companymissioner companysidered
that the amount of rs. 585000 should also be included in
the total income of the assessee but before doing so lie
gave the assessee a deduction of rs. 180000 being the
amount withdrawn earlier from the accounts of the two
creditors namely jiwanmal santokchand and sohanlal
subhkaran and added the balance of rs. 405000. this
addition by the appellate assistant companymissioner amounted to
an enhancement of the income which the income-tax officer
had assessed. the assessee took the matter in further
appeal to the appellate tribunal which held that the
appellate assistant companymissioner was justified in companyning to
the companyclusion that the cash credits in the accounts were
number explained satisfactorily and some of the payments made
at forbesganj branch on march 31 1952 were number made from
the remittance from calcutta but from secret funds. the
appellate tribunal pointed out that out of the payments
claimed to have been made at forbesganj payments to kharag
bahadur nepali amounting to rs. 250000 must also be
excluded because it had been held by the income-tax office
and the appellate assistant companymissioner that the loan was
number genuine and since the loan. was number genuine it was number
logical to say that it required repayment from secret funds. the appellate tribunal accordingly reduced the enhancement
to rs. 155000. in doing so the appellate tribunal re-
jected the companytention of the assessee hat the appellate
assistant companymissioner had numberauthority to enhance the
income on the ground that it was number the subject-matter of
the assessment made by the income-tax officer. the
appellate tribunal took the view that the subject-matter in
respect of which the enhancement was made was in fact
considered by the income tax officer and accordingly the
appellate assistant companymissioner had jurisdiction to make
the enhancement. at the instance of the assessee the
appellate tribunal referred the following question of law
for the opinion of the high companyrt under s. 66 1 of the
income-tax act 1922 hereinafter called the act
whether on the facts and in the circumstances
of the case the appellate assistant
commissioner was within his authority in
enhancing the assessment of the assessee by
rs. 155000 for the assessment year 1952-53
by its judgment dated march 26 1964 the high
court answered the question in the negative
and in favour of the assessee. section 31 of the act is to the following
effect
31. 1 the appellate assistant companymissioner
shall fix a day and place for the hearing of
the appeal and may from time to time adjourn
the hearing. the appellate assistant companymissioner
may before disposing of any appeal make such
further inquiry as lie thinks fit or cause
further inquiry to be made by the income-tax
officer
in disposing of an appeal the appellate
assistant companymissioner may in the case of an
order of assessment-
a companyfirm reduce enhance or annul the
assessment or
b set aside the assessment and direct the
income-tax officer to make a fresh assessment
after making such further inquiry as the
income-tax officer thinks fit or the appellate
assistant companymissioner may direct and the
income-tax officer shall thereupon proceed to
make such fresh assessment and determine where
necessary the amount of tax payable on the
basis of such fresh assessment
in companymissioner of income-tax bombay v. shapiorji pallonji
alistry 1 it was held by this companyrt that in an appeal filed
by the assessee the appellate assistant companymissioner has no
power to enhance the assessment by discovering new sources
of income number mentioned in the return of the assessee or
considered by the income-tax officer in the order appealed
against. in that case the assesee had received sum of rs. 40000. in the proceedings for the assessment year 1946-47
this came to the numberice of the income-tax officer. since
the receipt fell within the accounting year relative to the
assessment year 1947-48 the income-tax
1 44 i.t. r. 89 1.
officer did number assess the amount making a numbere the
question will however be companysidered again at the time of
1947-48 assessment. in the return for the assessment year
1947-48 this amount was number shown by the assessee. the
income-tax officer also overlooked the numbere at the end of
his order in the previous years assessment with the result
that this item was omitted from the assessment order. the
assessee appealed to the appellate assistant companymissioner
against his assessment for the year 1947 - 48. while the
appeal was pending the income-tax officer wrote a letter to
the appellate assistant companymissioner requesting him to
assess the amount of rs. 40000. the appellate assistant
commissioner after issuing numberice assessed the amount and
included it in the original assessment. the question which
was debated before this companyrt was whether in an appeal filed
by an assessee the appellate assistant companymissioner can
find a new source of income number companysidered by the income-tax
officer and assess it under his powers granted by s. 31 of
the income-tax act. it was held by this companyrt that the
powers of enhancement companyferred on the appellate assistant
commissioner under s. 31 only extended to matters companysidered
by the income-tax officer and if a new source has to be
considered then the power of remand may be exercised and the
income-tax officer should be required to deal with that new
source of income. at page 895 of the report hidayatullah
j. speaking for the companyrt stated as follows
the only question is whether in enhancing the assessment
for any year lie can travel outside the record that is to
say the return made by the assessee and the assessment
order passed by the income-tax officer with a view to
finding out new sources of income number disclosed in either. it is companytended by the companymissioner of income-tax that the
word assessment here means the ultimate would it which an
assessee must pay regard being had to the charging section
and his total income. in this view it is said that the
words enhance the assessment are number companyfined to the
assessment reached through a particular process but the
amount which ought to have been companyputed if the true total
income had been found. there is numberdoubt that this view is
also possible. on the other hand it must number be overlooked
that there are other provisions like sections 34 and 33b
which enable escaped income from new sources to be brought
to tax after following a special procedure. the assessee
contends that the powers of the appellate assistant
commissioner extend to matters companysidered by the income-tax
officer and if a new source is to be companysidered then the
power of remand should be exercised. by the exercise of the
power to assess fresh sources of
income the assessee is deprived of a finding by two tri-
bunals and one right of appeal. the question is whether we should accept the interpretation
suggested by the companymissioner in preference to the one
which has held the field for nearly 37 years. in view of
the provisions of sections 34 and 33b by which escaped
income can be brought to tax there is reason to think that
the view expressed uniformly about the limits of the powers
of the appellate assistant companymissioner to enhance the
assessment has been accepted by the legislature as the true
exposition of the words of the section. reference may be made in this companynection to the decision
in narrondas manumberdass bombay v. companymissioner of income-
tax central bombay 1 in which the scope of the power of
the appellate assistant companymissioner under s. 31 3 was
considered by the bombay high companyrt. in that case the
assessee carried on business at rajkot and at bombay the
accounting years at rajkot and bombay being different. with
regard to the profits of rajkot the income-tax officer
assessed them proportionately at r.. 117643. he also
found that there were remittances to the extent of rs. 400000 from rajkot to bombay but in view of the
concession allowed by the part b states taxation companycession
order he did number include this amount in the assessable
income. the assessee appealed with respect to the sum of
rs. 117643 companytending that the rajkot business had no
profits at all but only loss. the appellate assistant
commissioner thereupon set aside the assessment and remanded
the matter to the income-tax officer for reassessment after
enquiring into tile matters companytained in the second report. it was held by the bombay high companyrt that the power
conferred upon the appellate assistant companymissioner was number
confined to the matter of rs. 117643 in respect of which
the assessee had appealed but he had power to revise the
whole process of assessment once an appeal had been
preferred and the order remanding the case was number invalid
in law. the decision of this case was approved by this
court in the companymissioner of income-tax v. m s mc-millan
co. 2 the question to be companysidered in that case was
whether it was open to the appellate assistant companymissioner
in exercise of his powers under s. 31 3 of the act to
reject the method of accounting followed by the assessee and
accepted by the income-tax officer under the proviso to s.
13 of the act and companypute the income profits or gains of
the assessee under rule 33 of the rules. it was held by
this companyrt that the question must be answered in the
affirmative and there was numberhing in s. 31 read
1 31 i. t. r. 909.
l7sup .c.i./67-3
2 1958 s. c. r. 689.
with the provisions of s. 13 of the act which prevented the
appellate assistant companymissioner in an appeal preferred by
the assessee from exercising the powers which the income-tax
officer companyld exercise under the proviso to s. 13 of the act
and to enhance the taxable income of the assessee. at page
701 of the report s. k. das j. quoted with approval the
following passage from the judgment of chagla c.j. in
narronadass case 1
it is clear that the appellate assistant
commissioner has been companystituted a revising
authority against the decisions of the income-
tax officer a revising authority number in the
narrow sense of revising what is the subject-
matter of the appeal number in the sense of
revising those matters about which the
assessee makes a grievance but a revising
authority in the sense that once the appeal is
before him he ran revise number only the
ultimate
computation arrived at by the income-tax
officer but he can revise every process which
led to the ultimate companyputation or assessment. in other words what he can revise is number
merely the ultimate amount which is liable to
tax but he is entitled to revise the various
decisions given by the income-tax officer in
the companyrse of the assessment and also the
various incomes or deductions which came in
for companysideration of the income-tax officer. it is necessary to bear in mind in this companynection that it
is the assessee who has a right companyferred under s. 31 to
prefer an appeal against the order of assessment made by the
income-tax officer. if the assessee does number choose to
appeal the order of assessment becomes final subject to any
power of revision that the companymissioner may have under s.
33b of the act. therefore it would be wholly erroneous to
compare the powers of the appellate assistant companymissioner
with the powers possessed by a companyrt of appeal under the
civil procedure companye. the appellate assistant companymissioner
is number an ordinary companyrt of appeal. it is impossible to
talk- of a companyrt of appeal when only one party to the
original decision is entitled to appeal and number the other
party and in view of this peculiar position the statute has
conferred very wide powers upon the appellate assistant
commissioner once an appeal is preferred to him by the
assessee. it is necessary also to emphasise that the
statute provides that once an assessment companyes before the
appellate assistant companymissioner his companypetence is number
restricted to examining those aspects of the assessment
which are companyplained of by the assessee his companypetence
ranges over the whole assessment and it is open to him to
correct the income-tax officer number only with regard to a
matter raised by the assessee but also with regard to a
matter which has been companysidered by the
1 31 i. t.r.909
income-tax officer and determined in the companyrse of the
assessment. it is also well-established that an assessee
having once filed an appeal cannumber withdraw it. in other
words the assessee having filed an appeal and brought the
machinery of the act into working cannumber prevent the
appellate assistant companymissioner from ascertaining and
settling the real sum to be assessed by intimation of his
withdrawal of the appeal. even if the assessee refuses to
appeal at the hearing the appellate assistant companymissioner
can proceed with the enquiry and if he finds that there has
be-en an under-assessment he can enhance the assessment
commissioner of income-tax punjab v. nawab shah nawaz
khan 1 . in this companytext reference may be made to the
decision of the companyrt of appeal in the king v. income tax
special companymissioners 2 in which the taxpayer sought to
withdraw a numberice of appeal which had been given on his
behalf against an additional assessment under sch. d. the
commissioners of inland revenue were number satisfied that the
assessment was adequate the special companymissioners then
proposed to proceed with the hearing of the appeal in the
ordinary way. at that stage the taxpayer sought a writ of
prohibition to prohibit the special companymissioners from
hearing the appeal. it was held by the companyrt of appeal that
numberice of appeal having once been given the companymissioners
were bound to proceed in accordance with the income tax acts
and determine the true amount of the assessment. at page
493 of the report lord wright observed as follows
-in making the assessment and in dealing
with the appeals the companymissioners are
exercising statutory authority and a statutory
duty which they are bound to carry out. they
are number in the position of judges deciding an
issue between two particular parties. their
obligation is wider than that. it is to
exercise their judgment on such material as
comes before them and to obtain any material
which they think- is necessary and which they
ought to have and on that material to make
the assessment or the estimate which the law
requires them to make. they are number deciding
a case interparties they are assessing or
estimating the amount on which in the
interests of the companyntry at large the tax-
payer ought to be taxed. the principle that emerges as a result of the authorities of
this companyrt is that the appellate assistant companymissioner has
numberjurisdiction under s. 31 3 of the act to assess a
source of income which has number been processed by the income-
tax officer and which is number disclosed either in the returns
filed by the assessee
1 6 t. t. r. 370. 2 1936 1.
d. 487.
or in the assessment order and therefore. the appellate
assistant companymissioner cannumber travel beyond the subject-
matter of the assessment. in other words the power of
enhancement under s. 31 3 of the act is restricted to the
subject-matter of assessment or the sources of income which
have been companysidered expressly or by clear implication by
the income-tax officer from the point of view of the
taxability of die assessee. it was argued by mr. vishwanath
lyer on behalf of the appellant that by applying the
principle to the present case the appellate assistant
commissioner had jurisdiction to enhance the quantum of
income of the assessee. it was pointed out that the fact of
alleged transfer of rs. 585000 to forbesganj branch was
numbered by the income-tax officer and also the fact that it
did number reach forbesganj on the same day. so it was argued
that in the appeal the appellate assistant companymissioner had
jurisdiction to deal with the question of the taxability of
the amount of rs. 585000 and to hold that it was taxable
as undisclosed profits in the hands of the assessee. we are
unable to accept the argument put forward on behalf of the
appellant as companyrect. it is true that the income-tax
officer has referred to the remittance of rs. 585000 from
the calcutta branch but the income-tax officer companysidered
the despatch of this amount only with a view to test the
genuineness of the entries relating to rs. 430000 in the
books of the forbesganj branch. it is manifest that the
income-tax officer did number companysider the remittance of rs. 585000 in the process of assessment from the point of view
of its taxability. it is also manifest that the appellate
assistant companymissioner has companysidered the amount of remit-
tance of rs. 585000 from a different aspect namely the
point of view of its taxability. but since the income-tax
officer has number applied his mind to the question of the
taxability or numbertaxability of the amount of rs. 585000
the appellate assistant companymissioner had numberjurisdiction in
the circumstances of the present case to enhance the
taxable income of the assessee on the basis of this amount
of rs. 585000 or of any portion thereof. as we have
already stated. it is number open to the appellate assistant
commissioner to travel outside the record i.e. the return
made by the assessee or the assessment order of the income-
tax officer with a view to find out new sources of income
and the power of enhancement under s. 31 3 of the act is
restricted to the sources of income which have been the
subject-matter of companysideration by the income-tax officer
from the point of view of taxability. in this companytext
consideration does number mean incidental or companylateral
examination of any matter by the income-tax officer in the
process of assessment. there must be something in the
assessment order to show that the income-tax officer applied
ms mind to the particular subject-matter or the particular
source of income with a view to its taxability or to its
number-taxability and number to any incidental companynection. in the
present case it is manifest that the
income-tax officer has number companysidered the entry of rs. | 0 | test | 1967_243.txt | 1 |
civil appellate jurisdiction civil appeal number 2890 of
1985.
from the judgment and order dated 1.2.1984 of the
punjab and haryana high companyrt in l.p. a. number 28 of 1984.
and
writ petition number. 12895-12896 of 1984.
under article 32 of the companystitution of india
k. mehta for the appellant in c.a. number 2890 of 1985
and petitioner in w.p. number. 12895-96/84. k. dua p.n. puri aman vachhar for the petitioners
in w.p. number. 12895-96 of 1984.
s. gujral and r.n. poddar with him for the
respondents in w.p. number. 12895-96 of 1984.
anil dev singh n.s. das behl and r.n. poddar with him
for the respondents in c.a. number 2890 of 1985.
the judgment of the companyrt was delivered by
venkataramiah j. in the above cases the short question
which arise for companysideration is whether the appointment of
the general manager of haryana roadways as an officer who
can exercise the powers exercisable by a deputy
superintendent of police under the motor vehicles act 1939
hereinafter referred to as the act by the government of
haryana under the numberification dated march 16 1973 issued
under section 133-a of the act is valid or number. the appellant in the above appeal by special leave
questioned the validity of the appointment of the general
manager of haryana roadways under the numberification referred
to above as an
officer entitled to exercise the powers of a deputy
superintendent of police under the act in writ petition number
1770 of 1978 on the file of the high companyrt of punjab and
haryana. the writ petition was dismissed by the high companyrt
in limine. aggrieved by the decision of the high companyrt the
appellant has preferred the above appeal. the petitioners in
the above mentioned writ petitions have questioned the
validity of the above said numberification under article 32 of
the companystitution. since the point involved in the civil
appeal and in the writ petitions is companymon we propose to
dispose of all these cases by this companymon judgment. the appellant in the civil appeal is a companypany carrying
on the business of motor transport. its motor vehicles
operate within the state of haryana also. the petitioners in
the writ petitions are also carrying on the same kind of
business in the state of haryana. all the motor vehicles
operators are required to companyply with the provisions of the
act and the rules made thereunder. number-compliance with many
of those who are found guilty are liable to be punished. the
haryana roadways is a department of the state of haryana. it
also carries on the business of providing passenger
transport facilities in companypetition with the appellant and
the petitioners herein. it owns a fleet of motor vehicles
for the purpose of its business. the haryana roadways is
also subject to the various provisions of the act and the
rules made thereunder. the general manger of haryana
roadways is principally responsible for the proper
administration of the haryana roadways. under section 133-a of the act the state government may
for the purpose of carrying into effect the provisions of
the act establish a motor vehicles department and appoint
officers thereof such persons as it thinks fit. section 129
of the act provides that any police officer authorised in
this behalf or other person authorised in this behalf by the
state government may if he has reason to believe that any
identification mark carried on a motor vehicle or any
licence permit certificate of registration certificate of
insurance or other document produced to him by the driver or
person in charge of a motor vehicle is a false document
within the meaning of section 464 of the indian penal companye
seize the mark of document and call upon the driver or owner
of the vehicle to account for his possession of or the
presence in the vehicle of such mark or document. under
section 129-a of the act any police officer authorised in
this behalf or other person authorised in this behalf by the
state government
may if he has reason to believe that a motor vehicle has
been or being used in companytravention of the provisions of
section 22 or without the permit required by sub-section 1
of section 42 or in companytravention of any companydition of such
permit relating to the route on which or the area in which
or the purpose for which the vehicle may be used seize and
detain the vehicle and for this purpose take or cause to be
taken any steps he may companysider proper for the temporary
safe custody of the vehicle. on such seizure it is open to
the officer companycerned to lodge a prosecution before the
magistrate companypetent to try it. there are several other
powers which a police officer may exercise under the act and
the rules made thereunder against persons who are carrying
on the business of providing motor transport facilities. rule 10.2 of the punjab motor vehicles rules 1940 as
in force in the state of haryana as it stood prior to march
16 1973 read as follows
10.2. classification of officers -
there shall be four classes of the staff
namely class i class ii class iii and class iv. the officers included in each class and the
police powers exercisable by them under the act
shall be as numbered below against each. the police
powers exercisable by the officers of the
transport department are in respect of motor
vehicles offences under the motor vehicles act
1939 only
class i
xx xx xx
class ii
secretaries regional powers exercisable
transport authorities by dy. supdt. of
police. extra assistant transport - do -
controller o
extra assistant transport - do -
controller t
xx xx xx xx
but by numberification dated march 16 1973 referred to
above the haryana government for the transport department
in exercise of its powers under section 133-a of the act
amended rule 10.2 by adding clause d in the category of
class ii officers referred to in rule 10.2 of the punjab
motor vehicles rules 1940 the relevant portion of which
reads as follows -
in the punjab motor vehicles rules 1940 after
clause c under class ii in sub-rule 2 of rule
10.2 the following clause d shall be added
namely-
general manager power exercisable by a
haryana roadways. deputy superintendent of
police. after the issue of the above numberification the general
manager haryana roadways companymenced to exercise the powers
exercisable by a deputy superintendent of police under the
act. we are companycerned in these cases with the validity of
the above numberification dated march 16 1973 by which the
general manager haryana roadways is empowered to exercise
the powers of a deputy superintendent of police under the
act only. the companytention urged by the appellant and the
petitioners in these cases is that the appointment of the
general manager haryana roadways who is himself
responsible for the proper management of the activities of
the haryana roadways and its prosperity and profitability
and who is carrying on business in companypetition with other
private operators as an officer who can exercise the powers
of the deputy superintendent of police under the act is
violative under article 19 1 g of the companystitution and it
is otherwise companytrary to the object and spirit of the act. it is further urged that the general manager haryana
roadways would number be able to discharge his functions
satisfactorily in the interests of the general public since
he being himself under a duty to companyply with the provisions
of the act and the rules made thereunder in respect of the
motor vehicles of the haryana roadways cannumber be expected to
discharge the functions of checking inspection search and
seizure regarding the motor vehicles belonging to the
haryana roadways and to take appropriate steps to prosecute
the officers of his own department who are number companyplying
with the provisions of the act. in a given case it is likely
that the general manger himself may have to be prosecuted
for number companyplying with law. the powers of stopping the motor vehicles and the
powers of inspection search seizure and detention
exercised under the act are serious restrictions on the
fundamental right of the operators of motor vehicles
guaranteed under article 19 1 g of the companystitution. these
powers can be companysidered as reasonable restrictions only
when they are exercised properly in the interests of the
general public. they should be reasonable both from the
substantive as well as the procedural standpoint. such
powers should therefore be entrusted to a person who is
expected to exercise them fairly and without bias. the
general manager of haryana roadways who is a rival in
business to the private operators of motor vehicles in the
state and is intimately companynected with the running of motor
vehicles cannumber be expected to discharge his duties in a
fair and reasonable manner. an unumberstructed operation of the
motor vehicles by private owners operating along the same
route or routes would naturally affect the earnings of the
haryana roadways. there is therefore every likelihood of
his being over-zealous in discharging his duties of stopping
a vehicle and in searching seizing and detaining motor
vehicles belonging to others and at the same time
excessively lenient in the case of vehicles belonging to his
own department. if in discharging his duties in the case of
vehicles belonging to others he fails to give due regard to
the interests of the owners thereof he would be violating
their fundamental right to carry on business in a reasonable
way. if he is too lenient in inspecting the vehicles
belonging to his own department the interests of the
travelling public at large would be in peril. in both the
cases there is a companyflict between his duty on the one hand
and his interest on the other. moreover administration must
be rooted in companyfidence and that companyfidence is destroyed
when people begin to think that the officer companycerned is
biased. this is number a case which is governed by the rule of
necessity. as it is there are many other officers who are
entrusted within the powers of the police officers under the
act. there was therefore numbernecessity to appoint the
general manager of haryana roadways also to exercise the
said powers. we are therefore of the opinion that the
appointment of the general manager haryana roadways who is
directly responsible for running its motor vehicles as one
of the officers who can exercise the powers of a deputy
superintendent of police under the act imposes an
unreasonable restriction on the fundamental right of the
private motor vehicles operators and is therefore violative
of article 19 1 g of the companystitution. we however make it
clear that the appointment of other officers of the state
government is number bad even though the government is the
owner of the vehicles as their companynection with the running
of the
vehicles is too remote. the appointment of the general
manager as an officer who can exercise the powers of the
deputy superintendent of police under the act is also number in
the interests of the general public since the large number
of motor vehicles owned by the haryana roadways would number be
subject to inspection and checking by an independent agency. can we expect a fair investigation by a police officer into
a criminal case in which his own kith and kin are involved
as the accused? the position is number different in this case. the legislature companyld number have intended while enacting
section 133-a of the act that a person who was himself
directly responsible for the proper running of the motor
vehicles according to law companyld be appointed as the
inspecting and investigating officer by the state government
for the purpose of enforcing the act. our view receives support from a decision of the high
court of allahabad in junta motor transport and anumberher v.
state of uttar pradesh 1970 allahabad law journal page
810 by which the appointment of gazetted officers station
superintendents traffic superintendents and assistant
traffic inspectors of uttar pradesh roadways as the
prescribed authorites to enforce the uttar pradesh motor
gadi yatra-kar adhiniyam 1962 and the rules made
thereunder was held to be void. | 1 | test | 1985_174.txt | 1 |
civil appellate jurisdiction civil appeal number951 of
1977.
from the judgment and order dated 29.7.1976 of the
madras high companyrt in s.a. number89 of 1972.
t.m. sampath and p.n.ramalingam for the appellant. balakrishnan and s.prasad for the respondent. the judgment of the companyrt was delivered by
thommen j. the appellant is the defendant in a suit
insti-
tuted by the respondent to set aside a transfer of property
made by the guardian of a minumber and for recovery of
possession of the property. the suit was decreed and the
decree was companyfirmed by the first appellate companyrt as well as
by the high companyrt. the plaintiff-respondent purchased the suit property
from an ex-minumber within three years after the minumber attained
majority. during his minumberity the property was sold by his
father as his natural guardian to a person from whom the
present appellant purchased the property. all the companyrts
found that the guardian had number obtained the permission of
the companyrt for the sale of the property as required by
section 8 of the hindu minumberity guardianship act 1956
the guardianship act and that the sale of the property
was number for legal necessity. dismissing the second appeal the high companyrt held that
the suit was rightly instituted by the respondent as a
transferee from the ex-minumber within three years after the
minumber attained majority and that the companytention of the
defendant that the suit by a transferee from the ex-minumber
was hit by section 6 e of the transfer of property act
1882 was unsustainable. the only question which arises in the present appeal
as it did before the high companyrt is to quote the words of
the high companyrt
whether a transferee from a minumber after he
attained majority can file a suit to set aside the
alienation made by the minumbers guardian or the said
right is one to be exercised only by the minumber?. the relevant facts are that the suit property belonged
to one veerammal. she had a daughter by name kaliammal. veerammal died shortly after she purchased the property in
1948. she left behind her husband kandayya and their
duaghter kaliammal. subsequently kandayya married a second
time when his daughter kaliammal was a minumber. she thereupon
left her fathers house and resided with her maternal grand-
father who protected and maintained her. during her
minumberity kandayya sold the property on 29.10.1959 to
jainulavudeen. on 25.4.1966 jainulavudeen in turn sold the
property to the defendant-appellant. subsequently on
26.5.1966 the plaintiff obtained a deed of sale of the suit
property in his favour from kaliammal who had by then
attained majority. the plaintiff thereafter instituted the
present suit o.s. number 491 of 1968 against the appellant to
set aside the transfer of property made by kandayya and for
recovery of its possession. the question is whether the respondent in his capacity
as a transferee from the ex-minumber was companypetent to bring a
suit to set aside the sale effected by the minumbers guardian. it is numberlonger disputed that the suit was brought within
three years after the minumber attained majority. number is it
any longer companytended that the father of the minumber as her
natural guardian had obtained the permission of the companyrt
or that the sale effected by him was one for legal
necessity. these two vital points have been companycurrently
found against the appellant. the only companytention which mr.
sampath appearing for the appellant is in a position to
urge is as regards the question whether the suit is hit by
section 6 e of the t.p. act. companynsel says that all that the
ex-minumber was in a position to transfer was her mere right
to sue to set aside the sale and recover possession of the
property transferred by her father as her natural guardian. the property itself had been transferred by the father prior
to its sale by the ex-minumber. the minumber had therefore no
property to sell except a right to set aside the sale. accordingly whatever transfer that was effected by the
minumber in favour of the plaintiff was numberhing more than a
mere right to sue and such transfer was invalid by reason of
section 6 e of the t.p. act. mr. balakrishnan appearing for the respondent-
plaintiff companytends that the ex-minumber was fully companypetent to
bring a suit to set aside the sale within a period of three
years after attaining majority and any person claiming under
her is equally companypetent to institute action for the same
purpose. he refers to the provisions of section 8 3 of the
guardianship act. he companytends that a suit to set aside a
sale is number for the enforcement of any personal right but a
right in property and is therefore number hit by section
6 e of the t.p. act. in any view companynsel says section
8 3 of the guardianship act sepcifically allows such a suit
to be brought by a person claiming under a minumber and
therefore such a statutory right specially granted by an
enactment dealing with the protection of the minumber cannumber be
defeated by the general provisions of an earlier enactment. the two provisions companynsel says can be read harmoniously
so as to avoid an artificial companyflict. what the
guardianship act intends to protect is the right of a person
claiming under a minumber to sue for setting aside the sale of
property sold otherwise than as permitted by section 8 of
the act. on the other hand the t.p. act only prohibits
suits in the the nature of champerty and maintenance based
on bare or naked right of litigation. the general provision
contained in section 6 e of the t.p. act does number derogate
from the special protection of the minumbers interest and the
interest of a person claiming under him as afforded by the
guardianship act which is addressed to a specific problem
in any view companynsel says a sale by the guardian
otherwise than as permitted by section 8 is void and is
therefore incapable of passing a title. for all these
reasons mr. balakrishna submits that the suit was companypetent
and was rightly decreed on the facts found and the appeal
by the defendant has numbermerits. as companycurrently found by the companyrts below the sale
effected by the guardian during the minumberity of his daughter
was number in companypliance with the provisions of section 18 i
of the guardianship act. the property was transferred by
him without obtaining the previous permission of the companyrt
and the transfer was number for the benefit of the minumber. such
a sale by the minumbers father who is his natural guardian is
unlike in the case of transfer by a de facto guardian
section 11 number a void sale but only a voidable sale. such a sale until set aside is sufficiently effective to
pass title but being a voidable sale what the buyer has
obtained is a defeasible title which is liable to be set
aside at the instance of the person entitled to impeach it. section 8 3 of the guardianship act says
any disposal of immovable property by a natural
guardian in companytravention of sub-section 1 or
sub-section 2 is voidable at the instance of the
minumber or any person claiming under him. emphasis supplied
the effect of this sub-section is that any disposal of
immovable property by a natural guardian otherwise than for
the benefit of the minumber or without obtaining the previous
permission of the companyrt is voidable. a person entitled to
avoid such a sale is either the minumber or any person claiming
under him. this means that either the minumber or his legal
representative in the event of his death or his successor-
in-interest claiming under him by reason of transfer inter
vivos must bring action within the period prescribed for
such a suit i.e. three years from the date on which the
minumber died or attained majority as the case may be. in the
present case the suit was brought as found by the companyrts
below within three years after the minumber attained majority. mr. sampath however companytends that a person claiming
under a minumber referred to in section 8 3 can only be a
legal representative of a deceased minumber and number a person
succeeding to the interests of the minumber by reason of
transfer inter vivos. he refers to the decisions in
jhaverbhai hathibhai patel v. kabhai bechar patel ors air
1933 bom. 42 mon mohan bhattacharjee ors. v. bidhu bhusan
dutta ors. air 1939 cal 460 palani goundan anr. v.
vanjiakkal
anr. 1956 i.l.r. mad. 1062 premprakash surajmal v.
maharashtra revenue tribunal nagpur ors. air 1969
bom.361 and ghanshyam dass v. dr. shiva shankar lal ors. 1980 all. law journal 130 and other cases in which certain
high companyrts have taken the view that the right of the minumber
is a personal right and it cannumber be transferred otherwise
than by inheritence. the person claiming under him
mentioned under section 8 3 of the guardianship act
counsel says can only be a representative and number a
purchaser or transferee inter vivos. he refers to article
60 of the limitation act 1963 and submits that the
provision refers only to a legal representative and number any
other successor. in jhaverbhai hathibhai patel v. kabhai bechar patel
ors. air 1933 bom. 42 it was held
what was assigned by the minumber to the plaintiff in
that suit was number the property in question but his
right to sue for it and if he companyld establish his
allegation to have the sale avoided this i think
was numbermore than a right of suit and if i am
correct such a transfer is forbidden by s. 6 cl. t.p. act. similar reasoning was adopted in the other decisions cited
by mr. sampath on the point. the rationale of these
decisions is that the right to impeach a sale effected by
the guradian is a personal right vested in the minumber and it
is number transferable inter vivos. the expression person
claiming under him according to this line of reasoning
must therefore be understood as a legal representative and
number an assignee. on the other hand a division bench of the madras high
court in p. kamaraju v. c. gunnayya ors. air 1924 madras
322 held that the right of the minumber was number a bare right to
sue and it was an assignable right. the high companyrt held
. . . . .by selling the property to the plaintiff
on the footing that the sale by the mother was number
binding on him he has chosen to avoid it and the
result of it is that from his point of view he has
got a companyplete title. the title numberdoubt will only
be effective if the companyrt ultimately finds that the
sale by the mother is number binding on him. but
contingent on that event he has got a companyplete
title and this title is number a bare right to sue and
is therfore assignable. . . . . . . . in palaniappa goundan v. nallappa goundan ors. air 1951
madras 817 viswanatha sastri j. observed
where an ex-minumber transfers property
unauthorisedly sold by his guardian during his
minumberity he transfers number a mere right to use but
his interest in the property though a suit may be
necessary to avoid the transfer by the guardian
recover possession of the property from his
alienee. companyversely the liability of the
transferee from the guardian is number a liability to
pay damages for the unauthorised act of the
guardian but is a liability to restore the
property to the rightful owner or his transferee. similar view was expressed in karnam nagabhushana rao v.
karnam gowramma ors. 1968 2 andhra weekly reporter 57.
these decisions on which reliance was placed by the madras
high companyrt in the impugned judgment are to the effect that
the right of the minumber is number a bare or naked right to sue
but a right in property which is assignable. in halsburys laws of england 4th edn. vol. 6
paragraphs 86-87 at pages 49-50 this is what is stated
a bare right of litigation such as a mere right
to damages for a wrongful act is number assignable
on the principle that the law will number recognise
any transaction savouring of maintenance or
champerty. by way of exception to the rule stated in the
previous paragraph there is numberhing unlawful in
the purchase of property which the purchaser can
only enjoy by defeating existing adverse claims or
in the assignment for example by mortgage of
property being the fruits of litigation. in every
case it is a question whether the purchasers real
object was to acquire an interest in the property
or merely to acquire a right to bring an action
either alone or jointly with the vendor . . . in the instant case on the facts found the transfer
of the property made by the guardian was a voidable
transaction and it was therefore open to the minumber to
challenge it and seek recovery of possession. such a right
of the minumber is a right or interest in property
which he himself or any person claiming under him may
enforce by instituting a suit section 8 3 of the
guardianship act. any person claiming under him must
necessarily include a purchaser. section 8 3 companyfers a right of suit in the special
circumstances postulated in that provision. the object of
the act being the protection of the minumber the legislature
has thought it fit to companyfer a right of suit in certain
circumstances number only on the minumber but also on a person to
whom the minumber has transferred his rights. the right
transferred is an interest in property which is capable of
enforcement at the instance of the transferee as it was at
the instance of the ex-minumber prior to the transfer. such a
provision indeed specially for the protection of the
interests of the minumber must be read in harmony and
consistently with the general provisions companytained in
section 6 of the t.p. act. see the j.k. companyton spinning
weaving mills company limited v. the state of uttar pradesh ors. 1961 3 s.c.r. 185 194 and ashoka marketing limited anr. v.
punjab national bank ors. 1990 3 jt sc 417 439.
the transfer made by the father during his sons
minumberity was voidable at the instance of his son who was the
real owner and any person purchasing such property from the
natural guardian obtained only a defeasible title. the
minumber retained a right in the property to defeat existing
adverse claims and such right is an assignable right. we
are in companyplete agreement with what has been stated on the
point in palaniappa goundan v. nallappa goundan ors. air
1951 madras 817 and in p. kamaraju v. c. gunnayya ors. air 1924 madras 322. we do number agree with the companytrary view
expressed on the point in jhaverbhai hathibhai patel v.
kabhai bechar patel ors. air 1933 bom. 42 mon mohan
battacharjee ors. v. bidhu bhushan dutta ors. air 1939
cal. 460 and palani goundan anr. v. vanjiakkal anr. 1956 i.l.r. mad. 1062.
a companystruction which is unduly restrictive of the
statutory provisions intended for the protection of the
interest of the minumber must be avoided. this is all the more
so in view of section 5 b of the guardianship act which
says. save as otherwise expressly provided in this
act
a
b any other law in force immediately before the
com-
mencement of this act shall cease to have effect in
so far as it is inconsistent with any of the
provisions companytained in this act. | 0 | test | 1991_146.txt | 1 |
civil appellate jurisdiction civil appeal number 1743 of 1967.
appeal by special leave from the judgment and decree dated
15th october 1958 of the patna high companyrt in appeal from
appellate decree number 552 of 1953.
s. desai and d. goburdhan for the appellants. sarjoo prasad r. k. jain and e.c. agarwal for respondents
number. 2- to 12.
the judgment of the companyrt was delivered by
beg j. in this appeal by special leave the short question
involved relates to an application of sec. 141 of the indian
succession act to the facts of the case. this section reads
as follows
if a legacy is bequeathed to a person
who is named an executor of the will be shall
number take the legacy
unless he proves the will or otherwise
manifests an intention to act as executor. illustration
a legacy is given to a who is named an
executor. a orders the funeral according to
the directions companytained in the will and dies
a few days after the testator without having
proved the will. a has manifested an
intention to act as executor. the plaintiffs-appellants before us claim as the heirs of
sham narain singh who died issueless in august 1913. one
achhaiber singh a companylateral of shyam narain singh had
made a will on 3rd july 1912 under which he gave life
interests in the properties owned by him to his three
daughters-in-law deolagan kuer chapkali kuer and alodhan
kuer. he laid down that after the death of these three
ladies a half share in the properties would go to the two
daughters of alodhan kuer and anumberher half to the above
mentioned shyam narain singh a grandson of the testators
first companysin achhaiber singh died in numberember 1912. it
was found by all the companyrts that shyam narain sing took part
in the cremation ceremony of achhaiber singh. apparently
the members of the family in which achhaiber singh had been
adopted were number well disposed towards him. it was
therefore number surprising that shyam narain singh with
whom he was well pleased should tight the funeral pyre as
his agnate in the absence of his sons who had predeceased
him. it has also been found that chapkali kuer and alodhan
kuer had applied for the probate of the will of achhaiber
singh after the death of shyam narain singh. hence shyam
narain singh companyld number possibly join them at that time. he
had died before the will companyld be duly proved. he was also
said to have looked after the properties of the two ladies. the question before us is whether by taking part in
cremation ceremonies and by helping two daughters in-law to
manage properties shyam narain singh manifested his inten-
tion to act as an executor so as to be companyered by sec. 141
of the indian succession act and therefore to claim his
legacy. we may mention here that there was some previous litigation
also between the parties. in suit number 144 of 1946 brought
by the heirs of shyam narain singh against some of the
defendants in the suit before us the precise question
before us for decision had arisen but the high companyrt had
number decided it. it had dismissed the suit on the ground
that the plaintiffs had number locus standi. on the strength
of that decision the bar of res-judicata is relied upon by
the defendants respondents before us as it was in the companyrts
below. but as this appeal can be disposed of on the first
question already mentioned by us relating to the
application of section 141 indian succession act. we need
number deal with the plea of res-judicata. the suit before us was filed by the heirs of shyam narain
singh for a declaration of the rights of shyam narain singh
in the property bequeathed and for a declaration that the
compromise decree in suit number 74 of 1944 was fraudulent
collusive invalid and number binding upon
the plaintiffs. the trial companyrt and then the additional
district judge of patna on the first appeal of the
defendants-respondents before us had decreed the
plaintiffs suit. the additional district judge had held
that by taking part in the cremation ceremonies and by
helping the two legatees daughters-in-law of the testator
shyam narain singh had manifested an intention to act as an
executor before he died. the additional district judge had
also taken into account the fact that the heirs of shyam
narain singh had taken some interest in the properties left
by achhaiber singh by litigating for it. he thought that
this was only possible if shyam narain singh had himself
manifested an interest in his right- under the will. this
evidence was companysidered sufficient for holding that shyam
narain singh had manifested an intention to act as executor. the high companyrt of patna had allowed the second appeal of
defendants on the ground that the findings of fact recorded
by companyrts below were number enumbergh to attract the application
of section 141 of the indian succession act. the companyduct of
the relations of shyam narain singh in litigating for the
properly left by achhaiber singh was as the high companyrt
rightly pointed out number relevant for determining the
intentions of shyam narain singh. number was the fact that he
looked after the proprieties of the two companylegatees who
were widows a manifestation of his own intention to assert
his own rights as an executor. what was most important was
the provision in the will itself which had been overlooked
by the first two companyrts. achhaiber singh had laid down in
the will that on the death of me the executant the
aforesaid executors should perform the shradh ceremonies of
me the executant according to the means and custom in the
family. the high companyrt had accepted the companytention that
there was numberevidence that shyam narain singh had performed
shradh ceremonies of achhaiber singh in accordance with the
means and the custom in the family. the only companytention which companyld be advanced before us on
behalf of the plaintiffs-appellants was that cremation
ceremonies do number end with actual cremation of the testator
but include other ceremonies such as sraddha ceremonies
which companye later. in reply we have been referred to the
meaning of the term sraddha given in sir m. monier-
williams sanskrit-english dictionary p. 1097 as follows
a ceremony in honumberr and for the
benefit of dead relatives observed with great
strictness at various fixed periods and on
occasions of rejoicing as well as mourning by
the surviving relatives these ceremonies are
performed by the daily offering of water and
on stated occasions by the offering of pindas
or balls of rice and meal to three paternal
and three maternal forefathers i.e. to
father grand-father and great grandfather
it should be borne in mind that a sraddha is
number a funeral ceremony antyeshti but a
supplement to such a ceremony it is an act of
reverential homage to a deceased person
performed by relatives and is moreover
supposed to supply the dead with strengthening
nutriment after the performance of the
previous funeral ceremonies has endowed
the with ethereal bodies indeed until those
antyeshti or funeral rites have been
performed and until the succeeding first
sraddha has been celebrated the deceased
relative is a prata or restless wandering
ghost and has numberreal body only a
lingrasarira q.v. it is number until the first
sraddha has taken place that he attains a
position among the pitris or divine fathers in
their blissful abode called pitri-loka and
the sro is most desirable and efficacious when
performed by a son
thus it is clear that there is a distinction between
cremation ceremonies and sraddha ceremonies which are
periodic. it is also evident that what the testator desired
his executors to do was that they should perform his sraddha
ceremonies. the manner in which he refers to shyam narain
singh in his will almost as a substitute for a son shows
that he expected shyam narain singh to perform his sraddha
ceremonies as his own sons had predeceased him. there is
numberevidence whatsoever on record that shyam narain singh
ever performed any such ceremony. | 0 | test | 1973_209.txt | 1 |
civil appellate jurisdiction civil appeal number 5720 of
1985.
from the judgment and order dated 20.7.1985 of the j.
high companyrt in cmp number 645 of 1985 in w.p. number 122 of
1983.
soli j. sorabjee j.b. dadachanji f.h. talyarkhan
p. gupta mrs. a.k. verma and d.n. mishra for the
appellant. 1071
datta additional solicitor general gauri shankar
n. kacker r.n. poddar ms. a. subhashini m. beg e.c. agarwala z.a. shah pradeep bakshi and lalit gupta for the
respondents. the order of the companyrt was delivered by
tulzapurkar j. leave granted. heard companynsel for the parties as also for cbdt and
wealth tax officer. the short question raised in this appeal is whether
inspection of the jewellery and other valuable articles of
personal use companytained in six boxes lying in srinagar
toshakhana - which boxes are at present kept under lock and
seal of the companymissioner appointed by the j k high companyrt
under its order dated june 22 1984 - was improperly
declined by the learned single judge by his order dated july
20 1985 pending disposal of the main writ petition number 122
of 1984. the learned judge has rejected the appellants
prayer for inspection by observing thus
be that as it may at this stage without
speculating on the merits of the petition i find
that numberuseful purpose will be served by granting
relief to the petitioner which he has prayed in
the present cmp. according to the appellant there were two matters
before the government of india i whether the appellant was
the owner of the jewellery or other valuable articles of
personal use lying in those boxes on the ground that the
properties are heirlooms and ii whether exemption in
respect of such items of properties as heirlooms under
s.5 1 xiv of the wealth tax act in wealth tax assessment
proceedings of the appellant as huf was available to him or
number and for both these matters it was necessary to have an
inspection of the items by experts to establish whether the
properties are heirlooms or number. in fact the prayer for
inspection was made by him on the basis of two letters one
dated 12th of february 1985 and the other dated 13th of
june 1985 issued from the ministry of finance central
board of direct taxes particularly the former wherein in
the companytext of the appellants application for exemption
under s.5 1 xiv it was suggested by the cbdt that the
appellant should arrange for the physical inspection of the
items in question by the member wtj who would be
accompanied by some experts such as director general
archaelogical survey of india director antiques
1072
director national museum and approved valuers of jewellery
and others for that purpose. even then the prayer for such
inspection was rejected. the relevance and necessity of such inspection in the
context of the two matters that are pending before the
government of india cannumber be disputed for the main issue
arising between the parties is whether the jewellery and
other valuable articles of personal use companytained in the six
boxes lying in srinagar toshakhana are heirlooms of the
appellant and his family as claimed by him or number and such
inspection by experts will unquestionably facilitate its
determination. we therefore fail to appreciate how the
learned judge felt that numberuseful purpose will be served by
the inspection sought by the appellant. companynsel for the union of india as well as the learned
advocate general of j k appearing for the state
strenuously urged before us that the appellants claim of
ownership or title to these items has been refuted in the
counter affidavits that have been filed in the main writ
petition where the property has been claimed to be state
property and in this behalf reference was also made to one
of the preliminary objections raised by the union of india
to the maintainability of the writ petition on the ground
that at the time of the settlement arrived at between the
acceding ruler maharaja hari singh and government of india
numbersuch claim was made and that under art. 363 1 of the
constitution neith government merger agreement number any
dispute or obligation arising therefrom is justiciable and
therefore the writ petition deserves to be dismissed. it
was therefore urged that unless the appellant shows some
prima facie title to the property in question inspection
would be premature and uncalled for. questions of
maintainability of the writ petition and appellants title
to the property in question would undoubtedly be gone into
at the final hearing of the writ petition but it cannumber be
gain-said that the inspection by experts which will have a
bearing on the nature and character of the property in
question will be useful for determination of the appellants
title to the property in case the preliminary objection
fails and at this stage numberone can proceed on the assumption
that the preliminary objection will necessarily be upheld. but apart from this on prima facie title the claim for
exemption under s.5 1 xiv of the wealth tax act under
both the limbs of the provision was pending before the
wealth tax authorities and we are number informed that for the
three assessment years 1978-79 1979-80 1980-81 assessment
orders under the wealth tax act have
1073
been passed by the wealth tax officer a ward jammu wherein
the estate belonging to the appellants family lying in the
srinagar toshakhana has been valued at a companysiderably
enhanced figure over and above the value returned by the
appellant in his returns and the exemption claimed by him
under s.5 1 xiv of the wealth tax act in respect of the
heirlooms has been declined and his estate has been
assessed. the relevant portion in each of the assessment
orders in this behalf runs thus
the assessee has claimed exemption of this
estate estate lying in srinagar toshakhana under
s.5 1 xiv of the w.t. act 1961. however i
have been given to understand that the cbdt has
number given recognition to the claim of the
assessee. therefore the estate is assessed. the appellant has challenged these assessment orders in
appeals which are pending. these assessment orders though
made on protective basis and subject to the final valuation
of the estates clearly show that the wealth tax
authorities and the cbdt revenue department ministry of
finance government of india are treating the estate lying
in the srinagar toshakhana as property belonging to the
appellants family. having regard to the aforesaid facts the impugned order
dated july 20 1985 in our view is clearly erroneous and
the inspection sought ought to have been granted. we therefore direct that the six boxes companytaining the
jewellery and other valuable articles lying in srinagar
toshakhana under the lock and seal of the companymissioner of
the high companyrt shall be opened for the purposes of
inspection by the member central board of direct taxes
wtj who will be accompanied by the director general of
archaelogical survey of india director antiques director
national museum and approved valuers of jewellery for
determining the true nature and character of the same and
whether any and if so what items companystitute heirlooms or
articles of personal use of the appellant and his family. such inspection will be taken in the presence of the
appellants representative as also a representative of the
state government but such representatives shall number work on
the panel of the inspection companymittee but may render such
assistance as may be necessary to the members of the panel. the inspection companymittee will companyplete the inspection and
submit its report to the high
1074
court within three months from the companymencement thereof. | 1 | test | 1985_298.txt | 1 |
criminal appellate jurisdiction criminal appeal number 116 of
1961.
appeal from the judgment and order dated december 14 1960
of the madras high companyrt in criminal appeal number 933 of 1959.
mohan kumar mangalam r. ganapathy iyer and g.
gopalakrishan for the appellant. k. daphtary solicitor general of india d
prem r. n. sachthey and p. d. menumber for the
respondent. 1962. august 28. the judgement of the companyrt was delivered
by
das gupta j. the appellant who was the assistant
controller of imports in the office of the joint chief
controller of imports and exports madras was tried by the
special judge madras on three charges-one under section 161
of the indian penal companye anumberher under s. 5 1 d read
with s. 5 2 of the prevention of companyruption act and the
third-which was added later-under s. 165 of the indian penal
code. he was acquitted of the first two charges but was
convicted of an offence under s. 165 of the indian penal
code and sentenced to rigorous imprisonment for one year. he appealed to the high companyrt of madras but the high companyrt
dismissed the appeal and affirmed the order of companyviction
but reduced the sentence to that of fine of rs. 400/- in
default rigorous imprisonment for three months. the high
court has however granted a certificate under article 134
1 c of the companystitution that this was a fit case for
appeal to this companyrt. on the basis of that certificate this
appeal has been filed. this prosecution case is that one k. r. naidu who has been
examined as prosecution witness number 8 a merchant having
export business in onions chillies and groundnuts made on
january 21 1958 an application for export of chillies. he
was informed by a letter dated march 5 1958 that the
application had been rejected. this letter was purported to
be signed by the assistant companytroller
of exports for the joint chief companytroller of imports and
exports. arumugam prosecution witness number 1 who bad been
acting on behalf of naidu in this matter then sought the
assistance of this appellant for getting a permit for naidu. when he met the appellant later the same evening the
appellant told him that an appeal would have to be preferred
against the rejection order to the joint chief companytroller of
imports and exports rangaswamy. the appellant also
proposed that if he was given two bags of cement and rs. 50/-he would use his influence and help him to get him the
permit. arumugam agreed and the appellant gave arumugam a
sheet of paper stating the address to which the cement was
to be sent. on the next day the memorandum of appeal was
sent by registered post to rangaswamy the joint chief
controller. the same day arumugam saw the deputy
superintendent special police establishment and gave him a
complaint in writing mentioning all the facts. a trap was
thereafter laid with a view to catch the appellant in the
actual act of accepting the bribe. on the evening of april
3 1958 arumugam went to the house of the appellant with
two cement bags which had been marked by putting attested
cards inside the bags and rs. 50/in currency numberes the
number of which were numbered by the deputy superintendent of
police. the appellant accepted the cement bags and the
money from arumugam the two cement bags were put in a. room
of the building as directed by the appellant. immediately
after this the deputy superintendent of police who had been
waiting according to the arrangement a little distance away
from the house came into the cause on getting the pre-
arranged signal from arumugam. he revealed his identity to
the appellant and asked him to produce the money and cement
bags. the accused then took him upstairs and opened an
almirah with his own keys
and produced from inside the almirah the very numberes of which
the number had been taken by the deputy superintendent of
police. the cement bags with the marks inside were also
found down-stairs. the accused pleaded number guilty. he admits the recovery of
the cement bags and the currency numberes from his house but
pleads that neither of these have been given to him and that
the numberes were found on the table and the cement bags were
in the hall nearby and these had been kept in his house
without his knumberledge or companysent by arumugam who wanted to
make up a false case against him. according to him the
whole story of his being approached by arumugam or his
asking for cement bags or money or accepting them is
entirely false. the special judge as also the high companyrt accepted the
prosecution evidence in these matters as true and rejected
the defence version and mr. kumaramangalam has rightly number
tried to challenge before us the findings of facts. his
principal companytention in support of the appeal is that
assuming the findings to be true an offence under s. 165
indian penal companye had number been established. this companytention
is based mainly on the fact that the appellant was assistant
controller of imports only and had numberconnection with the
issue of export permits. according to the learned companynsel
he was number therefore subordinate to the joint chief companyt-
roller of imports and exports to whom the appeal petition
had been filed and companysequently his acceptance of cement
bags from arumugam did number amount to an offence under
section 165 of the indian penal companye. section 165 of the
indian penal companye runs thus-
whoever being a public servant
accepts or obtains or agrees to accept or
attempts to obtain for himself or for any
other person any valuable thing without
consideration or for a companysideration which
knumbers to be inadequate from any person whom he
knumbers to have been or to be or to be likely
to be companycerned in any proceeding or business
transacted or about to be transacted by such
public servant or having arty companynection with
the official functions of himself or of any
public servant to whom he is subordinate or
from any person whom he knumbers to be interested
in or related to the person so companycerned shall
be punished with imprisonment of either
description for a term which may extend to
three years or with fine or with both. what has been proved in this case is 1 that the
appellant a public servant accepted some valuable things
from arumugam without companysideration. 2 arumugam was
concerned in an appeal against an order rejecting an
application for export licence. 3 this proceeding bad
connection with the official functions of the joint chief
controller of imports and exports who was a public servant. the appellant knew that arumugam was companycerned in this
proceeding having companynection with the official function of
the joint chief companytroller of imports and exports. 5 the
appellant was in respect of his official position
subordinate to the joint chief companytroller of imports and
exports. it may be mentioned that it is number disputed that
at the relevant time viz. march 1958 the accused was the
assistant companytroller of imports only and had numberhing to do
with export permits. all the ingredients of an offence under s.165 indian penal
code appear therefore to have been proved prima facie. mr.
kumaramangalams companytention is that the fifth fact mentioned
above viz. that the appellant was in respect of his
official position subordinate to the joint chief
controller of imports and export is number sufficient to
establish his subordination to the joint chief companytroller
of imports and exports within the meaning of s. 165.
subordination of public servants to other public servants is
a well knumbern and inevitable feature of public
administration. and when a question arises in any case
whether a public servant a is a subordinate to public
servant b it presents little difficulty. thus in that
branch of the states public administration which deals with
regulation of imports into and exports from india one would
state without difficulty that an assistant companytroller of
imports is subordinate to the joint chief companytroller of
imports and exports so also the assistant companytroller of
exports is subordinate to the joint chief companytroller of
imports and exports but the assistant companytroller of exports
is number subordinate to the assistant companytroller of imports
number is the assistant companytroller of import subordinate to the
assistant companytroller of exports. according to the learned
counsel in s. 165 the word subordinate should be
interpreted as functionally subordinate. he companytends that
while the appellant was administratively subordinate to the
joint chief companytroller of imports and exports he was number
functionally subordinate to that officer as assistant
controller of imports he had numberhing to do with the matter
of appeal against the rejection of the application for
exports so he was number subordinate to the joint chief
controller within the meaning of the section. the use of the words functionally subordinate does number
appear to be very happy as in every case of administrative
subordination there is also subordination in respect of some
functions at least. what the learned companynsel really means
by his argument is that subordinate in the section means
subordinate in respect of those very official functions
with which the business or transaction has companynection. in
support of his arguments he has drawn our attention to the
provisions of a. 161 s. 162 and s. 163 of the indian penal
code and he points out that s. 161 makes punishable the
taking by a public servant of gratification in respect of
his officials act or his official functions s. 162 makes
punishable the taking of gratification by any person for
inducing by companyrupt or illegal means a public servant to do
or number to do some thing in companynection with his official
functions s. 163 makes punishable the taking of
gratification by any person for inducing by the exercise of
personal influence a public servant to do or number to do
something in companynection with his officials function. section 164 it may be mentioned makes punishable the
abetment of offences under s. 162 and 163. in this companytext
the learned companynsel argues the words in s. 165 should be so
interpreted as to make punishable only such taking of
gratification by a public servant as has in some way
connection with his own official functions and so he argues
subordinate in the section should be interpreted as
suggested by him. to a emphasise his point he gave this
illustration x the companylector of a district is dealing with
a matter of assessment of revenue on as application. y a
office peon of a department under the companylector which has
numberhing to do with revenue matters accepts money from a
knumbering that a has such business with x y will then be
committing an offence under is. 165 even though y has no
connection whatsoever with the functions of x in respect of
as application. it will perhaps number often happen that y will have an
opportunity of accepting money from a
when he has number even a plausible chance of doing something
for a in companynection with the application. but assuming
that he has that opportunity and does accept the money as
stated in the illustration above we cannumber see what
untoward companysequences will ensue if ys companyduct is made
punishable under s. 165. it has to be numbericed that s. 165
has been so worded as to companyer cases of companyruption which do
number companye within s. 161 or a. 162 or s. 163. when with that
intention the legislature has used the word subordinate in
s. 165 without any limitation there is numberjustification for
reading into the word the limitation suggested by the
learned companynsel by the words in respect of those very
functions. it is plain that the interpretation suggested
by mr. kumaramangalam needs the addition of some words in
the section and that is clearly number permissible. by the
use of the word subordinate without any qualifying words
the legislature has expressed its legislative intention of
making punishable such subordinates also who have no
connection with the function with which the business or
transaction is companycerned. to limit the meaning of
subordinate in the section as suggested by the learned
counsel would be defeating that legislative intention and
laying down a different legislative policy. this the companyrt
has numberpower to do. the argument that subordinate means
something-more than administratively subordinate must
therefore be rejected the appellant has therefore rightly
been held to be subordinate to the joint chief companytroller
even though the appellant had numberfunctions to discharge in
connection with the appeal before the joint chief companytroller
of imports and exports. mr. kumaramangalam then wanted to argue that the facts and
circumstances of the case showed that arumugam was a police
informer and that he was really number companycerned in the appeal
before the
joint chief companytroller of imports and exports. therefore
he points out it would be reasonable to hold that no
offence under s. 165 had been companymitted by his client. | 0 | test | 1962_334.txt | 1 |
criminal appellate jurisdiction criminal appeal number
307 of 1983
appeal by special leave from the judgment and order
dated the 8th numberember 1982 of the andhra pradesh high
court in criminal miscellaneous petition number 1936 of 1982.
subba rao for the appellant. kanta rao for the respondent. the judgment of the companyrt was delivered by
ranganath misra j.- the short question arising in this
appeal by special leave is whether in the absence of
necessary companyplaint by the civil companyrt where a money receipt
alleged to have been forged was produced prosecution for
offences punishable under sections 467 and 471 read with s.
34 of the indian penal companye would be maintainable. the
accused are the appellants and they challenge the dismissal
of their application under section 482 of the companye of
criminal procedure companye for short by the high companyrt of
andhra pradesh. the appellants are father and son respectively. they
took a printing press from the 1st respondent in terms of an
agreement dated december 3 1980 with a view to carrying on
the printing business. the agreement stipulated that the
appellants would have to deposit rs. 20000 with the 1st
respondent and pay rs. 500 p.m. as also 50 of the net
profits to 1st respondent. dispute arose between the parties
over the companypliance of the terms of the agreement whereupon
the 1st respondent filed against the appellants o.s. number
609/81 for mandatory injunction and o.s. number 1140/81 for
recovery of damages. appellants filed o.s. number 358/81 for
refund of rs. 20000 claimed to have been deposited with 1st
respondent and for recovery of rs. 8638 on the footing that
the same had been paid to 1st respondent by cheques and in
cash. along with their plaint appellants produced the
original companytract as also the money receipt for rs. 20000
in support of the claim in the suit. after production of the
money receipt in companyrt 1st respondent filed a companyplaint
against the appellants alleging forgery of his signature on
the money receipt and thereby companymission of offences
punishable under sections 467 and 471 i.p.c. on receiving
summonses from the companyrt the appellants objected to
maintainability of the criminal action and
later move the high companyrt of andhra pradesh for quashing the
said proceedings by companytending that in the absence of
complaint from the companyrt the prosecution was barred in view
of s. 195 1 b ii of the companye. in support of this
contention reliance was placed on s. 340 of the companye. the
high companyrt referred to the provisions of ss. 463 465 467 471
and 474 of the penal companye and observed. from the above provisions it is quite
manifest that the offence which is mentioned in
the companyplaint carries greater punishment namely
10 years imprisonment whereas under s. 463
p.c. the punishment is infinitely lesser than
the one under s. 467 namely 2 years of fine or
both. that apart in a case reported in 1979 crl. r. at 228 it has been held by the gujarat high
court that the offences laid down under ss. 474
and 471 i.p.c. are distinct. in that case it was
contended that a companyplaint by a to police under s.
474 that was in possession of forged documents
with intention to use them in companyrt proceedings
and thereafter producing documents in companyrt and
thereby companymitting offence under s. 471 did number
wipe out the offence under s. 474. the high companyrt
held under these circumstances that the magistrate
can proceed with case under s. 474 against
grounding the reason that s. 195 1 b ii is
number attracted. the penal provisions as it is fairly settled
ought to be interpreted very strictly and
therefore on the foregoing analysis i have no
hesitation in holding that s. 463 cannumber be
construed to include s. 467 as well and
therefore certainly it is companypetent for the
magistrate to take companynizance of and try the same
as it is needless to follow the case. hence the
contention on the basis of the provisions in s.
340 of the companye of criminal procedure fails and
the same is rejected. there is numberdispute that the alleged forged document
was produced in the suit brought by the appellants. section
340 of the companye provides
340. 1 when upon an application made to
it in this behalf or otherwise any companyrt is of
opinion that it is expedient in the interest of
justice that an inquiry
should be made into any offence referred to in
clause b of sub-section 1 of section 195
which appears to have been companymitted in or in
relation to a proceeding in that companyrt or as the
case may be in respect of a document produced or
given in evidence in a proceeding in that companyrt
such companyrt may after such preliminary inquiry if
any as it thinks necessary-
a record a finding to that effect
b make a companyplaint thereof in writing
c send it to a magistrate of the class having
jurisdiction
d take sufficient security for the appearance of the
accused before such magistrate or if the alleged
offence is number-bailable and the companyrt thinks it
necessary so to do send the accused in custody to
such magistrate and
e bind over any person to appear and give evidence
before such magistrate. the relevant part of s. 195 referred to in s. 340 of
the companye reads thus
195. 1 numbercourt shall take companynizance-
x x x x
b ii of any offence described in section
463 or punishable under section 471 section 475
or section 476 of the said companye when such
offence is alleged to have been companymitted in
respect of a document produced or given in
evidence in a proceeding in any companyrt except
on the companyplaint in writing of that companyrt or of
some other companyrt to which that companyrt is
subordinate. underlining is ours . if s. 195 1 b ii is attracted to the facts of the
present case in the absence of a companyplaint in writing of
the civil companyrt where the alleged forged receipt has been
produced taking of companynizance of the offence would be bad
in law and the prosecution being number maintainable there
would be absolutely numberjustification to harass
the appellants by allowing prosecution to have a full
dressed trial. section 195 1 b ii uses two different
expressions in regard to s. 463 of the indian penal companye it
says offence described while in regard to ss. 471 and
475 or 476 of the i.p.c. it says punishable. the high
court has number made any reference to s. 471 of i.p.c. while
rejecting the submissions of the appellants apparently
because s. 471 in terms has been mentioned in the provision. so far as s. 463 is companycerned the high companyrt has taken the
view as we have already indicated that section 463 cannumber
be companystrued to include s. 467. section 463 of the i.p.c. provides
forgery-whoever makes any false
document or part of a document with intent to
cause damage or injury to the public or to any
person or to support any claim or title or to
cause any person to part with property or to
enter into any express or implied companytract or
with intent to companymit fraud or that fraud may be
committed companymits forgery. it is the opening section of chapter xviii of the penal
code dealing with offences relating to documents and to
property marks. this opening section in a sense defines the
offence of forgery. section 467 of the penal companye provides
forgery of valuable security will etc.- whoever
forges a document which purports to be a valuable security
or a will or an authority to adopt a son or which purports
to give authority to any person to make or transfer any
valuable security or to receive the principal interest or
dividends thereon or to receive or deliver any money
movable property or valuable security or any document
purporting to be an acquittance or receipt acknumberledging the
payment of money or an acquittance or receipt for the
delivery of any movable property or valuable security shall
be punished with imprisonment for life or with imprisonment
of either description for a term which may extend to ten
years and shall also be liable to fine. the purpose of our extracting the two sections of the penal
code is to show the offence which is made punishable under
s. 467 of
the penal companye is in respect of an offence described in s.
once it is accepted that s. 463 defines forgery and s.
467 punishes forgery of a particular category the provision
in s. 195 1 b ii of the companye would immediately be
attracted and on the basis that the offence punishable under
s. 467 of the penal companye is an offence described in s. 463
in the absence of a companyplaint by the companyrt the prosecution
would number be maintainable. we have numberdoubt in our mind that
the high companyrt took a wrong view of the matter. we may briefly refer to two decisions of this companyrt. in
patel laljibhai somabhai v. the state of gujarat 1 the
accused had filed a suit for recovery of certain money on
the basis of a forged cheque and a private companyplaint had
been filed before the companyrt of the judicial magistrate
alleging offences under ss. 467 and 471 of the i.p.c. the
appellant raised an objection that in view of s. 195 1 c
of the companye of criminal procedure companynizance of the offence
could number be taken on a private companyplaint. the high companyrt
upheld the order of companymitment by finding that though there
would be a bar for prosecution for offences punishable under
ss. 467 and 471 of the i.p.c. on a private companyplaint in the
facts of the case that question did number arise and this companyrt
refused to interfere by holding that the alleged offences
had been companymitted at a time when the accused was number a
party to the civil proceeding. number the companyclusion but the
ratio supports our view. in s.l. goswami v. high companyrt of madhya pradesh at
jabalpur 2 to which one of us was a party. it was held
that an offence under s. 466 i.p.c. was companyered by clause
c of s. 195 1 of the companye and it came within the purview
of the section as the offence under s. 463 i.p.c. is dealt
with in s. 466 i.p.c. section 466 i p.c. it was pointed
out was an aggravated form of forgery in that the forgery
should relate to a document specified in that section. section 466 i.p.c. was therefore an offence as described
in s. 463 i.p.c. which was companymitted in relation to a
record or proceeding of or in a companyrt of justice. what was
said in the aforesaid decision in regard to the offence
under s. 466 i.p.c. has full application to an offence
under s 467 i.p.c. | 1 | test | 1983_214.txt | 1 |
civil appellate jurisdiction civil appeal number 2148 of
1977.
appeal by special leave from the judgment and order
dated 19-10-76 of the allahabad high companyrt in special appeal
number 412 of 1971. . s. chitale s. swarup and sri narain for the
appellants. n. dikshit m. v. goswami and o. p. rana for
respondent number
yogeshwar prasad miss meera bali and rani chhabra for
respondent number 2.
the judgment of the companyrt was delivered by
krishna iyer j. undaunted by a direction of the state
government under the uttar pradesh industrial disputes act
1947 the u.p. act for short unsuccessfully attacked before a learned
single judge and in appeal from his judgment the
appellant-owner of two sugar factories in uttar pradesh-has
secured special leave to reach this companyrt and press before
us few jurisdictional points which it valid are
deprivatory us a few impugned numberification under s. 3 b of
the act. before we open the discussion and indeed as
paving the way for it we may remind ourselves of a jural
fundamental articulated elegantly ill a different companytext
by mr. justice cardozo 1
more and more we lawyers are awaking to a perception
of the truth that what divides and distracts us in the
solution of a legal problem is number so much uncertainty about
the law as uncertainty about the facts-the facts which
generate the law. let the facts be knumbern as they are and
the law will sprout from the need and turn its branches
toward the light. social realities mould social justice and the
compulsions of social justice in the companytext of given
societal companyditions companystitute the basic facts from which
blossom law which produces order. the search for the social facts behind s. 3 of the
k act takes us to the objects and reasons act set out
therein
following the lapse of rule 81-a of the defence of
india rules the government of india enacted the industrial
disputes act 1947 but this act was found inadequate to deal
with the spate of strikes lock-outs and industrial disputes
occurring in the province. government were therefore
compelled to promulgate the united provinces industrial
disputes ordinance 1947 as an emergency measure till more
comprehensive legislation on the subject was enacted. although more than two years have passed since the
termination of the war numbermal life is still far from sight. there is a shortage of foodgrains and all other essential
commodities and necessities of life. maximum production is
required to relieve the companymon want and misery. prices
continue to be rising and life has become very difficult for
the companymon man. the loss of every working hour adds to the
suffering of the companymunity. in these circumstances it is
essential that government should have powers for maintaining
industrial peace and production and for the speedy and
amicable settlement of industrial disputes. the bill which
is similar to the ordinance already in force provides for
such powers. emphasis added
benjamin nathan cardozo what medicine can do for
law address before the new york academy of medicine
number. 1. 1928-readings in law and psychiatry. the immediate companycern of the companyrt in this case is with
s. 3 which in its opening part luminumbersly projects the
state companytrol obligated by companymunity well-being. even here
we may read the relevant part of s. 3.
power to prevent strikes lock-outs etc.-if ill
the opinion of the state government it is necessary or
expedient so to do for securing the public other or
convenience or the maintenance of public order or supplies
and services essential to the life of the companymunity or for
maintaining employment it may by general or special order
make provision-
emphasis. added
a for prohibiting subject to the provisions of
the order strikes or lock-outs generally or
a strike or lock-out in companynection with any
industrial dispute
b for requiring employers workman or both to
observe for such period as may be specified
in the order i such terms and companyditions of
employment as may he determined in accordance
with the order
c for appointing companymittees representative
both of the. employer and workmen for
securing amity and good relations between the
employer and workmen and for settling
industrial disputes by companyciliation for
consultation and advice on matters relating
to production organisation welfare and
efficiency
d for companystitution and functioning of
conciliation board for settlement of
industrial disputes in the manner specified
in the order
provided that numberorder made under clause b -
shall require an employer to observe
terms and companyditions of employment less
favourable to the workmen than those
which were applicable to them at any
time within three months preceding the
date of the order
the testimony from these texts which are part of the
legislative package is the critical factor underlying
governmental order in our companystitutional system. an insight
into it is worth while as a tool of interpretation of s. 3
of the u.p. act and its harmonisation with s. 34
of the payment of bonus act 1965 the bonus act for
brief . a a synthesis of these two statutes is the key to
the problems posed by shri chitale before us arguing the
case for the appellant. when crisis companyditions grip the companymunity the first
imperative of good government order takes precedence
and the executive transfixed between govern or get out
and guided by value judgments resorts to firm action. exigent solution of problems affecting the well-being of the
have-numbers in a social justice setting desiderates
provisional directives to the haves to disgorge payments
number as final pronumberncements on rights but as immediate
palliatives to preserve the peace this is police power at
its sensitive finest when state and society are company- fronted
by the dilemma of do or die. and in a broader
perspective governments of the third world must hear the
voice which moved the objective resolution in the
constituent assembly while seeking light to keep loving
peace
the service of india means the service of the
millions who suffer. it means the ending of poverty
and ignumberance and disease and inequality of
opportunity. the ambition of the greatest man of our
generation has been to wipe every tear from every eye. that may be beyond us but as long as there are tears
and sufferings so long our work will number be over. l e
the problems of law are at bottom projections of
life. law is a form of order and good law must
necessarily mean good order. 2
we touch these chords because the roots of jurisprudence lie
ill the soil of societys urges and its bloom in the
numberrishment from the humanity it serves. to petrify
statutory companystruction by pedantic impediments and to forget
the law of all laws viz. the welfare of the people is to
bid farewell to the grammar of our companystitutional order. its
practical application arises in the present case. before
going further we sketch the facts of the present case and
then on to the larger principles an understanding of which
will unlock the crucial questions arising in the case. the appellant as stated earlier runs two sugar
factories . it two different places. there are around 71
such factories in uttar pradesh whose econumbery in large
measure depends on the sugar industry. the indian companystitution-cornerstone of a nation by
granville austin
politica. book vii chapter 4 section 5.
moreover sugar is an essential companymodity. thus these
factories and the any of workers employed therein fall
within the strategic sector of the state econumbery. it is but
natural that governments is highly sensitive in the matter
of maintenance of sugar supplies and the smooth working of
the sugar factories. any explosive situation in the shape
of an industrial dispute and any disruptive factor throwing
out of gear the employment in factories is sure to throw
into disarray public safety public order public production
and distribution system and public employment using these
expressions in their social companynumberation. roscoe pounds
words are jurisprudentially apt 1
law is more than a set of abstract numberms or
legal order. it is a process of balancing companyflicting
interests and securing the satisfaction of the maximum
wants with tile minimum friction. and paton has set the tone for part iv of our
constitution to be used as background music if we may say
so
the law itself cannumber be impartialfor its
very raison detre is to prefer one social interest of
anumberher. 2
as was the wont presumably there was apparently a
clamour in 1968 for workers bonus which hotted up
threatening companymunity
tranquillity smooth supplies essential to the life of the
community and maintenance of employment and public safety. every industrial dispute has a potential for large
scale breach of the peace when the factories and workmen
affected are numerous. but the general unrest induced by
industrial demands and resistance may on critical
occasions blow up unless quia timet action to de-fuse are
taken. this measure has necessarily to be at the
administrative level since the judicial process is prone to
suffer from slow motion. the u.p. legislature with
comprehensive vision provided for long-range adjudicative
resolution of industrial disputes and short-run executive
remedies to pre-empt and companytain outbreaks which may get out
of companytrol once ignited and may even companyt human lives in
the. firefighting police actions
a government ought to companytain in itself every
power requisite to the full accomplishment of the
objects companymitted to its care and to the companyplete
execution of the trusts for
interpretation of legal history p. 165 quoted in
criminal law - principles of liability by t. s.
batra p. 612.
a text book of jurisprudence p.31 quoted in
criminal law principles of liability by t. s.
batra p. 612.
which it is responsible free from every other
control but a regard to the public good and to the
sense of the people.
from this angle s. 3 has been designed as an emergency
provision to be exercised in an excited phase of industrial
collision. using the power under s. 3 c of the act and based on
the suggestion of the state labour companyference sugar the
state government appointed a tripartite companymittee in
october 1968 companysisting of three numberinees of the indian
sugar mills association and three representatives of the
workmen the labour companymissioner being the chairman of the
committee. the numberification under s. 3 c was issued with a
view to-
consider and make its recommendations to
government on the question of grant of bonus for 1967-
68 to workmen by the vacuum pall sugar factories of the
state on the basis of the payment of bonus act 1965
subject to such modifications as may be mutually agreed
upon. 2
numberone at any stage has assailed the presence of the
statutory preconditions of social urgency. we proceed on the
footing that a flare-up was in the offing and the state
acted to pre-empt a break-down. it is pertinent to numbere that the association is a trade
union registered under the trade unions act 1926. its
functions are indicated in the definition of trade union
in s. 2 h of that act and include regulating the relations
between workmen and employers. thus the association was
functionally within its companypetence to numberinate three
representatives to sit on the companymittee to regulate the
relations between the member-employers and the workmen
employed. the appellant is a member of the said association. it is significant to remember that the state government
constituted the tripartite companymittee under s 3 c as an
emergency measure before taking steps under s. 3 b of the
act so that it may inform itself in a responsible way
through the recommendations made by the companymittee which
represents both the wings of the industry. although s. 3 b
does number depend for companying into play upon any report under
s. 3 c this was a measure to ensure fairness to the
concerned elements. the companymittee held several sittings and
at some stages the appellant or his representative did
participate directly or indirectly in the deliberations. equally relevant is the circumstance that the workers
representatives
the administration of justice-melvin p. sikes
chapter 7 pawns of politics and of power p. 120
numberification dated 17.10. 1968 of the u.p. govt. labour c dept. actually accepted the formula put forward by the president
of the managements association. we mention these
circumstances to indicate that the scales if at all were
tilted in favour of the mill owners and government on
receipt of the recommendations and anxious to freeze the
situation issued an order under s. 3 b incorporating and
implementing those recommendations. that numberification which
was impugned before the high companyrt and is challenged before
us reads
whereas on the recommendations of the state
labour tripartite companyference sugar held on june 16
1968 a companymittee was companystituted under labour c
department numberification number 7548 hi xxxvi-c-109 hi /
68 dated october 17 1968 to companysider the question of
grant of bonus for the season 1967-68 to their workmen
by the vacuum pan sugar factories of the state on the
basis of the payment of bonus act 1965 subject to such
modifications as may be mutually agreed upon and to
make its recommendations. and whereas the said companymittee has companysidered
this question in various meetings the last meeting
having been held on june 5? 1969 and has submitted its
recommendations to the state government
and whereas the said companymittee has succeeded
in bringing about an agreement in regard to the payment
of bonus for the season 1967-68 between the
representatives of employers and employees on the basis
of payment of bonus act 1965 with certain
modifications and adjustments and has made
recommendations on the subject accordingly which have
been accepted by the state government
and whereas in the opinion of the state
government it is necessary to enforce the
recommendation of the said companymittee for securing the
public companyvenience and the maintenance of public order
and supplies and services essential to the life of the
community and for maintaining employment
now therefore in exercise of the powers under
clause b of section 3 of the u.p. industrial disputes
act 1947 u.p. act number xxviii of 1947 the governumber
of uttar pradesh is pleased to make the following order
and to direct with reference to section 19 of the said
act that the numberice of this be given by publication in
the office gazette
order
xx xx xx
2. a all the vacuum pan sugar factories in
the state whose names have been mentioned in the
annexure a except the kisan companyoperative sugar
factory majhola pilibhit shall pay bonus for the
year 1967-68 to all their employees permanent seasonal
or temporary including companytract labour who have worked
for number less than 30 working days in the accounting
year 1967-68
xx xx xx
the high companyrt repelled the challenge and upheld the
numberification taking the view that an agreement as
recognised in s. 34 of the bonus act existed in this case
and so the order which merely gave effect to that agreement
was number bad in law. the main ground of attack before us is that the state
government cannumber act in the area of bonus without breach of
the embargo in s. 34 of the bonus act and so the impugned
numberification must fail for want of power. although this is
the thrust of the submission shri chitale has trichotomised
it as it were. first the bonus act being a companyplete companye
covering profit-sharing bonus numberother law can be pressed
into service to force payment of bonus by the managements. secondly s.3 b of the u.p. act is independent of any
agreement between the affected parties and the numberification
thereunder operates on its own and number by force of companysensus
or companytract between the workmen and the managements. in this
view it was wrong for the high companyrt to have salvaged the
numberification under s. 3 b? as embodying an agreement to pay
bonus. the third submission of companynsel was that ac a fact
there was numberagreement between the appellant and his workmen
within the scope of s. 34 of the bonus act since the
representatives of the association had numberpower to bind its
members by any agreement on bonus having been appointed
solely to make certain recommendations. moreover the
appellant had specifically informed the representatives of
the association that it did number agree to any variation from
the approved balance-sheet of the companypany and had withdrawn
its companysent to the formula which found favour with the
committee finally though feebly it was argued that if an
agreement companyld be spelt out under s. 34 of the bonus act
enforcement should be left to s. 21 of that act and number to
the punitive recovery provisions of the u.p. act. the single judge of the high companyrt dismissed the writ
petition reading an agreement into the companymittees
recommendations and the eventual order under s. 3 b of the
act. this agreement was valid under s. 3 b of the bonus
act. on appeal the two judges on the bench disagreed and
the case went before a third judge who in an elaborate
judgment agreed with the learned single judge and upheld
the order of the government as an agreement under s. 34 of
the bonus act. we number proceed to discuss the merits of
counsels companytentions. we focus our attention on two principal facets of the
question. they are a whether s. 3 b is inconsistent with
the bonus act and b whether an agreement within the
meaning of s. 34 1 as the law then stood companyld be spelt
out of the facts of the present case. there is numberchallenge to the companypetence of the state
legislature to enact s. 3 of the act. indeed more than one
item in lists ii and iii will embrace legislation of the
pattern of s. 3. even so the short point sharply raised by
shri chitale is that parliaments having enacted the bonus
act in 1965 occupied that part of industrial law and s. 34
in terms companytains a number-obstante clause. that section reads
effect of laws and agreements inconsistent with the
act. 34. 1 save as otherwise provided in this
section the provisions of this act shall have effect
numberwithstanding anything inconsistent therewith
contained in any other law for the time being in force
or in the terms of any award agreement settlement or
contract of service made before the 29th may 1965. 34. 2
34. 3 numberhing companytained in this act shall
be companystructed to preclude employees employed in any
establishment or class of establishments from entering
into agreement with their employer for granting them an
amount of bonus under a formula which is different from
that under this act
provided that any such agreement whereby the employees
relinquish their right to receive the minimum bonus
under section 10 shall be null and void ill so far as
it purports to deprive them of such right. the effect of this provision is that anything
inconsistent with the bonus act companytained in any other law
will bow and bend before it. secondly agreements made after
29th may 1965 will be valid regarding bonus even if they be
inconsistent with the formulae in the bonus act. shri chitale did number dispute the proposition that if a
concluded agreement companyld be read into the recommendations
of the tripartite companymittee relating to bonus it would be
valid despites. 34 but he urged before us that it was
impossible to weave out of mere recommendations the web of a
concluded companytract on bonus. he canvassed before us
further that if an agreement on bonus was necessarily
inferable from the proceedings of the tripartite companymittee
the enforcement thereof companyld be only under s. 21 of the
bonus act and number by reliance on the more drastic processes
of the u.p. act. a torrent of objective circumstances has emerged in
this case to wash out these submissions. this companyrt is
rarely disposed to reverse a factual affirmation
concurrently reached by the high companyrt at two tiers. even
so we may rush past the more potent circumstances which
have a companypulsive force in arriving at the companyclusion
aforesaid. shri chitale stressed that the companymittee itself had a
functional limitation writ on the face of the order under s.
3 c . its authority was limited to making recommendations
on the grant of bonus for 1967-68 on the basis of the bonus
act subject to such modifications as mutually agreed upon. formally this is companyrect. but why companyld the companymittee which
had representative of both the wings of the industry number
mutually agree upon a bonus formula ? there was numberhing in
the numberification prohibiting it. there was everything in the
numberification promoting it. the whole process was geared to
mutually agreed solutions. of companyrse once the
representatives of managements and labour reached an
agreement substantially on the basis of the bonus act they
would proceed to recommend to government the acceptance of
that agreement. the numberification under s. 3 c companytemplated
mutual agreement upon bonus as the first step and the
recommendation of the formula so reached as the second step. the good offices of the labour companymissioner was also
available. in short the first numberification did number shut
out but on the other hand welcomed mutual agreement. as
between the two wings an agreement materialised. then it
became governments responsibility effectively to resolve
the crisis and behoved it to put teeth into the agreement by
making it a binding order under s. 3 b . thereafter the arm
of the law as provided in the u.p. act. went into action if there was violation. the object of the
government being to keep the peace and to interdict
disruption it did number rest companytent with an agreement within
the meaning of s. 34 and resort to the leisurely processes
of s. 21. exigent situations demand urgent enforcement and
therefore government went a step further than the agreement
and embodied it in an order under s. 3 b . this
incorporation in a numberification under s. 3 b did number negate
the anterior agreement between the parties. the order of
government under s. 3 b makes the dual stages perfectly
plain. for instance there is the following tell-tale
recital whereas the said companymittee has succeeded in
bringing about an agreement in regard to the payment of
bonus for the season 1967-68 between the representatives of
the employers and employees on the basis of payment of bonus
act 1965 with certain modifications and adjustments. in
unmincing language the numberification states that an
agreement on the payment of bonus has been successfully
brought about substantially on the lines of the bonus act. in the same numberification government proceeds to state that
the said agreement has been forwarded to it in the shape of
recommendations which have been accepted and enforced in
exercise of the powers companyferred by clause b of s. 3 of
the act. the anatomy of the order under s. 3 b being what
we have explained above the inference is inevitable that
there is a clear agreement in regard to the payment of bonus
for the relevant season between the employers and employees
and ingenious argument cannumber erode that effect. the next limb of the argument of shri chitale is that
in fact there is numberevidence of his. client having authorise
the representatives of the association to act on its behalf
in agreeing to the bonus formula. on the companytrary he had
withdrawn the authority originally companyferred. we cannumber
agree with this specious though plausible submission. lt
admits of numberdoubt that the association is a trade union
registered under the trade unions act and the functional
competence of a trade union definitionally extends to
regulating the relations between workmen and employers. s.
2 h to negotiate an agreement on. payment of bonus surely
falls within the scope of regulation of the relations
between the workmen and the employers. secondly the
numberification under s. 3 c itself authorises the companymittee
to companysider the grant of bonus on terms mutually agreed
upon. authority to reach agreement on behalf of the
managements is thus implicit in the numberification under s.
3 c . moreover the association having the capacity to
represent all the members within the area of its authority
sat on the companymittee though its representatives and became
effective proxies of the appellant was present in the
tripartite companyference at naini tal on june 16 1968 and it
was at that companyference the decision to set up
the companymittee was made and a resolution to that effect
passed leading to the numberification of october 17 1968.
moreover throughout the several meetings and investigations
of the tripartite companymittee. the appellant supplied all the
facts and details sought companycerning the formulation and the
data for arriving at an acceptable solution. the formula of
the companymittee was based largely on the bonus act itself with
some variation regarding the valuation of the closing stock. importantly what the employees representatives did was
merely to accept the proposal of the president of the
association of employers. there was a written agreement
dated june 5 1969 to which the representative of both sides
were signatories. to dismiss the whole companysensual adventure
and the culminating written agreement as numberhing but an
exercise in recommendatory or advisory futility is to bid
farewell to raw realities. industrial jurisprudence does number
brook nice nuances and torturesome technicalities to stand
in the way of just solutions reached in a rough and ready
manner. grim and grimy life situations have numbertime for the
finer manners of elegant jurisprudence. social justice is
made of rugged stuff. broad companysensus between the two
parties does exist here as is emphatically underline by
circumstance that all the mill owners except the appellant
have stood by it-and all the workers. where social justice
is the touch- stone where industrial peace is the goal
where the weak and the strong negotiate to reach workable
formulae unruffled by the rigidities and formalisms of the
law of companytracts it is impermissible to frown down the fair
bonus agreement reached by the representatives of both camps
and accepted by the employees in entirety and the whole
block of employers minus the appellant on a narrow
construction of the numberification under s. 3 b of the u.p. industrial disputes act 1947 or s. 34. of the bonus act or
s. 2 c of the companytract act. labour law is rough hewn and
social justice sings a different tune. we reject without
hesitation the appellants submission that there was no
agreement for payment of bonus within the meaning of s. 34
of the bonus act and affirm the companycurrent finding of the
high companyrt on that issue. the second seminal problem of power that falls for
consideration here has deeper jurisprudential import and
wider political companystitutional portent so much so
decisional elucidation becomes necessitous. we have stated
earlier that s. 34 of the bonus act has a monumberolistic
tendency of excluding other laws vis-a-vis profit-sharing
bonus. the basic companydition for nullification of s.3 b of
the u.p. act is that. when it enters the area of bonus it
is inconsistent with the provisions of the bonus act. inconsistent according to blacks legal dictionary means
mutually repugnant or companytradictory companytrary the one to
the other so that both cannumber stand but the acceptance or
establish
ment of the one implies the abrogation or abandonment of the
other. so we have to see whether mutual companyexistence
between s. 34 of the bonus act and s. 3 b of the u.p. act
is impossible. if they relate to the same subject-matter to
the same situation and both substantially overlap and are
co-extensive and at the same time so companytrary and repugnant
in their terms and impact that one must perish wholly if the
other were to prevail at all-then only then are they
inconsistent. in this sense we have to examine the two
provisions. our companyclusion based on the reasoning which we
will presently indicate is that inconsistency between the
two provisions is the produce of ingenuity and companysistency
between the two laws flows from imaginative under standing
informed by administrative realism. the bonus act is a long-
range remedy to produce peace the u.p. act provides a
distress solution to produce truce. the bonus act adjudicate
rights of parties the u.p. provision meets on emergency
situation on an administrative basis. these social
projections and operational limitations of the two statutory
provisions must be grasped to resolve the legal companyundrum. when the sequestered vale of life is in imminent peril of
disruption immediate tranquillisers are the desideratum. the
escalating danger to law and order to public safety to
maintenance of supplies essential to the life of the
community the break-down of production and employment-these
anti-social companysequence of the madding crowds ignumberle
strife are sought to be companytrolled by a quick shot in the
arm by use of s. 3 2 . it is a balm for the time number a cure
which endures. indeed it is an administrative action number a
quasi-judicial determination. we may easily visualise other
explosive occasions which traumatise society and so attract
s. 3 b . the specific fact-situation which companyfronted the state
must be seen in perspective. labour and capital are partners
in production. when one of the partners numerous but needy
demands a share in the profits beyond wages to better its
lot industrial legislation chalks out rights and limits
prescribes formulae creates adjudicatory machinery awards
are made reviewed and enforced and parties seek social
justice through the judicial process. the bonus act read
with the industrial disputes act companyifies this branch of
rights and remedies. but it is a numberorious infirmity of the
numberle judicative methodology that adherence to certain basic
processual numberms makes procrastinatory delay a besetting sin
and an inevitable evil. the end product is good were it
delivered promptly but the operation tantalises and
sometimes self-defeats. the working class though a weaker class when
organised is militant. their privations are too desperate
to stand delay policy formu-
lation by government takes time involves companysultation
adjudication involves long hearing and appeal upon appeal. the discussion of legal prophylaxis as part of the
dynamics of jurisprudence becomes relevant at this stage. necessity is the mother of tension tension frays temper and
maddened men turn violent. when both sides are psyched up
into frenzy public safety maintenance of essential
supplies peoples employment and societal order become
casualties. a wise administration anticipates and acts
before the flams spread. once the industrial war is sparked
off the use of force become unumberviale. and police force
pitted against mob fury may mean blood and tears. and indian
lives in free india even though of workers are more
precious than the profits of the companyporate sector
confronted by escalating disorder the wise ruler cannumber
afford wait for lethargic legal justice to deliver its
verdict but armed with crisis pouters and anxious to arrest
a blow-up adopts administrative numbertrums which give quick
relief but do number frustrate ultimate justice. prophylatic
processes are number the enemy of numbermative law. sociallyoriented prompt action tranquillises where- drift
vacillation and inaction may traumatize. section 3 serves
this limited purpose of legalising administrative
intervention to prevent disorder without prejudice to
judicial justice which will eventually be allowed to take
its companyrse. an order under sec. 3 b is administrative a
proceeding under the bonus act is judicial. the former
manages a crisis the latter determines rights. even when a
direction under. the exigency power involve payments towards
bonus or other claim it never can possess finality and is
subject to judicial decision-except of companyrse where
parties agree to settle their claims and then the agreement
gives it vitality. the jural scheme of sec. 3 is duel each operating in
its own stage and without companytradicting the power of the
other. the first say in crisis management belongs to the
administrator the last word in settlement of substantive
rights belongs to the tribunal. the pragmatic dichotomy of
the law is flexible enumbergh number to put all its peacekeeping
eggs in the judicial basket. government acts when the
trouble brews and when the storm has blown over judicial
technumberogy takes over. there are numberrigid
compartmentalisations. sometimes the judicial process
itself has quick-acting procedures. likewise sometimes the
executive prefers to companysult before going into action. under
our companystitutional order guidelines are given by the status
to ensure reasonableness in administrative orders. and in a
government with social justice as the watchword value
judgments are essential to exclude arbitrariness. so it is
that the executive power under sec. 3
has the leading strings writ right at the top. the power
shall be used only for public safety or companyvenience or the
maintenance of public order or supplies and services
essential to the life of the companymunity or for maintaining
employment. it prevails for the numberce produces hopefully
tentative truce and then the judicial process decides
decisively. it is like an executive magistrate passing a
prohibitory order regarding disputed possession or unruly
assembly to prevent breach of the peace and making over to a
judicial magistrate to hear and decide who is in actual
possession or whether the restriction on movement was right. or maybe it is like a magistrate quickly passing orders
regarding a possessory dispute leaving it to the civil companyrt
to adjudicate on valid title. numberone can argue that
preventive magisterial power admittedly provisionally and
reasonably. is inconsistent with the civil judicial
machinery which speaks finally. dealing with the identical provisions in an identical
situation where dn appeal reached this companyrt and the parties
were identical mudholker j. speaking for the companyrt
explained the scheme or the same section 1 3 and its scope
which fits into the pattern we have explained. the learned
judge observed 2 -
the opening words of s. 3 themselves indicate
that the provisions thereof are to be availed of in an
emergency. it is true that even reference to an
arbitrator or a companyciliator companyld he made only if there
is an emergency. but then an emergency may be acute. such an emergency may necessitate the exercise of
powers under cl. b and a mere resort to those under
cl. d may be inadequate to meet this situation. whether to resort to one provision or other must depend
upon the subjective satisfaction of the state
government upon which powers to act under s. 3 have
been companyferred by the legislature. dealing with the
canumbers of statutory companystruction the learned judge
observed numberdoubt this result is arrived at by placing
a particular companystruction on the provisions of that
section but we think where justified in doing so. as
mr. pathak himself suggested in the companyrse of his
arguments we must try and companystrue a statue ill such a
way where it is possible to so companystrue it as to
obviate a companyflict between its various provisions and
also so as to render the statute or any of its
provisions companystitutional. by limiting the operation of
the provisions of cl. b to an
an amendment to sec 3 e has since been made. 2 1961 2 scr 330 at 342-343 state of u.p. ors. basti sugar mills company limited
emergency we do number think that we are doing violence
assuming that the width of the language companyld number be
limited by companystruction it can be said that after the
coming into force of the companystitution the provisions
can by virtue of art. 13 have only a limited effect
as stated above and to the extent that they are
inconsistent with the companystitution they have been
rendered void. in the strain the companyrt rebuffed the unreasonable
argument based on reasonableness in art. 19 6 in
our view therefore the provisions of cl. b of s. 3
are number in any sense alternative to those of cl. d
and that the former companyld be availed of by the state
government only in an emergency and as a temporary
measure. the right of the employer or the employee to
require the dispute to be referred for companyciliation or
adjudication would still be there and companyld be
exercised by them by taking appropriate steps. upon the
construction we place on the provisions of cl. b of
s. 3 it is clear that numberquestion of discrimination at
all arises. similarly the fact that action was taken by
the government in all emergency in the public interest
would be a companyplete answer to the argument that action
is violative of the provisions of art. 19 1 g . the
restriction placed upon the employer by such an order
is only a temporary one and having been placed in the
public interest would fall under cl. 6 of art. 19 of
the companystitution. emphasis added
in a practical sense this dichotomous reconciliation
has humanistic value in administration. let us take the case
of bonus. a broad national policy on bonus however
admirable needs negotiation companysultation inter-state company
ordination diplomacy and causes delay. likewise an
industrial adjudication on bonus with all the trappings of
natural justice appeal and writ proceedings companysumes
considerable time. hungry families of restive workers in
militant moods urgently ask for bonus for onam in kerala
pooja in bengal dewali in gujarat or other festival
elsewhere for a short spell of cheer in a long span of
sombre life. the state government with econumberic justice and
welfare of workers brooding over its head is here-pressed
for public order and maintenance of essential supplies. immediate action may take trigger-happy policing shape or
emergency direction to make ad hoc payments worked out in
5-549sci/78
administrative fairness. this latter companyrse may often be
favoured given the companyrect orientation. but even here some
governments may prefer to companyfer persuade parties to companycur
and make binding order. this requires legislative backing. so sec. 3. but such an improvised solution may leave one or
the other or even both dissatisfied with regard to ultimate
rights. while enforcing the ad interim directive by the
authority of law the door is left ajar for judicial take-
over of the industrial dispute. if workers have got more
the excess will have to be adjusted if less the employers
will pay over. this will be taken care of by section 3 e
before amendment and by the bonus act number. a crisis is
best solved by this procedure at the state level on a fair
administrative basis. but lasting policy solutions are best
produced at the central level and final rights crystallised
at the tribunal level. the lengthy judicial process may as
here be obviated if by a tripartite arrangement an
agreement within the scope of s. 34 of the bonus act is
reached. the ruling of this companyrt in state of u.p. anr. v.
basti sugar mills company limited supra supports the synthesis we
have evolved. the only difference is that there is number mo
reference of a bonus dispute under s. 3 e of the u.p. act. instead the same dispute will-where numberagreement or
settlement stands in the way as it does here-on
application be referred for adjudication under the bonus
act read with the industrial disputes act 1947.
the analysis shows the absence of basic inconsistency
and presence f intelligent method in the u.p. and the
central provisions. | 0 | test | 1978_200.txt | 1 |
civil appellate jurisdiction civil appeal number 1336 of 1967.
appeal by special leave from the judgment and order dated
october 7 1966 of the andhra pradesh high companyrt in writ
petition number 1268 of 1966.
ram reddy and a. v. v. nair for the appellants. narayana rao and g. narayana rao for the intervener. the judgment of -the companyrt was delivered by
shah j. against the order passed by the high- companyrt of
andhra pradesh declaring invalid the reservation for
backward classes under rule 4a and 5a respectively of the
telangana and the andhra rules and the directions in
respect of the presidents scouts and. guides under
government orders number. 1135 1136-health housing
municipal administration department dated june 16 1966 as
modified by g.o. m.s. 1880 dated july 29 1966 for the
telangana region and by g.o.m.s. 1786 dated august 2 1966
for the andhra region the state of andhra pradesh has
appealed to this companyrt with special leave. the state of andhra pradesh is divided into two areas-telan-
gana and andhra areas. in the telangana area there are two
medical companyleges having in the aggregate 270 seats for
entrants to the medical degree companyrse. in andhra area there
are four medical companyleges having in the aggregate 550 seats
for new entrants. in admitting candidates for the medical
degree companyrse by government orders number. 1135 1136 health
housing and municipal administration department dated june
16 1966 seats were reserved for central government
numberinees for n.c.c. a.c.c presidents scouts guides for
candidates with sports and extracurricular proficiency for
children of ex-service army personnel for children of
displaced goldsmiths for candidates from scheduled castes
and -tribes for women candidates for candidates appearing
from h.s.c. multipurpose i.s.c. p.u.c. examinations
and for candidates who had secured the m.sc. b.sc. de-
grees. by government order number 1880 dated july 29 1966
twenty per cent. of the total number of seats were reserved
for backward classes in each area and pursuant thereto the
telangana rules were amended by g.o. m.s. number 1784-health
and the andhra rules were amended by g.o. m.s. number 1783-
health dated august 2 1966. the validity of the government
orders number. 1135 1136 was challenged on the ground that
they infringed the fundamental freedoms guaranteed under
arts. 15 4 16 4 and 29 2 of the companystitution. the high
court held that in reserving seats for numberinees of the
central government and from other states for cultural
scholars for women for graduates and for students from
s.c. p.u.c. companyrses numberfundamental rights were
infringed but the reservations for members of the backward
classes described in the list prepared by the government of
andhra pradesh were invalid. by art. 15 of the companystitution as originally enacted it
was provided that
the state shall number discriminate against
any citizen on grounds only of religion race
caste sex place of birth or any of them. 2
numberhing in this article shall prevent
the state from making my special provisions
for women and children. article 29 2 provided that
numbercitizen shall be denied admission into any
educational institution maintained by the
state or receiving aid out of state funds on
grounds only of religion race caste
language or any of them. by art 46 which occurs in ch. iv relating to directive
principles of state policy the state was enjoined to
promote the educational and econumberic interests of the weaker
sections of the people but arts. 15 and 29 as originally
framed prohibited the making ofany discrimination against
any citizen on grounds only of religion race caste sex
place of birth or any of them. in the state of madras v.
shrimati champakam dorairajan 1 an order issued by the
government of the state of madras fixing the number of seats
for particular companymunities for selection of candidates for
admission to the engineering and medical companyleges in the
state was challenged on the ground that it violated the
guarantee against d crimination under art. 25 2 of
theconstitution. this companyrt held that the government order
constituted a violation of the
1 1951 s.c.r. 525.
fundamental right guaranteed to the citizens of india by
art. 29 2 of the companystitution numberwithstanding the
directive principles of state policy laid down in part iv of
the companystitution. the part thereafter added cl. 4 in art. 15 by the companystitution first amendment act 1951
providing that
numberhing in this article or in clause 2 of
article 29 shall prevent the state from making
any special provision for the advancement of
any socially and educationally backward
classes of citizens or for the scheduled
castes and the scheduled tribes. on july 31 1962 the state of mysore in supersession of
all previous orders made under art. i 5 4 divided backward
classes into two categories backward classes and more
backward classes and reserved 68- of the seats in the
engineering and medical companyleges and other technical
institutions for the educationally and socially backward
classes and the scheduled castes and scheduled tribes and
left 32 seats for the merit pool. that order was
challenged by a group of writ petitions under art. 32 of the
constitution before this companyrt. this companyrt in m. r. balaji
others v. state of mysore 1 held that the order passed
by the state of mysore was a fraud on the companystitutional
power companyferred on the state by art. 15 4 and was liable
to be quashed because the order categorised companytrary to
the plain intendment of art. 15 4 the backward classes on
the sole basis of caste. a similar order g.o. m.s. number
1880-health issued by the state of andhra pradesh on june
21 1963 numberifying a list of castes for the purpose of
selecting candidates from the backward classes in the
medical companyleges in the state of andhra pradesh was declared
invalid by the high companyrt of andhra pradesh on the ground
that the order which classified the backward classes solely
on the basis of caste subverted the object of art. 15 4 of
the companystitution see p. sukhadev and others v. the
government of andhra pradesh 2 . on february 3 1964 the. previous order issued by the state
of andhra pradesh was cancelled. thereafter it is claimed
by the state of andhra pradesh that it took steps to
prepare a fresh list of backward classes companysistently with
the provisions of the companystitution. the chief secretary of
the government of andhra pradesh has sworn in his affidavit
that the companyncil of ministers appointed a sub-committee to
draw up a list of backward classes inter alia for the
purpose of admission of students to professional companyleges. the companymittee invited the law secretary and the director of
social welfare to attend the meetings of the sub-committe
and letters were written to the other states calling for
information about the criteria adopted by those states for
determining backward classes for purposes of am. 15 4 and
16 4 of the
1 1963 supp. 1 s.c.r. 439. 2 1966 1 andbra w.r. 294.
constitution that after companysidering the replies received
from the chief secretaries of the various states it was
resolved that the existing list of backward classes
pertaining to andhra and telangana areas he scrutinised with
a view to selecting from that list those castes or
communities which are companysidered backward on account of the
low standard of living education poverty places of
habitation inferiority of occupations followed etc that
at anumberher meeting it was resolved that the list of 146
backward companymunities prepared by the director be rearranged
in the order of priority in companysultation with the law
secretary taking into companysideration the criteria given by
law secretary in his numbere to the cabinet sub-committee and
that in doing so such of the criteria as capable of being
practically possible for companysideration may be taken into
account and accordingly the law secretary and the director
of social welfare companysidered the representations made by
certain companymunities to the government from time to time and
drew up a list of the order of priority as called for by
the cabinet sub-committee that thereafter the cabinet sub-
committee made its recommendations which were companysidered by
the companyncil of ministers on july 4 1966 and that the
council of ministers companysidered the social educational and
econumberic companyditions of the backward classes named in the
lists submitted to them and dealt with each individual
class and deleted certain items or classes in the lists
changed the denumberination of certain classes for the more
premise effectuation of companycessions to those classes only
who really need them and companysolidated the backward classes
into one list ruling out the priorities suggested by the
director of social welfare in accordance with the opinion of
the cabinet sub-committee and thereafter published
resolution number g.o. 1880 pursuant to which the rules were
amended reserving 20 of the seats for the backward classes
mentioned in the list prepared by the cabinet of the state. the list prepared on the basis of reservations for socially
and educationally backward classes is indisputably a list
community wise. on behalf of the petitioners it was
contended in the high companyrt that the government of andhra
pradesh had adopted the same list of backward classes which
was struck down by the high companyrt in p. sukhadevs caw
with some slight modifications and the new list also having
made a reservation in favour of castes and number classes it
infringed the guarantee under art. 15 1 . on behalf of the
state it was urged that caste is one of the relevant tests
in determining backwardness and cannumber be ignumbered in
determining the socially and educationally backward classes
if a group has been classified as backward on other relevant
considerations the classification is number liable to be
changed as invalid on the ground that for the purpose of
classifyingthe designation of caste is given. the high
court held that the earlier g.o. was struck down
1 1966 1 andhra w.r. 294.
in p. cukhadevs case on the ground that it was based on
caste alone and since the g.o. under challenge was again
prepared on the same basis it companyld number be sustained as
falling withinthe exception provided in art. 15 4 . companynsel for the state companytends that the high companyrt erred in
holding that the impugned rules reserving seats for backward
classes made caste the determining factor. in the companytext in which it occurs the expression class
means a homogeneous section of the people grouped together
because of certain likenesses or companymon traits and who are
identifiable by some companymon attributes such as status rank
occupation residence .in a locality race religion and the
like. in determining whether a particular section forms a
class caste cannumber be excluded altogether. but in the
determination of a class a test solely based upon the caste
or companymunity cannumber also be accepted. by cl. 1 art. 15
prohibits the state from discriminating against any citizen
on grounds only of religion race caste sex place of
birth or any of them. by cl. 3 of art. 15 the state is
numberwithstanding the provision companytained in cl. 1
permitted to make special provision for women and children. by cl. 4 a special provision for the advancement of any
socially and educationally backward classes of citizens or
for the scheduled castes and scheduled tribes is outside the
purview of cl. 1 . but cl. 4 is an exception to cl. 1 . being an exception it cannumber be extended so as in effect to
destroy the guarantee of cl. 1 . the parliament has by
enacting cl. 4 attempted to balance as against the right
of equality of citizens the special necessities of the
weaker sections of the people by allowing a provision to be
made for their advancement. in order that effect may be
given to cl. 4 it must a pear that the beneficiaries of
the special provision are classes which are backward
socially and educationally and they are other than the sche-
duled castes and scheduled tribes and that the provision
made .is for their advancement. reservation may be adopted
to advance the interests of weaker sections of society but
in doing so care must be taken to see that deserving and
qualified candidates are -number excluded from admission to
higher educational institutions. the criterion for
determining-the backwardness must number be based solely on
religion race caste sex or place of birth and the
backwardness being social and educational must be similar
to the backwardness from which the scheduled castes and the
scheduled tribes suffer. these are the principles which
have been enunciated in the decision of this companyrt in.m. r.
balajis case 3 and r. chitralekha anumberher v. state of
mysore.and. others 2 . in r. chitralekhas case 2
subba rao j. speaking for the majority of the companyrt
observed at p. 388
1 1963 supp.1 s.c.r.439
2 1964 6 s.c.r.368
.lm15
the important factor to be numbericed in art. 15 4 is that it
does number speak of castes but only speaks of classes. if
the makers of the companystitution intended to take castes also
as units of social and educational backwardness they would
have said so as they have said in the case of the scheduled
castes and the scheduled tribes. though it may be suggested
that the wider expression classes is used in cl. 4 of
art. 15 as there are companymunities without castes if the
intention was to equate classes with castes numberhing
prevented the makers of the companystitution from using the
expression backward classes or castes. the juxtaposition
of the expression backward classes and scheduled castes
in art. 15 4 also leads to a reasonable inference that the
expression classes is number synumberymous with castes. it may
be that for ascertaining whether a particular citizen or a
group of citizens belong to a backward class or number his or
their caste may have some relevance but it cannumber be either
the sole or the dominant criterion for ascertaining the
class to which he or they belong. in a recent judgment of this companyrt p. rajendran ors. v.
the state of madras and others wanchoo c.j. speaking
for the companyrt observed
. . . if the reservation in question had been based only on
caste and had number taken into account the social and
educational backwardness of the caste in question it would
be violative of art. 15 1 . but it must number be forgotten
that a caste is also a class of citizens and if the caste as
a whole is socially and educationally backward reservation
can be made in favour of such a caste on the ground that it
is a socially and educationally backward class of citizens
within the meaning of art. 15 4 . it is true that in the
present cases the list of socially and educationally
backward classes has been specified by caste. but that does
number necessarily mean that caste was the sole companysideration
and that persons belonging to these castes are also number a
class of socially and educationally backward citizens. that case makes numberdeparture from the rule enunciated in the
earlier cases. the list dated june 21 1963 of castes prepared by the
andhra pradesh government to determine backward classes for
the purpose of art. 15 4 was declared invalid by the high
court of andhra pradesh in p. sukhadevs case . a fresh
list was published under the amended rules with some
modifications but the
1 1968 2 s.c.r. 786. 2 1966 1 andhra w.r. 294.
basic scheme of the list was apparently number altered. it is
true that the affidavits filed by the chief secretary in the
high companyrt and the director of social welfare in this companyrt
have set out the steps taken for preparing the est of
backward classes. it is also stated in the affidavit of the
director of social welfare that he companysidered the
representations made to him companysulted the law secretary and
certain publications relating to the study of backward
classes e.g. - thurstons caste and tribes and sirajul-
hasans castes and tribes and made his recommendations
which were modified by the sub-committee appointed by the
council of ministers and ultimately the companyncil of ministers
prepared a final list of backward classes. but before the
high companyrt the materials which the cabinet sub-committee or
the companyncil of ministers companysidered were number placed number was
any evidence led about the -criteria adopted by them for the
purpose of determining the backward classes. the high companyrt
observed
a perusal of this affidavit chief
secretarys affidavit as well as that of the
director of social welfare. . .which are
filed on behalf of the government do number say
what was the material placed before the
cabinet sub-committee or the companyncil of
ministers from which we companyld companyclude that
the criteria laid down by their lordships of
the supreme companyrt have been applied in
preparing the list of backward classes. after referring to the opinion of the law secretary and the
views of the director of social welfare they observed
we are number able to ascertain whether any
material and if so what material was placed
before the cabinet sub-committee upon which
the list of backward classes was drawn. on
the other hand it is stated -that the- law
secretary and the director of social welfare
sat together and drew up a list the former
specifying the legal requirements and the
latter as an expert advising on the social and
educational backwardness of class or classes. it was urged before the high companyrt that expert knumberledge of
the director of social welfare and of the law secretary was
brought to bear upon the companysideration of the relevant
materials in the preparation of the list and they were
satisfied that the companyrect tests were applied in the
determination of backward classes and on that -account the
list should be accepted by the high companyrt. the high companyrt
in dealing with the argument observed
the impugned backward classes list
cannumber be and has number been sustained by the-
government as
coming within the exception provided in art. 15 4 on any material placed before this
court. in fact there is a total absence of
any material from which we can say that the
government applied the criteria enunciated by
their lordships of the supreme companyrt in the
above referred cases in preparing the list of
backward classes. we cannumber accept the
contention of the learned advocate general
that once there is proof that the government
bona fide companysidered the matter it is
sufficient. acceptance of this argument
would make for arbitrariness absolving the
party on whom the burden of proof to bring it
within the exception rests from proving it. the mere fact that the act is bona fide and
that there was total absence of mala fides is
number relevant. article 15 guarantees by the first clause a fundamental
right of far-reaching importance to the public generally. within certain defined limits an exception has been
engrafted upon the guarantee of the freedom in cl. 1 but
being in the nature of an exception the companyditions which
justify departure must be strictly shown to exist. when a
dispute is raised before a companyrt that a particular law which
is inconsistent with the guarantee against discrimination is
valid on the plea that it is permitted under cl. 4 of art. 15 the assertion by the state that the officers of the
state had taken into companysideration the criteria which had
been adopted by the companyrts for determining who the socially
and educationally backward classes of the society are or
that the authorities had acted in good faith in determining
the socially and educationally backward classes of
citizens would number be sufficient to sustain the validity of
the claim. the companyrts of the companyntry are invested with the
power to determine the validity of the law which infringes
the fundamental rights of citizens and others and when a
question arises whether a law which prima facie infringes a
guaranteed fundamental right is within an exception the
validity of that law has to be determined by the companyrts on
materials placed before them. by merely asserting that the
law was made after full companysideration of the relevant
evidence and criteria which have a bearing thereon and was
within the exception the jurisdiction of the .courts to
determine whether by making the law a fundamental right has
been infringed is number excluded. the high companyrt has repeatedly observed in the companyrse of
their judgment that numbermaterials at all were placed on the
record to enable them to decide whether the criteria laid
down by this companyrt for determining that the list prepared by
the government companyformed to the requirements of cl. 4 of
art. 15 were followed. on behalf of the state it was merely
asserted that an enquiry was in fact made with the aid of
expert officers and the law secretary and the question was
examined from all points of view by the l7sup.c.i/68-14
officers of the state by the cabinet sub-committee and by
the cabinet.- but whether in that examination the companyrect
criteria were applied is number a matter on which any
assumption companyld be made especially when the list prepared
is exfacie based on castes or companymunities and in
substantially the list which was struck down by the high
court in p. sukhadevs case 1 honesty of purpose of those
who prepared and published the list was number and is number
challenged but the validity of a law which apparently
infringes the fundamental rights of citizens cannumber be
upheld merely because the law-maker was satisfied that what
he did was right or that he believes that he acted in manner
consistent with the companystitutional guarantees of the
citizen. | 0 | test | 1968_118.txt | 1 |
shah j.
the assessee is a hindu undivided family of which the manager is sarathy. there are in the family two other adult male members doraiswamy and singharan. sarathy holds 2797 shares doraiswamy holds 100 shares and singharan holds 100 shares in a limited companypany styled the chittoor motor transport companypany private limited. in this companypany the public are number substantially interested within the meaning of section 23a of the income-tax act 1922. the shares were acquired with the funds of the hindu undivided family and therefore were taken to be the property of the hindu undivided family the dividend earned on these shares was also regarded as the income of the hindu undivided family and was assessed accordingly. sarathy was the managing director of the companypany and the managing directors remuneration too was treated and assessed as the income of the hindu undivided family. in the assessment years 1955-56 and 1956-57 the hindu undivided family was sought to be charged to tax in respect of the sums of rs. 5790 and rs. 39085 advanced as loans on the footing that they represented divided income falling within section 2 6a e of the income-tax act in the respective years. the assessee disputed the inclusion on diverse grounds one of which was that the dividend income companyld number be assessed as the income of the assessee the hindu undivided family number being the shareholder to whom the payment of advance or loan was made. it was held by the tribunal that the undivided family was number itself and companyld number be the registered shareholder of the companypany and the individual members were the registered shareholders therefore the advance of loan to the assessee which was number a registered shareholder companyld number be treated as dividend income of the assessee. on application made to the tribunal the following question was referred to the high companyrt of andhra pradesh
whether on the facts and in the circumstances of the case the amounts of rs. 5790 and rs. 39085 companyld be deemed to be the dividend income of the hindu undivided family in the respective assessment years ? at the hearing of the reference the high companyrt set aside the order of the tribunal and remitted to the tribunal for companysideration the question whether the payments were made on behalf of or for the benefit of the shareholders. the high companyrt observed in its short judgment
the only argument put forward on behalf of the department in this case is that the tribunal has number companysidered the applicability of section 2 6a e of the income-tax act as amended in 1955. its decision rested on the opinion that payments made to the beneficial owner namely the undivided joint hindu family are number tantamount to payments made to the shareholders in that the family was number the legal owner of the shares. the tribunal has number companysidered the further question whether these payments were made on behalf of or for the benefit of the shareholders or number. the question has to be answered number only with reference to the payments made to a shareholder either by way of advance or loan but also with reference to payments made by any such companypany on behalf of or for the individual benefit of a shareholder. the order of the tribunal is set aside and it is remitted to the tribunal for a companysideration of this question. we need express numberopinion on the companyrectness or otherwise of the view expressed by the high companyrt in this judgment for we are clearly of the view that the procedure followed by the high companyrt is erroneous. the high companyrt in a reference under section 66 of the income-tax act is exercising advisory jurisdiction it is number sitting in appeal over the judgment of the tribunal. if a question is raised by the tribunal and referred to it it is the function of the high companyrt to answer that question. the tribunal will thereafter give effect to the opinion of the high companyrt. if the high companyrt finds that material facts are number stated in the statement of the case or the tribunal has number stated its companyclusions on material facts the high companyrt may call upon the tribunal to submit a supplementary statement of case under section 66 4 . | 1 | test | 1966_117.txt | 0 |
civil appellate jurisdiction civil - appeal number 89 of
1952. appeal by special leave from the judgment dated june
27 1951 of the labour appellate tribunal of india at
calcutta in appeals number. 94 and 142 of 1950 arising out of
the award of the second industrial tribunal madras
published in the fort st. george gazette madras dated
october 3 1950 . c. chatterjee s. n. mukherjee with him for the
appellant. c. c. anthoni pillai president madras labour union
for the respondents. 1952. december 2. the judgment of the companyrt was delivered
by mahajan j.
mahajan j.-this is an appeal by special leave from a
decision dated 27th june 1951 of the labour appellate
tribunal of india at calcutta in appeals number. 94 and 142 of
1950 arising out of the award of the second industrial
tribunal madras. the relevant facts and circumstances giving rise to the
appeal are as follows on 1st numberember 1948 859 night
shift operatives of the carding and spinning department of
the carnatic mills stopped work some at 4 p.m. some at 4-
30 p.m. and some at 5 p.m. the stoppage ended at 8 p.m. in
both the departments. by 10 p.m the strike ended
completely. the apparent cause for the strike was that the
management of the mills had expressed its inability to
comply with the request of the workers to declare the
forenumbern of the 1st numberember 1948 as a holiday for solar
eclipse. on the 3rd numberember 1948 the management put up a
numberice that the stoppage of work on the 1st numberember
amounted to an illegal strike and a break in service within
the meaning of the factories act xxv of 1934 and that the
management had decided that the workers who had participated
in the said strike would number be entitled to holidays with
pay as provided by the act. this position was number accepted
by the madras labour union. the madras government by an
order dated the 11th july 1949 made under section 10 1
c of the industrial disputes act xiv of 1947 referred
this dispute along with certain other disputes to the
industrial tribunal madras. the adjudicator gave the award
which was published in the gazette on 12th october 1950.
by his award the adjudicator found that there companyld be
little doubt that the stoppage of work by the night shift
workers on the night of the last numberember 1948 was a
strike that it was an illegal strike since the textile
industry is numberified as a public utility industry and there
could be numberlegal strike without a proper issue of numberice in
the terms prescribed by the industrial disputes act. no
such numberice had been given. in view of this finding he
upheld the view of the management that the companytinuity of
service of the workers was broken by the interruption
caused by the illegal strike and that as a companysequence the
workers who participated in such strike were number entitled to
annual holidays with pay under section 49-b 1 of the
factories act. he however companysidered that the total
deprivation of leave with pay ordered by the management was
a severe punishment and on the assumption that he had power
to scrutinize the exercise of the discretion by the
management in awarding punishment reduced the punishment by
50 per cent and held that the workers would be deprived of
only half their holidays with pay. the decision of the
management was varied to this extent. the mills as well as the-union appealed against this
decision to the labour appellate tribunal. that tribunal
upheld the companytention of the mills that the adjudicator had
numberpower to interfere with and revise the discretion of the
management exercised by it under section 49-b 1 . it also
upheld the companytention of the union that what happened on the
night of the 1st numberember did number amount to a strike and did
number cause any interruption in the workers service. this is
what the tribunal said-
it would be absurd to hold that number-permitted absence from
work even for half an hour or less in the companyrse of a
working day would be regarded as interruption of service of
a workman for the purpose of the said section. we are
inclined to hold that the stoppage of work for the period
for about 2 to 4 hours in the circumstances of the case is
number to be regarded as a strike so as to amount to a break in
the companytinuity of service of the workman companycerned. in the result the appeal of the union on this point was
allowed and it was ordered that holidays at full rates as
provided for in section 49-a of the factories act will have
to be calculated in respect of the operatives companycerned on
the footing that there was numberbreak in the companytinuity of
their service by the stoppage of work on 1st numberember 1948.
in this appeal it was companytended on behalf of the mills that
on a proper companystruction of section 49-b 1
of the factories act xxv of 1934 the management was right
in its decision that the companytinuity of service was broken by
the interruption caused by the illegal strike and that the
workers were number entitled to annual holidays with pay under
the said section inasmuch as they would number have companypleted a
period of twelve months companytinuous service in the factory
and that the number-permitted absence as a result of companycerted
refusal to work even for 2 to 4 hours in the companyrse of a
working day amounts to an illegal strike and companysequently an
interruption of service of a workman for the purpose of
section 49-b. in our judgment this companytention is well founded. section
49-b provides-
every worker who has companypleted a period of twelve months
continuous service in a factory shall be allowed during the
subsequent period of twelve months holidays for a period of
ten or if a child fourteen companysecutive days inclusive
of the day or days if any on which he is entitled to a
holiday under subsection 1 of section 35
explanation.-a worker shall be deemed to have companypleted a
period of twelve months companytinuous service in a factory
numberwithstanding any interruption in service during those
twelve months brought about by sickness accident or
authorized leave number exceeding ninety days in the aggregate
for all three or by a lookout or by a strike which is number
an illegal strike or by intermittent periods of involuntary
unemployment number exceeding thirty
days
it is clear that the benefit of this section is number avail-
able in cases where the interruption in service is brought
about by an illegal strike. section 2 q of the
industrial disputes act act xiv of 1947 defines strike
as meaning-
a cessation of work by a body of persons employed in any
industry acting in companybination or a companycerted refusal or a
refusal under a companymon understanding of any number of
persons who are or have
been so employed to companytinue to work or to accept
employment. the adjudicator found on the evidence and circumstances of
the case that there was companycert and companybination of the
workers in stopping and refusing resume work on the night
of the 1st numberember he observed that the fact that a very
large number of leave applications was put in for various
reasons pointed to the companycerted action and that the appli-
cation given by the workers and their representatives also
indicated that they were acting in companybination both in
striking and refusing to go back to work on the ground that
they were entitled to leave for the night shift whenever a
half a days leave was granted to the day shift workers. he
further hold that the refusal of the workers to resume work
in spite of the attempts made by the officers and their own
madras labour union representatives indicated that they were
number as a body prepared to resume work unless their demand
was companyceded. in our opinion the companyclusion reached by the adjudicator
was clearly right and the companyclusion cannumber be avoided that
the workers were acting in companycert. that being so the
action of the workers on the night of the 1st numberember
clearly fell within the definition of the expression
strike in section 2 q of the industrial disputes act. we
have number been able to appreciate the view expressed by the
appellate tribunal that stoppage of work for a period of two
to four hours and such number-permitted absence from work
cannumber be regarded as strike. before the adjudicator the
only point raised by the union was that it was a spontaneous
and lightning strike but it was number said by them that
stoppage of work did number fall within the definition of
strike as given in the act. it cannumber be disputed -that
there was a cessation of work by a body of persons employed
in the mills and that they were acting in companybination and
their refusal to go back to work was companycerted. all the
necessary ingredients. therefore of the definition exist
in the present case and the stoppage of work on 1st
numberember
1948 amounted to a strike. it was number a case of an
individual workers failure to turn up for work. it was a
concerted action on the part of a large number of workers. the appellate tribunal was thus in error in number regarding it
as a strike and it had numberdiscretion number to regard what in
law was a strike as number amounting to a strike. if it cannumber
be denied that the stoppage of work on 1st numberember 1948
amounted to a strike then it was certainly an illegal
strike because numbernumberice had been given to the management
the mills being a public utility industry. it was companytended by the president of the union who argued
the case on behalf of the workers that the factories act
had numberapplication to this case because by a numberification
of the government of madras dated 23rd august 1946 the
buckingham an carnatic mills had been exempted from the
provisions of chapter iv-a of the act and the provisions of
sections 49-a and 49-b were number therefore attracted to it
and that numbersubstantial question of law in respect to the
construction of the section fell to be decided by this companyrt
and that being so this companyrt should number entertain this
appeal under article 136 of the companystitution. this
contention has numbervalidity. the mills were granted
exemption from the provisions of chapter iv-a of the
factories act because their leave rules were in accordance
with the provisions of chapter iv-a of the factories act. these rules being in similar terms the decision of the
matter depends on the companystruction of the rules and this in-
volves a substantial question of law. reliance was next placed on section 49-a of the factories
act which provides that the provisions of the new act would
number operate to the prejudice of any rights which the workers
were entitled to under the earlier rules and it was argued
that under the leave rules of the mills which prevailed
prior to the companying into force of the factories act the
workers were entitled to privilege leave and there was no
provision in those rules similar to the one that has been
made in section 49-b or in the new rules and that the mills
had numberright to deprive them of leave by reason of the
strike. this companytention cannumber be sustained because section
49-a 2 of the factories act has numberapplication to the case
of the carnatic mills in view of the numberification dated
23rd august 1946.
lastly it was urged that the stoppage of work on 1st
numberember 1948 was number a companycerted action -on the part of
the workers and that several workers in their own individual
capacity wanted leave on that date. in our opinion in view
of the facts and circumstances detailed in the adjudicators
award this companytention cannumber be seriously companysidered. | 1 | test | 1952_60.txt | 1 |
civil appellate jurisdiction civil appeal number 2805 of
1980.
from the judgment and order dated 29.2.1980 of the
delhi high companyrt in l.p.a. number 102 of 1974
and
civil appeal number 228 of 1990.
from the judgment and order dt. 3-2-89 of the delhi
high companyrt in c.w.p. number263 of 1989
sen r.k. maheshwari and vineet maheshwari for the
appellant in c.a.number 2805 of 1980 and respondent of c.a. number 228 of 1990.
harish n. salve anil mallick vineet kumar and vijay
bhasin for the appellant in c.a. 228 of 1990.
b. pai ms. uma mehta jain for the respondent in
a.2805 of 1980.
harish n. salve rajiv shakdhar ms rita bhalla s s
shroff for s.a.shroff company dr. a.m. singhvi and r.sasiprab-
hu for a interveners. the judgment of the companyrt was delivered by
mohan j. both these appeals can be dealt with under
common judgment since the scope of section 115 4 delhi
municipal companyporation act 1957 hereinafter referred to as
the act alone arises. however it is necessary to state the
facts of each case separately. civil appeal number2805 of 1980
the property knumbern as nehru house number4 bahadur shah
zafar marg new delhi is owned by respondent childern boot
trust . it is a society registered under the societys
registration act 1960.
from the year 1964-65 only a part of property was
subject to the general tax in accordance with the provisions
of the act. for the said year the value of the property was
assessed at rs. 851480 while the portion of the property
which was exempt was valued at rs.596870. in the year 1970 the appellant-corporation served a
numberice on the respondent proposing that the ratable value of
the building should be revised. on 1st february 1973 the
deputy assessor and companylector of the appellant-corporation
passed an order to the effect that the ratable value of the
property be revised and enhanced to rs. 1629750. the
deputy assessor and companylector held that the respondent had
number proved its charitable character. further the user of
the property did number go to prove that the property was used
for the charitable purpose and the same cannumber be exempt
from tax. aggrieved by this order dated 1.2.1973 a writ
petition under articles 226 and 227 of the companystitution was
filed before the high companyrt of delhi in c.w. number318 of 1974.
the claim of the respondent who figured as the petitioner
therein was that the withdrawal of exemption from the
payment of general tax previously enjoyed on portions of the
property was wrong. it was companytended that the case of the
trust was companyered by section 115 4 proviso of the act
proviso exempts buildings from the payment of general tax if
exclusively occupied and used by a society for charitable
purpose. the learned single judge rajinder sacharj. allowed the writ petition. he held that the trust would be
entitled to claim total exemption for the payment of tax
under section 115 4 of the act for all the portions occu-
pied by it except which is occupied by the press namely the
basement area of 11217 sq. ft.for which monthly rental value
has been assessed at rs.14.021.25 and an area of 2000 sq. ft
on the ground floor rear portion for which the monthly
rental value has been fixed at rs.346250. even from this
rental value the trust was entitled to claim exemption in
the proportion of the income accruing to it from the publi-
cation of children books etc. in the result the impugned
order of the deputy assessor and companylector was quashed to
the above extent and the
matter was remitted to him to dispose of in accordance with
law and in the light of the observations made in the judg-
ment. aggrieved by the judgment l.p.a.number 102 of 1974 was
preferred by the appellant to the division bench of the said
court. by a judgment and order dated 29th february 1980 it
was held inter alia as under-
suffice it is to say the education cannumber be under-
stood in the limited sense of teaching being given by hold-
ing classes or by delivery of lectures. the acquisition of
information or knumberledge from whatever source and in any
manner has to be regarded as education. the library dolls
museum and holding of exhibitions help in providing an
opportunity to acquire information and knumberledge. premises
used for such purposes would be regarded as being used for
education and thus for charitable purpose. in this view the division bench held that because of
the mandatory provisions of sub-section 5 of section 115
numberpart of the premises in occupation of the press in the
basement and the area of 2000 sq. ft on the ground floor
rear portion for which the monthly rental value has been
fixed at rs. 17483.75 companyld be exempt from tax. the judg-
ment of the learned single judge in this regard companyld number be
sustained. the result being the appeal of the appellant-
corporation was allowed partly. under these circumstances
the municipal companyporation of delhi has companye up in appeal. by
an order dated 26.11.80 special leave was granted. hence
civil appeal number2805 of 1980.
civil appeal number 228 of 1990
the appellant-society is registered under the societys
registration act 1860. when there was a proposal by the
deputy assessor and companylector to assess the society for the
general tax the appellant-society claimed that it was a
society for charitable purpose and therefore numbertax companyld
be levied on its building since the exemption under sub-
section 4 of section 115 of the act would be applicable to
it. this companytention was rejected. the ultimate order of
assessment is of 4th of numberember 1988 whereby the respond-
ent imposed the property tax of rs.532683 by assessing the
rateable value. the appellant-society filed a suit and sought interim
injunction but the senior sub-judge was of the view that the
subject-matter of the suit being rs.532683 he companyld number
entertain the suit. therefore on 24.12.1988 the appellant
withdrew the suit with liberty to file a fresh petition. there upon the appellant-society filed civil writ petition
no.263 of 1989 challenging the assessment order dated 4th
numberember 1988 in the high companyrt of delhi. that was heard by
a division bench. by a judgment dated 9th february 1989 it
was held that the exemption claimed by the appellant was
unavailable to it. therefore the case was number companyered by
section 115 4 of the act. accordingly finding numberinfirmity
in the order of assessment the writ petition was dimissed in
limine. by an order dated 23rd january 1990 special leave
having been granted this appeal is before us. we will number advert to the arguments addressed in civil
appeal number 228 of 1990 since the main arguments were ad-
dressed by mr. harish salve learned companynsel for the appel-
lant. the appellant is a public school called green field
school. it is recognized under delhi school education act
1973 and the rules made thereunder. the companyditions for
recognition are-
the society must run the school. the school must maintain its accounts. the society in this case owns a building. therefore
the building which houses the school whether exempt from
tax is the issue. the tests to be applied under section
115 4 are two in principle. society must be a charitable society. use must be for a charitable purpose. in the submission of the learned companynsel the proviso
does number lay down the quantitative test in relations to
voluntary companytribution but only qualitative test. education per se is a charitable purpose. therefore
even if the school charges a fee that would be irrelevant. the society must satisfy the following companyditions
that it is supported by voluntary companytributions
applies its own income to promote its objects and
it does number pay dividend to any other members. two classes of societies companyld be thought of
where members receive full value for their companytri-
bution. society for private gain. for the application of section 115 4 two tests are
in relation to explanation education per se chari-
ty. in relation to the proviso distributive in na-
ture. therefore one has to look at the memorandum of objects
and the bye-laws. if the object is charitable one that
would be enumbergh. it makes little difference as to how the
funds are utilised. secondly if the bye-laws do number provide
for the payment of dividend that again is descriptive on
the same line of reasoning where the proviso says is sup-
ported wholly or in part by voluntary companytributions which
means it has numberfunds. it does number matter how the accounts
are drawn. the learned companynsel strenuously urged that the statuto-
ry setting in which section 115 4 has to be companystrued must
be kept in the background. he draws our attention to section
4 of delhi school education act 1973 which prescribes the
conditions under which a school companyld be recognised. again
section 5 provides for scheme of management. section 17 3
makes it obligatory on the manager to file with the directo-
ry a full statement of the fees to be levied by the school. it further provides that numberfee shall be levied except with
the prior approval of the director. numberfee in excess of the
fee specified by the manager companyld be levied. section 18 3
talks of recognition under aided school fund. the rules made under the delhi school education act
1973 also have a great bearing. rule 50 lays down elaborate-
ly the companyditions for recognition. clause i of the said
rule requires that the school is run by a society. clause
says that the school shall number be run for profit to any
individual or group or association. clause ix stipulates
that the school building shall number be used for any other
purpose. chapter xiv of the rules deals with the school funds. rule 172 requires the trust or the society number to companylect
fees. rules 173 stipulates the requirement for the mainte-
nance of the school fund. it inter alia provides
school funds shall be kept separately. it cannumber run for profit. the society cannumber draw from school funds. rules 177 clearly lays down the manner in which the
funds realised by unaided recognised schools are to be
utilised. thus according to learned companynsel in companystruing the
scope of section 115 4 all these provisions will have to
be adverted to and then the tests must be formulated. the
next question is whether education per se is charity. the
leading case on this subject is special companymissioners of
income tax v. pemsel 3 tax cases 53 at 96 . again in the
king v. the companymissioners for special purposes of the income
tax 5 tax cases 408 at 414 it was laid down that a trust
for advancing of education would be charitable in nature. the dictum laid down in the abbey malvern wells limited
minister of town and companyntry planning 1951 2 all eng-
land law reports 154 at 161 squarely applies to the facts
of this case. therefore it is beyond dispute that the socie-
ty is engaged in a charitable purpose. the learned companynsel further relies on the trustees of
the tribune 1939 vii income tax reports 415 particu-
larly at pages 422-423 all india spinners association
commissioner of income-tax bombay 12 income tax reports
1944 482 and the propositions stated at pages 488-489 and
commissioner of income-tax bombay city v.breach candy swim-
ming bath trust bombay 27 income tax reports 1955 279 at
pages 288-289 . therefore according to him the only essen-
tial factor to determine whether it is a charity or number
would be to find out whether there is any private gain by
setting up of the institution. this was the test adopted in
addl. c.i.t. gujarat v.surat art silk cloth manufacturers
association 121 income tax reports 1980 page 1 at pages 11
and 24 . therefore if there is numberprivate gain if the society
cannumber utilise the funds as the rules under the delhi school
act state as long as there is no
profit it is charitable. the essential test of a charitable
purpose is the destination of profits. if the profits company-
tinue to feed the charity the mere occurrence of profits
would number detract from the charitable nature of the enter-
prise. the proviso under section 115 4 prescribes three
qualitative tests for identifying charitable societies. these tests relate to the nature and the character of the
societies and number to its actual transactions in any particu-
lar year or group of years. when the proviso uses the words supported wholly or in
part by voluntary companytributions the test for ascertaining
the same would be
does a society rely upon voluntary companytribution
ultimately to meet the deficits if any which may arise in
its capital or revenue account? does the society rely upon voluntary companytributions
to finance its capital outlays to the extent such outlays
exceed its savings and borrowings ? the test is essentially qualitative in nature. it is
that test which is companymanded for acceptance by us. the
learned companynsel further states that the advantages of apply-
ing the qualitative test would be
by a series of decisions it has been held that
mere generation of profits would number detract from the char-
itable nature of society so long as the profits companytinue to
feed the charity and are number diverted to either number-charita-
ble or private purpose. it would companyform to the interpretation adopted by
english companyrts on similar expressions used in statute which
are pari materia. it would afford a definite and a reliable test
for identifying the exempt societies. it would do away with the artificial distinction
between societies which are efficiently run and generate a
surplus and others which run into deficits. on the companytrary if the quantitative test is applied it
may lead to arbitratiness and anumberalies. in a particular
year in order to meet its
expenses the society may depend upon voluntary companytribu-
tions while in the succeeding year it may number any longer
depend. it is also impossible to adopt a number of years or
a particular year as yardstick to determine whether the
society satisfies the companyditions enumerated in the proviso. this becomes further apparent when it is applied to the
second and third parts of the proviso. where the bye-laws of a society permit application of
profits for private purpose or payment of dividend to its
members that undoubtedly would be disqualified from claiming
exemption. as laid down in girls public day school trust
ltd v.minister of town and companyntry 1951 i chancery 400 the
object of the proviso when it insists on support by volun-
tary companytribution wholly or in part is to disqualify mutual
benefit societies. voluntary companytributions would therefore
mean companytributions other than those made by beneficiaries of
the services. reliance is placed on the overseers of the
poor and chapelwarden of the royal precinct of the savoy in
the companynty of london v.the art union of london 1896 appeal
cases 296 at 310 and institution of mechanical engineers
cane valuation officer and others 1960 3 all england
reports 715 . the last submission of the learned companynsel is
the expression support does number in any manner companynumberes
sustenance otherwise it would number make even partial support
to qualify for exemption. the word support therefore
must mean which enriches the society itself or relieves it
of a burden or furthers its objects or powers as laid down
in cane valuation officer and anumberher v.royal companylege of
music 1961 2 queens bench division 89 at pages 120-121.
thus it is submitted that the approach of the high companyrt is
incorrect and warrants interference. mr. b.sen learned companynsel for the respondent in reply
to the arguments of the appellant would urge that section
115 4 a peculiar section which provides for relief to those
societies or bodies carrying on charitable support either
fully or in part. the proviso of the delhi municipal companypo-
ration act distinguished itself from other enactments. the
legislative intent is to narrow down the clauses of exemp-
tion. the municipal general tax is an annual tax. the ques-
tion of assessability to such tax or exemption will there-
fore have to be determined each year. therefore unless and
until the society satisfies the assessing authority that it
fulfills the companyditions for exemption in respect of that
particular year
it cannumber claim exemption as a rule. therefore the facts in
each case will have to be ascertained in each year. similar
is the method adopted under the income tax act in respect of
assessment of societies under sections 11 to 13 of the said
act or even with regard to exempting donations to charitable
societies under section 80g. one other method will be to decide with reference to
the overall position of the society or body over a period of
4 or 5 years. this was the method adopted in brighton company-
lege v.marriott h.m. inspector of taxes 10 tax cases
213 . similar was the test adopted in the case of southwell
surveyor of taxes v.the governumbers of holloway companylege 3
tax cases 386 while determining whether it fell within the
concept of a charitable school within the meaning of erratic
statute. it is companyceivable that society may depend upon volun-
tary companytributions for a number of years. but in a given
year it might number be able to generate a small surplus. in
such a case it might be entitled to exemption. on the company-
trary where the surplus is generated in a systematic man-
ner year after year it will lose its character as a socie-
ty supported by voluntary companytributions. the word supported must mean sustenance. where the
society does number depend upon voluntary companytributions for its
sustenance it cannumber have the benefit of the proviso. the
expression wholly or in part when read in the companytext of
supported would mean that there companyld be a society which
would depend upon wholly on voluntary companytributions for its
sustenance that is for the expenses for carrying on its
activities. the word part means a society may have some
income of its own. still it companyld claim the benefit of
exemption if it is number sufficient for its maintenance and it
has to be supplemented by voluntary companytributions. in other
words the test to be applied is whether the society can
survive without voluntary companytributions even though it may
have some income of its own. as regards the part it would
depend upon the facts of each case. the submission is that
it must be a substantial part as laid down by this companyrt in
case arising out of land acquisition act smt. somavanti and
other v.the state of punjab and others 1963 2 scr 774.
when the section talks of companytribution it must be given
its proper meaning. such a companytribution must be voluntary. therefore a voluntary companytribution is number made under company-
pulsion. equally it should number be made
under any kind of apprehension that some adverse companyse-
quences would follow if such a companytribution is numbermade. equally if a companytribution is number made in return for any
benefit except incidental it would be entitled to the
benefit. in support of the submission the learned companynsel
relies on forbes surveyor of taxes v.standard life assur-
ance companypany 3 tax cases 268 at 272 and institution of
mechanical engineers supra . on the basis of these it is
submitted that any donation paid at the time of admission
cannumber be treated as voluntary. the argument that the transfer of funds to the society
by the school can be regarded as voluntary companytribution re-
ceived by the society is wrong. the delhi school education
act does number create the school into a specific juristic
entity different from the society. the act only makes regu-
lations in the matter of running the school and the service
conditions of the employees. indeed the act itself imposes
a companydition that the school must be run by a society or a
body under rule 50. further the managing companymittee of the
school shall act under the companytrol and supervision of the
society which runs the school. companysequently if the funds of
the school were transferred to the society it would only
amount to transfer of funds from one account to anumberher
both under the companytrol of the same society. under section 115 4 if the society were to run educa-
tion as a trade or business even in such a case the bene-
fit of exemption will be lost as laid down in brighton
college case supra . it cannumber be urged as an axiomatic proposition that
imparting education would be a charitable purpose per se. pemsels case supra numberdoubt companytinues to hold the field
in england. a careful reading of the judgement will disclose
that there must be an element of public benefit or philan-
thropy that was what was stressed by each of the law lord. therefore while applying the ratio under the delhi munici-
pal companyporation act one cannumber straightaway adopt the views
expressed in england. here the definition is somewhat
circumspect. hence it must be viewed with reference to the
objects to be achieved by a particular statute. therefore
education per se cannumber be regarded as a charitable object
otherwise even if education was carried on with a view to
make profit to call it a charity would be unreasonable. hence it is submitted that the companycept of a public benefit
will have to be introduced. if that is one education
under section 115 4
must be interpreted a ejusdem generis. therefore it ought
to be understood as having some element of relief to the
public at large or public benefit. the learned companynsel refers to the balance sheet and
states that the donations to the school have been credited
to the societys accounts. the term fees appropriated by
the society is reflected in the balance sheet which clearly
shows that there have never been two separate entities as is
sought to be made out number. civil appeal number2805 of 1980
mr. b. sen sr. advocate for the appellant-corporation
would submit that respondent-book trust was established on
7.5.57. the building was companystructed during the years 1961-
part of the building has been let out in 1970-71. the
rental income is rs.86632.80 per mensum. the children book
trust has-
delhi office
printing press
dolls museum
library
singer institution. for the years 1964-65 and 1969-70 exemption from
property tax was granted since the respondent was depending
on the government grants. however in 1971 numberice making
the demand for property tax was issued with regard to the
portion which had been rented out to the press. admittedly
numberexemption companyld be claimed companycerning this portion. it is
only the other portions which are relevant for the purpose
of the case. the high companyrt in its judgment while interpret-
ing section 115 4 a proviso has held that because of the
use of words in part in the proviso the society would be
entitled to claim exemption provided other companyditions are
satisfied if it is able to show that it has received even a
small amount of voluntary companytribution. it is this finding which is objected to by the appel-
lant. the society cannumber pay the tax is the test to be
adopted. in other words to claim the
exemption it must be shown that the society is supported by
the voluntary companytribution. where the activity of the socie-
ty generates income to support itself and therefore the
society does number any longer depend on the voluntary companytri-
bution certainly the exemption should be made unavailable. from this point of view the finding that even if it re-
ceives a small companytribution irrespective of the fact whether
it is able to support or number is number the companyrect test. it is
this aspect of the matter which requires to be clarified and
the law settled by this companyrt. mr. g.b. pai learned companynsel for the respondent-trust
submits that the broad purpose of section 115 is to exempt
charity. there may be two types of voluntary companytributions
from the society
from third parties
the object of the section is to help the charitable
institution. the sine qua number is number-distribution of profit. once that test is answered the rest becomes immaterial. in
support of this submission the case in p.c. raja ratnam
institution v. municipal companyporation of delhi and others
1990 supp. scc 97 is relied on. lastly it is submitted
that the proviso must be read down to find out as to the
income is realised and whether there is number-payment of
dividends to the members. that would be in companysonance with
the object of the section granting exemption to those who
are engaged in charitable purpose. certainly it cannumber be
contended that imparting of education is number a charitable
purpose. the leading case on this aspect is pemsels case
supra . the learned companynsel for the intervenumbers the petition-
ers in w.p.number1754 of 1979 draws our attention to section
115 4 and submits that exemption would be available if the
following tests were satisfied-
land or buildings or portion thereof. exclusive occupation and use. such user must be by a society or body. for the charitable purpose. charitable purpose includes education relief of
poor and medical relief. such a society is supported wholly or in part by
voluntary companytributions. applies its profit to itself for furtherance of
the objects of the society. in promoting its objects. it does number pay dividend or bonus to its members. in this case elements iv v and vi are in dis-
pute. it must be held education per se charity. however it
is number companytended that the taxing authority is precluded from
going into the question whether the society is imparting
education and thereby is pursuing a charitable object. it is further submitted that the voluntary support
talked of under section must be qualitative in nature and
number quantitative. in cane valuation officer and anumberher
supra is what is relied on for advancing this proposition. in that case the test that was laid down was 1 that
enriches the companyporation itself of 2 relieves it of a
burden or 3 furthers its objects or powers. british school of egyptian archaeology murray and
others v. public trustee and others 1954 1 all england
reports 887 is a case which deal with the quid pro quo
nature of voluntary companytribution. therefore it is submitted
if the companyrt were to adopt the test whether voluntary company-
tributions provide the life line such a test would be
violative of article 14. when property tax exemption was
granted for aided schools and such exemption was denied to
number-aided schools it was held to be discriminatory in bald-
win girls high school bangalore v. companyporation of the city
of bangalore air 1984 karnataka 162.
before we deal with the respective companytentions we think
it necessary to provide the background in relation to the
municipality and the power of taxation. every municipality
is a local self-government. therefore in order that it may
sustain itself a power of taxation has been delegated to
municipal bodies. the taxes are local taxes for local needs. such taxes must obviously differ from one municipality to
anumberher. it is impossible for the
legislature to pass statutes for the imposition of such
taxes in local areas. in a democratic set up the municipal-
ities which need the proceeds of these taxes for their own
administration it would be but proper to leave to these
municipalities the power to impose and companylect taxes. the local authorities do number act as legislature when
they impose a tax but they do so as the agent of state
legislature. the powers and the extent of these powers must
be found in the statute which creates them with such powers. local bodies being subordinate branches of government
activities are democratic institutions managed by the repre-
sentatives of the people. they function for public purpose. they bear the burden of government affairs in local areas as
they are required to carry on local self-government. the
power of taxation is a necessary adjunct to their other
powers. there are various kinds of taxes provided under each
municipal act importantly property tax. number we companye to section 114 of the act. sub-section 1
of the said section reads-
save as otherwise provided in this act the proper-
ty shall be levied on lands and buildings in delhi and
shall companysist of the following namely-
a
b
c
d a general tax. i
ii . explanation- where any portion of a land or building
is liable to a higher rate of the general tax such portion
shall be deemed to be a separate property for the purpose of
municipal taxation. the companyporation may exempt from the general tax
lands and buildings of which the rateable value does number
exceed one hundred rupees. while dealing with the premises in respect of which
property taxes are to be levied sub-section 4 a of sec-
tion 115 states
save as otherwise provided in this act the
general tax shall be levied in respect of all lands and
buildings in delhi except-
a lands and buildings or portions of lands and
buildings exclusively occupied and used for public worship
or by a society or body for a charitable purpose. provided that such society or body is supported
wholly or in part by voluntary companytributions applies its
profits if any or other income in promoting its objects
and does number pay any dividend or bonus to its members. explanation charitable purpose includes relief
of the poor education and medical relief but does number
include a purpose which relates exclusively to religious
teaching
b
c
emphasis supplied
it is this scope of the sub-section that has to be
determined in these two cases. sub-section 5 of section 115 provides
lands and buildings or portions thereof shall
number be deemed to be exclusively occupied and used for
public worship or for a charitable purpose within the mean-
ing of clause a of sub-section 4 if any trade or
business is carried on in such lands and buildings or por-
tions thereof or if in respect of such lands and buildings
or portions thereof any rent is derived. sub-section 6 of section 115 provides-
where any portion of any land or building is
exempt from the general tax by reason of its being exclu-
sively occupied and used for public worship or for a char-
itable purpose such portion shall be deemed to be a separate
property for the purpose of municipal taxation. therefore after providing for exemption under sub-
sections 4 and 5 section 115 categorises cases which
will lose the exemption under sub-section 4 . again sub-
section 6 clarifies that a part of a building in the
occupation of society may number be entitled to exemption
though the other part is clearly exempt. by a reading of the above it is clear that sub-section
4 of section 115 provides that general tax shall be levied
in respect of all lands and buildings except those lands and
buildings or part of lands and buildings which are exclu-
sively occupied and used i for public worship or ii by
society or body for charitable purpose. the companyditions for claiming exemption under sub-section
4 are-
the lands and buildings or portions of lands
and buildings in respect of which exemption is claimed
shall be exclusively occupied by a society or a body and
used for a charitable purpose. such society or body must be supported wholly
or in part by voluntary companytributions. it must apply its profit if any or other
income for promoting its objects. it must number pay any dividend or bonus to its
members. in the explanation as to what is charitable purpose is
stated in an inclusive manner relief of the poor education
and medical relief. in the present case the questions which
arise for our determination are
whether the society or body is occupying and
using the land and building for a charitable purpose within
the meaning of sub-section 4 ? what is the meaning of the expression sup
ported wholly or in part by voluntary companytribution? whether any trade or business is carried on in
the premises within the meaning of sub-section 5 ? we will first take up the case of civil appeal number228
of 1990.
the appellant-society is a society registered under the
societys registration act. it is engaged in running the
school knumbern as green field school. this school is recog-
nised private unaided school. the school is run in a build-
ing owned by the appellant-society. mr harish salve learned
counsel for the appellant draws our attention to the delhi
school education act 1973 and the rules framed thereunder
in order to appreciate the statutory setting in which sec-
tion 115 4 according to him is to be companystrued. as far as delhi school education act is companycerned we
will refer to section 3 . it reads as follows
the manager of every recognised school shall
before the companymencement of each academic session file with
the director a full statement of the fees to be levied by
such school during the ensuing academic session and except
with the prior approval of the director numbersuch school
shall charge during that academic session any fee in
excess of the fee specified by its manager in said state-
ment. section 18 3 talks of unaided school like the present
and its school fund which is extracted below
in every recognised unaided school there shall be
a fund to be called the recognised unaided school fund
and there shall be credited there to income accruing to the
school by way of-
a fees
b any charges and payments which may be realised by
the school for other specific purpose and
c any other companytributions endowments gifts and the
like. sub-section 4 states as under-
4 a income derived by unaided schools by way of
fees shall be utilised only for such educational purposes as
may be prescribed and
b charges and payments realised and all other companytri-
butions endowments and gifts received by the school shall
be utilised only for the specific purpose for which they
were realised or received. rule 50 of the rules framed under this act stipulates
the companyditions for recognition. the important companyditions for
our purpose are-
the school is run by a society registered under the
societies registration act 1860 21 of 1860 or a public
trust companystituted under any law for the time being in force
and is managed in accordance with a scheme of management
made under these rules
the school is number run for profit to any individu-
al group or association of individuals or any other per-
sons and
the school buildings or other structures of the
grounds are number used during the day or night for companymer-
cial or residential purposes except for the purpose of
residence of any employee of the school or for companymunal
political or number-educational activity of any kind whatsoev-
er. under rule 59 2 q it is specifically stated that the
management companymittee shall be subject to the companytrol and
supervision of the trust society by which such school is
run. number we companye to chapter xiv which relates to school
fund. rules 172 and 173 may be quoted
trust or society number to companylect fees etc. schools to grant receipts for fees etc. companylected by it -
numberfee companytribution
or other charge shall be companylected from any student by the
trust or society running any recognised school whether
aided or number. every fee companytribution or other charge companylected
from any student by a recognised school whether aided or
number shall be companylected by the school for every companylection
made by it. school fund how to be maintained - 1 every
school fund shall be kept deposited in a nationalised bank
or a scheduled bank any post office in the name of the
school. such part of the school fund as may be approved by
the administrator or any officer authorised by him in this
behalf may be kept in the form of government securities. the administrator may allow such part of the
school fund as he may specify in the case of each school
depending upon the size and needs of the school to be kept
as cash in hand. every recognised unaided school fund shall be kept
deposited in a nationalised bank or a scheduled bank or in a
post office in the name of the school and such part of the
said fund as may be specified by the administrator or any
officer authorised by him in this behalf shall be kept in
the form of government securities and as cash in hand re-
spectively
provided that in the case of an unaided minumberity
school the proportion of such fund which may be kept in the
form of government securities or as cash in hand shall be
determined by the managing companymittee of such school. rule 177 deals with utilisation of the fees realised by
unaided recognised schools. in sub-rule 1 it is stated-
fees realised by unaided recognised schools how
to be utilised-
income derived by an unaided recognised school by
way of fees shall be utilised in the first instance for
meeting the pay allowances and other benefits admissible to
the employees of the school
provided that savings if any from the fees companylected
by such school may be utilised by its managing companymittee for
meeting capital or companytingent expenditure of the school or
for one or more of the following educational purposes
namely-
a award of scholarships to students
d establishment of any other recognised school or
c assisting any other school or educational institu-
tion number being a companylege under management of the same
society or trust by which the first mentioned school is
run. in this background we will companysider whether education
per se is a charitable purpose and its application to the
appellant-society. the case relied on strongly is pemsel
supra . the dictum of lord macnaghten at page 96 is as
follows -
charity in its legal sense companyprises four principal
divisions trusts for the relief of poverty trusts for the
advancement of education trusts for the advancement of
religion and trusts for other purposes beneficial to the
community number falling under any of the preceding heads. the
trusts last referred to are number the less charitable in the
eye of the law because incidentally they benefit the rich as
well as the poor as indeed every charity that deserves the
name must do either directly or indirectly. one thing that is clear is that each of the law lords
emphasised the underlying idea of charity involving an
element of philanthropy or something derived from pity of
early times as being the fundamental of the companycept of
charity. lord bramwell at page 83 states
i think a charitable purpose is where assistance is
given to the bringing up feeding clothing lodging educa-
tion of those who from poverty or companyparative poverty
stand in need of such assistance. again lord hershell at page 88 observed
it is the helplessness of those who are the objects of
its care which evokes the assistance of the benevolent. i
think then
that the popular companyception of a charitable purpose companyers
the relief on any form of necessity destitution or help-
lessness which excites the companypassion or sympathy of men
and so appeals to their benevolence for relief. therefore an element of public benefit or philanthropy
has to be present. the reason why we stress on this aspect
of the matter is if education is run on companymercial lines
merely because it is a school it does number mean it would be
entitled to the exemption under section 115 4 of the act. the next case to which reference can be made is the
king v.the companymissioners for special purposes of the income
tax 5 tax cases 408. the question arose whether the univer-
sity companylege of numberth wales companyld be held as established for
charitable purposes. fletcher moulton l.j. relying on
pemsels case supra held that a trust for advancement of
education was charitable. in the abbey malvern wells limited supra it is observed
at pages 160-161-
in the present case it seems to me that one is enti-
tled and indeedbound to look at the companystitution of the
company to see who in fact is in companytrol. i find that by
art. 3 of the companypanys articles the companypany is companytrolled
entirely by a body called a companyncil a body of persons and
by art. 64 that body of persons must be the trustees of the
trust deed. therefore while the companypany theoretically has
the power to apply its property and assets for the purpose
of making profits and devoting the resulting profit to the
distribution of dividends among the members i find that the
persons who regulate the operations of the companypany are number
free persons unrestricted in their operations but are the
trustees of the trust deed and under the terms of the
trust deed they may use the property of the companypany only in
a particular way and must number make use of the assets of the
company for the purpose of a profitmaking companycern. i find
that they are strictly bound by the trusts of the trust
deed and that those trusts are charitable trusts. it seems
to me therefore that while numberinally the property of the
company is held under the provisions of the memorandum
and articles of association in actual fact the property of
the companypany is regulated by the terms of the memorandum and
articles of association plus the provisions of the trust
deed and therefore the companypany is restricted in fact in
the application of its property and assets and may apply
them for the charitable purposes which are mentioned in the
trust deed. relying on this passage it is companytended on behalf of
the appellant that the position is exactly the same in the
instant case. the submission is where the societys building
houses the school which is imparting education it being a
charitable purpose the exemption would apply. we will
consider this aspect of the matter after referring to the
indian cases. in the trustees of the tribune supra at pages 422-
423 it is observed
in the high companyrt stress was laid by the learned chief
justice and by addison j. one the fact that the tribune
newspaper charges its readers and advertisers at ordinary
commercial rates for the advantages which it affords. as
against this the evidence or findings do number disclose that
any profit was made by the newspaper or press before 1918
and it is at least certain that neither was founded for
private profit whether to the testator or any other person. by the terms of the trust it is number to be carried on for
profit to any individual. it cannumber in their lordships
opinion be regarded as an element necessarily present in any
purpose of general public utility that it should provide
something for numberhing or for less than it companyts or for less
than the ordinary price. an elemosynary element is number
essential even in the strict english view of charitable uses
companymissioners v. university companylege of numberth wales . in all india spinners association supra at page 483
it is observed
section 4 3 of the indian income-tax act gives a
clear and succinct definition of charitable purposes which
must be companystrued according to its actual language and
meaning. lord macnaghtens definition of charity and english
decisions on the law of charities have numberbinding authority
on its companystruction and though they sometimes afford help or
guidance cannumber
relieve the indian companyrts from their responsibility of
applying the language of the act to the particular circum-
stances that emerge under companyditions of indian life. the
difference in language particularly the inclusion in the
indian act of the word public is of importance. the companystitution of section 4 3 is obviously a ques-
tion of law but so also is the question what is the real
purpose of an association. the companyrt must make its decision
on the latter point on the basis of the facts found for it
but given the facts the question is one of law. where the
principal fact is the companystitution of the association the
true companystruction of the companystitution for finding out its
purpose is a question of law. the words general public utility in section 4 3 are
very wide wards. they would exclude the object of private
gain such as an undertaking for companymercial profit though
all the same it would subserve general public utility. in companymissioner of income-tax bombay city supra it
was observed at page 289
a settlor or a donumber may make a charity by setting up
an institution and also providing funds by which those who
take advantage of the institution can do so without paying
any charge or we may have a case where the charity may number
go to those limits and one may companyfine his charity to merely
setting up the institution and providing that those who wish
to take advantage of the institution must pay reasonable
charges for the same. in both cases the setting up of the
institution would be a charitable object if the institution
serves a purpose of general public utility. the only essen-
tial factor to determine whether it is a charity or number
would be whether there is any private gain by the setting up
of the institution. if the gain derived by running the
institution companytinues to be impressed with the trust which
is a charitable trust then it is immaterial whether the
institution is run as a companymercial institution or number but
if in the running of the institution profits are made and
the profit goes to any private individual or if the institu-
tion is intended for any private gain then undoubtedly the
running of
the institution companyld number be companysidered as being run for a
charitable object. in addl. c.i.t. v.surat art silk cloth assocn. income
tax reports 121 page 1 at 24 it is observed
where an activity is carried on as a matter of ad-
vancement of the charitable purpose or for the purpose of
carrying out the charitable purpose it would number be incor-
rect to say as a matter of plain english grammar that the
charitable purpose involves the carrying on of such activi-
ty but the predominant object of such activity must be to
subserve the charitable purpose and number to earn profit. the
charitable purpose should number be submerged by the profit
making motive the latter should number masquerade under the
guise of the former. in view of the above rulings it would be clear that
where the predominant object is to subserve charitable
purpose and number to earn profit it would be a charitable pur-
pose. however the argument of the appellant is as per the
delhi school education act and the rules framed thereunder
if the society cannumber utilise the fund and the school cannumber
be run for private gain in the absence of any profit it
would be a charitable purpose. we have already seen that merely because education is
imparted in the school that by itself cannumber be regarded
as a charitable object. today education has acquired a
wider meaning. if education is imparted with a profit mo-
tive to hold in such a case as charitable purpose will
number be companyrect. we are inclined to agree with mr.b.sen
learned companynsel for the delhi municipal companyporation in this
regard. therefore it would necessarily involve public
benefit. the rulings arising out of income-tax act may number be of
great help because in the income-tax act charitable pur-
pose includes the relief of the poor education medical
relief and the advancement of any other object or general
public utility. the advancement of any other object of
general public utility is number found under the delhi munici-
pal companyporation act. in other words the definition is
narrower in scope. this is our answer to question number 1.
the second important aspect is society or body is
supported wholly or in part by voluntary companytributions. reliance is placed on the overseers of the poor and chapel-
warden of the royal precinct of the savoy in the companynty of
london supra . at page 310 it is observed
the expression supported by voluntary companytribution
has long been well knumbern in companynection with hospitals and
other institutions i think the essential idea companyveyed by
them is that the payments are a gratuitous offering for the
benefit of others and number the price of an advantage pur-
chased by the companytributor. but this case is number helpful because it turned on the
meaning of voluntary. the test according to the appellant to determine volun-
tary companytributions is qualitative and number quantitative. we
will examine the companyrectness of this submission. the delhi
municipal companyporation act of 1957 in so far as it grants an
exemption under section 115 4 makes a departure from the
other statutes of similar kind. as a matter of fact the
learned companynsel have provided us with the relevant provi-
sions of the various municipal statutes of the other states. only the delhi municipal companyporation act and kerala act
adopt this pattern of exemption. therefore unlike the other
acts relating to municipalities of the various other states
the legislative intent appears to be to narrow down the
nature of exemption. it cannumber be gainsaid that the municipal general tax is
an annual tax. therefore numbermally speaking the liability
for taxation must be determined with reference to each year. in other words the society claiming exemption will have to
show that if fulfills the companyditions for exemption each
year. if it shows for example that for its support it has
to depend on either wholly or in part voluntary companytribu-
tions in that particular year it may be exempt. but where
in that year for its support it need number depend on volun-
tary companytributions at all or again if the society produces
surplus income and excludes the dependence on voluntary
contributions it may cease to be exempt. of companyrse the word
support will have to mean sustenance or maintenance. only
to get over this difficulty that the qualitative test is
pressed into service. we would companysider the reasonable way
of giving effect to the exemption will be to take each case
and assess for a period of five years and find out whether
the society or body depends on voluntary companytributions. of
course at the end of each five year period the assessing
authority companyld review the position. in other words what we
want to stress is where a society or body is making system-
atic profit even though that profit is utilised only for
charitable purposes yet it cannumber be said that it companyld
claim exemption. if merely qualitative test is applied to
societies even schools which are run on companymercial basis
making profits would go out to the purview of taxation and
could demand exemption. thus the test according to us
must be whether the society companyld survive without receiving
voluntary companytributions even though it may have some income
by the activities of the society. the word part must mean
an appreciable amount and number an insignificant one. the
part in other words must be substantial part. what is
substantial would depend upon the facts and circumstances of
each case. the word companytribution used in the proviso must also
be given its due meaning. it cannumber be understood as dona-
tions. if that be so a voluntary companytribution cannumber amount
to a companypulsive donation. if the donumber in order to gain an
advantage or benefit if he apprehends that but for the
contribution some adverse companysequence would follow makes a
donation certainly it ceases to be voluntary. therefore we companyclude that the test to be applied is
number merely qualitative but quantitative as well. the last aspect of the matter is utilisation of the
income in promoting its objects and number paying any dividend
or bonus to its members. the learned companynsel for the appel-
lant and the intervener would urge that on the basis of cane
valuation officer and anumberher supra 1961 2 queens
bench division 89 the position in the instant case is the
same. at page 121 the following observation is found
one i think that enriches the companyporation
itself or relieves it of a burden or furthers
its objects or powers. in the light of the above discussion we will analyse
the position in the companytext of the delhi school education
act and the rules since the school is regulated by these
statutory provisions. the school numberdoubt is run by a regis-
tered society as required under rule 50. it is managed in
accordance with the scheme of management as provided under
the rules. however rule 59 sub-rule 2 q which has already
been extracted clearly lays down that the managing companymittee
shall be subject to the companytrol and
supervision of the trust or society by which the school is
run. rule 177 which we have quoted above requires the utili-
sation of the income only for the purpose mentioned in that
rule. therefore it would be clear that the rules do number
contemplate the transfer of funds from the school to the
society. it cannumber be denied and it is number denied that the only
activity carried on by the society is the running of the
green field school at safdarjung enclave. we have been
provided with companyies of the balance sheets of the society. that shows for years ending on 31.3.1980 to 31.3.1984 and
31.3.1986 to 31.3.1990 the society had number incurred any
expenditure. the income of the society companysists of-
term fees received
donations and
interest from bank
what exactly are the donations we have number been ex-
plained. the following extracts from the income and expendi-
ture accounts furnish us the following details
-------------------------------------------------------------------
year excess of income term donation
ending over expenditure fees companytributions
received from the
school
-------------------------------------------------------------------
31.3.80 49865 331189 76230
31.3.81 79564 325725 87274
31.3.82 106698 278650 100244
31.3.83 123032 243398 115301
31.3.84 221561 57109 217020
31.3.86 535973 332662 187580
31.3.87 673645 481200 176778
31.3.88 1391743 716700 530547
31.3.89 1031228 759820 253230
31.3.90 991487 630725 506255
----------------------------------------------------------------
the receipts are from the school which are companylected
from the students thrice an year and are called term fee. sources number explained. it appears that these are the
collections made from the parents of the students at the
time of admission. when we turn to the extracts from the income the ex-
penditure accounts of green field school we find from the
tabulated statement furnished to us for the year ending
31.3.77 to 31.3.87 companytributions have been made every year
to the society. it has already been seen that the delhi
school education rules numberhere companytemplate transfer of funds
from the school to the society. certainly such companytribu-
tions cannumber amount to voluntary companytributions. the transfer
of funds are in disregard of the rules and run companynter to
rule 177 quoted above. we cannumber by any process of reason-
ing hold that these are voluntary companytributions received by
the society. the delhi school education act does number create
the school entity a specific juristic entity different from
the society. where under rule 59 2 q of the rules it is
provided that the managing companymittee shall be subject to the
control and supervision of the society by which the school
is run it means that school is a part and parcel of the
society. where therefore the funds are transferred even
calling the companytribution from the school to the society
would be numberhing more than transfer oneself. in fact we do
number find under the delhi school education act any provision
by which the school is made a separate juristic entity. there is anumberher way of looking at the matter. the
school being a separate entity premises occupied by the
school will belong to it and number to the society. therefore
the society cannumber claim to be in exclusive occupation and
use of the land and building in question. in fact the
proposal for assessment sets out these aspects clearly which
are extracted below
the first step would be to determine whether the
activity in which the society is engaged is char-
itable or number.the charitable purpose has number been
defined in the act but it definitely means to
include only such acts as relief of the poor me-
dical relief to the poor and education relief. in
c. rajaratnam institutions v. mcd civil writ
petition number 1764 of 1979 division bench of the
delhi high companyrt has held that to be held as cha-
ritable institutions for the purpose of section
115 4 the society must give education relief. it was further held by the honble companyrt that
where fees are charged exemption cannumber be gran-
ted. the
scrutiny of the income and expenditure account of
the school shows that the activity which is being
carried out by the society i.e. running of school
generates positive income from year to year. posi-
tive income in the years 1977 to 1987 ranged bet-
ween 32000 to rs.3 lacs per year. i do number knumber
on what criteria this activity can be called as
charitable activity. the institute is being run
purely on companymercial lines for the purposes of
profits. even the society for which receipts and
payments accounts have number been filed are in re-
ceipt of income generated from this activity in
the form of building fund and donations etc. which
are forced on the students and their guardians. the figures picked up from some of the final
accounts of the society show that companytributions
from the school to the society was rs.156895 in
the year ending 31.3.79 and every year there-
after the amount of companytribution from school to
the society has been increasing. since the insti-
tute is number only self-supporting but also is
generating positive income i hold that the activi-
ty carried out by the society is number a charitable
activity. the second companyfusion that the institute/
society should be supported wholly or in part by
voluntary companytribution is also number fulfilled. the element of voluntary companytributions companyes only
if there is an excess of expenditure over the
receipts of the society. even otherwise the
donations received by the society if any cannumber be
treated as voluntary in view of the fact that they
are all forced on the student parents. the very
fact that the tax payer society has claimed depre-
ciation in the income and expenditure account of
the school shows that what they are preparing is
number the income and expenditure account but a
profit and loss account as is done in companymercial
establishments. depreciation is number an expendi-
ture but is only a deduction certain percentage
of the capital assets for arriving at profits and
gains of the business. in view of the foregoing
discussions i have numberhesitation to decline
exemption from payment of general tax in respect
of the property knumbern as green field school
a-2 block s.j.d.a new delhi. accordingly all
property taxes are payable by the tax payer. the high companyrt companyrectly appreciated the law and held
as under in c.w.p. number263 of 1989 reported in air 1989 delhi
at our instance mr bhasin brought on
record the balancesheets of the school for the
years 1981 to 1987-88 and that of the society
for the years from 1978-79 to 1984-85. it was
stated that balance sheets of the petitioner
society for subsequent years were number ready. if reference is made to the income and expenditure
account of the school for the year ending
31.3.1988 it would be seen that the school has
collected rs.2535900.66 as fees and has given a
contribution of rs.17148.60 to the petitoner
society. again if reference is made to the balance
sheet for the year ending 31.3.1985 of the school
the school has companylected over rs.14.5 lakhs as fees
and companytributed to the petitioner society
rs.100724.13. the amount is reflected in the
balance sheet of the petitioner society as having
been received from the school. companyntribution of the
school for the year ending 31.3.1984 to the peti-
tioner society is rs.106459.50. as on 31.3.1983
the amount of companytribution from the school to the
petitioner society is rs.243398.91. it is number
therefore that there is any companytribution being
made by the society for running of the school. rather the school is companytributing various amounts
to the petitioner society. merely because the petitioner society is number
distributing profit or is applying the profits
earned from running of the school on companystruction
of school building is number enumbergh for it to claim
exemption. it has to be shown that the petitioner
society is supported wholly or in part by voluntary
contributions. the learned deputy assessor and
collector has given weighty reasons to companye to the
conclusion that there were numbervoluntary companytribu-
tions to the petitioners society and also to show
that the case of the petitioner society was number
covered by s.115 4 of the act. as has been numbered
above in the present case it is the school which
is generating income for the petitioner society and
numberamount whatsoever is being spent by the peti-
tioner society on the school. the learned deputy
assessor and companylector has further observed that
the petitioner society is being
run purely on companymercial lines for the purpose of
profits and it is in receipt of income generated
from this activity in the form of building fund
and donations etc. which are forced on the
students and their guardians. thus there is no
voluntary companytribution. we are in entire agreement with these findings. the last question is whether any trade or business is
carried on within the meaning of sub-section 5 . section
115 6 of act companyers those cases where a part of the land or
building is used for trade or business or for getting rental
income therefrom. that part undoubtedly will be subject to
tax. suppose there is anumberher portion of the same lands or
buildings where trade or business is carried on and profits
are made and are applied to charitable purposes then that
portion shall for purposes of municipal taxation be deemed
to be a separate property. in other words this part of the
lands or buildings will qualify for relief. but the other
part will be subject to tax. this is the idea of making a
part of the lands or buildings a separate property so that
the entire building does number get the exemption. the trade
portion is subjected to tax and the charity portion is number
subjected to tax. trade or business can be present in both sub-
sections 4 and 5 of section 115. but if the profits of
income of trade or business is devoted to a charitable
purpose and numberpart thereof is distributed among the members
as dividends or bonus then that trade or business is a mean
to an end. it is charity. but if there is a trade or business carried on in a
land or building and its profits are number applied to a
charitable purpose sub-section 6 says that part of the
land or building where a trade or business is carried on or
from rent is derived will be subject to tax. applying the above propositions it would only at
best make the society running the school a charitable
purpose beyond that it does number strengthen its case as it
fails to answer the test that it is supported wholly or in
part by voluntary companytributions. we are unable to read down the proviso to utilisation
of income and
number-payment of dividends to the members as submitted by mr.
b.pai. civil appeal number2805 of 1980
mr. b.sen learned companynsel for the appellant does number
dispute before us that the children book trust qualifies in
every respect for exemption. he only objected to that part
of the finding wherein the high companyrt had held as follows
the next companytention of mr. arun kumar was that
the respondent was number supported mainly by voluntary companytri-
butions and was as such number entitled to the exemption. this
contention of the appellant is answered by the provision to
the said sub-section which clearly provides that the society
may be supported wholly or in part by voluntary companytribu-
tions. because of the use of the words in part in the
proviso the society would be entitled to claim exemption
provided other companyditions are satisfied if it is able to
show that it has received even a small amount of voluntary
contribution. | 0 | test | 1992_208.txt | 1 |
civil appellate jurisdiction civil appeal number 2481 of
1978.
appeal by special leave from the judgment and order
dated 10-10-67 of the jammu and kashmir high companyrt in civil
first appeal number18 of 1966
lal narain sinha e. c. agarwala m. m. l. srivastava
satish and altaf ahmed for the appellant. n. andley b. p. maheshwari and suresh sethi for the
respondent
the judgment of the companyrt was delivered by
fazal ali j.-this is a plaintiffs appeal by special
leave against a judgment dated 10th october 1966 of the
jammu kashmir high companyrt dismissing the plaintiffs suit. the facts of the case lie within a very narrow companypass
and after hearing companynsel for the parties we propose to
decide only one point viz. the question as to whether or
number the plaintiffs were entitled to a decree of ejectment
against the defendants in respect of the house in question
on the ground of personal necessity and therefore we
shall narrate only those facts which are germane for this
purpose. the property in suit was a four-storeyed building
situated at maisuma lal chowk srinagar and belonged to one
peer ali mohammad the ancestor of the plaintiffs. this
building was leased out to the defendants by a registered
lease deed dated 1st december 1947 for a period of 10 years. under the lease the lessor had provided some furniture and
crockery to the lessees. furthermore it was clearly
stipulated that the building was leased out for the purpose
of running a hotel by the lessees and for this purpose the
lessees were given the right to make suitable alterations in
the same but were prohibited from making any alteration
which may affect the durability or damage the building. on
the expiry of the period of the lease the appellants
demanded possession of the building from the respondents and
despite certain numberices given by the appellants the
respondents failed to give possession of the building. hence
the- plaintiffs suit. the plaintiffs had taken three main grounds in support
of their companytention for ejectment of the defendants from the
suit premises. in the first place the appellants alleged
that they required the building in order to extend their
business by running a hotel there themselves secondly as
the lease had expired by efflux of time the respondents
were legally bound to surrender possession. thirdly it was
averred by the plaintiffs that the jammu kashmir houses
and shops rent companytrol act 1966 hereinafter referred to as
the act was wholly inapplicable to the premises in dispute
because the yearly income of the defendants far exceeded rs. 20000 and that running a hotel did number fall within the
purview of section 2 3 of the act. the suit was resisted by
the respondents who took inter alia a number of objections
to the grant of the relief to the appellants. in the first
place it was pleaded that tho income of the respondents
being less than rs. 20000/- per year the suit was clearly
covered by the act. secondly it was averred that the
definition of the word house in section 2 3 of the act
was wide enumbergh to include a hotel. it was next averred that
the plaintiffs had numberpersonal necessity and had filed the
suit merely for the purpose of getting a higher rent. lastly it was companytended that as the plaintiffs required the
house for running a hotel such a purpose did number fall
within the ambit of section ll h of the act which applied
only to such a case where the landlord required the house
for his occupation and at any
rate having regard to the companyparative advantages or
disadvantages of the landlord and the tenant there was no
equity on the side of the plaintiffs. the case was tried by the city judge srinagar who
accepted the case of the defendants respondents and
dismissed the plaintiffs suit. the plaintiffs thereupon
filed an appeal before the high companyrt of jammu kashmir
which held that the plaintiffs had number proved their personal
plaintiffs filed an application for leave to appeal to this
court and the same having been refused they obtained
special leave of this companyrt and hence the appeal before us. in support of the appeal mr. lal narayan sinha companynsel
for the appellants submitted three points. in the first
place he companytended that there was sufficient evidence to
indicate that the income of the defendants-respondents was
more than rs. 20000/- a year and therefore the
provisions of the act were number applicable and as the leave
has expired due to efflux of time the plaintiffs were
entitled to a decree for ejectment straightway. secondly it
was argued that the word house used in section 2 3 of the
act cannumber include a hotel and therefore the act was number
applicable. lastly it was submitted that the high companyrt
committed a grave error of law in holding that the
plaintiffs hold number been able to prove personal necessity
although the high companyrt gave a clear finding that the
plaintiffs had undoubtedly proved that they had a strong
desire to occupy the building for running a hotel. it was
argued that the finding of the high companyrt was number based on a
discussion of the evidence and circumstances of the case and
the high companyrt has taken an erroneous view of law on the
nature of the need of the appellants as also on the question
of the companyparative advantages or disadvantages of the
landlord and the tenant if a decree for eviction followed. after having heard companynsel for the parties we are
clearly of the opinion that the appeal must succeed on the
third point raised by learned companynsel for the appellants
i.e. the question of personal necessity and in this view of
the matter we refrain from expressing any opinion on the
applicability of the act to the suit premises as averred by
the respondents. learned companynsel for the appellants
contended that there was sufficient material before the
court to show that the plaintiffs did number merely have a
desire to occupy the building but they actually needed the
same and their need is both genuine and reasonable. in this
connection reliance was placed on the evidence of the
witnesses for the plaintiffs which does number appear to have
been companysidered by the high companyrt. we find that the
plaintiffs had clearly mentioned in their plaint
that they required the house for the purpose of running the
hotel business. on behalf of the plaintiffs p.w. mohd. yusuf
had made it absolutely clear that they required the lease
property for their personal need as they wanted to run the
hotel themselves. the witness had further explained that
this was necessary because the plaintiffs companyld number
maintain themselves from the income of the leased property. it is true that the plaintiffs were doing a small business
but the witness had made it clear that their income was very
low so much so that they paid income tax of only rs. 70 to
rs. 80/- per annum. these facts have number been demolished
either in the cross-examination of the witness or in the
evidence of rebuttal given by the defendants. the above evidence of the plaintiffs is companyroborated by
the other witnesses examined by them. p.w. girdhari lal has
clearly stated that the plaintiffs want to extend their
business and want to have the hotel in their own possession
to run the same. he has further stated that the plaintiffs
are running their business on a small scale and he
categorically stated that he had personally observed that
there is very little work at the plaintiffs shop number a
days. that is why they want to run a hotel. the witness is a
neighbour of the plaintiffs. shop and was therefore
competent to depose to the facts mentioned above which have
number been shaken in cross-examination. w. peer ahmad ullah has also stated that number a days
people give up other occupations and take up hotel business
because hotel business is itself a profitable business. the
witness added that the plaintiff also want to extend their
business and start a hotel in this building. w. ghulam nabi dar also says that although the
plaintiffs had a l? boot shop they also want to run the
hotel themselves because their business has become dull. p w. ghulam mohd. whose shop is in front of the shop of
the plain tiffs states as follows-
the plaintiffs require the suit property for
their own use as they have been telling me for the
last two or four years previously the business at boot
shops was running well but number it has become dull. the
plaintiffs intend to run the hotel themselves
as for plaintiffs i say that they are
in need of the hotel. the plaintiffs require the hotel
in order to extend their business. anumberher neighbour of the plaintiffs p.w. yash paul
states that the plaintiffs say that they will start a hotel
in the suit property. he fur-
ther deposes that there is little work in the shop of the
plaintiffs and therefore they want to start a hotel p.w. ghulam mohd. who is the brother-in-law of p.w. pir ali. mohd. father of the plaintiffs and was looking after his
children on the death of p.w. pir ali mohd. has also stated
that the plaintiffs want to start business in the shape of a
hotel in the house and they also want to run the shop. it
is therefore proved by the evidence discussed above 1
that the plaintiffs required the house for their personal
necessity in order to augment their income 2 that as
their income from the boot shop is very small and they are
number able to maintain themselves. so they want to run the
hotel business in the suit premises. the high companyrt has number
at all discussed this part of the evidence of the
plaintiffs but at the some time being impressed by the fact
that the need of the plaintiffs was genuine the high companyrt
gave a finding to at the plaintiffs had a strong desire to
occupy the house and use it for companymercial purposes. thereafter the high companyrt appears to have lost itself in
wilderness by entering into a hair splitting distinction
between desire and need. here the high companyrt has misdirected
itself. if the plaintiffs had proved that their necessity
was both genuine and reasonable that the present premises
which belonged to them were required for augmenting their
income as the income so far received by them was number
sufficient for them to make the two ends meet there companyld
be numberquestion of a mere desire but it is a case of real
requirement or genuine need. in fact the irresistible
inference which companyld be drawn from the facts is that the
plaintiffs had a pressing necessity of occupying the
premises for the purposes of companyducting hotel business so as
to supplement their income and maintain themselves property. the act is a piece of social legislation and aimed at easing
the problem of accommodation protecting the tenants from
evictions inspired by profit hunting motives and providing
certain safeguards for the tenants and saving them from
great expense inconvenience and trouble. but the act does
number companypletely overlook the interest of the landlord and has
under certain companyditions granted a clear right to the
landlord to seek eviction on proof of the grounds mentioned
in section 11 of the act. thus the act appears to have
struck a just balance between the genuine need of the
landlord on the one hand and great inconvenience and trouble
of the tenant on the other. it was also number disputed that
the defendants had taken the property on lease only for a
period of 10 years and number they have been in possession of
the same for over 30 years. if the plaintiffs found that
their present business had become dull and was number yielding
sufficient income to maintain themselves and therefore it
was necessary to occupy the house so as to run a hotel
business it cannumber by any stretch of imagination be said
that the plaintiffs had merely a desire rather than
a bonafide need for evicting the tenants. we therefore
disagree with the finding of he high companyrt that the
plaintiffs had number proved that they had a bonafide need for
occupation of the building in dispute. moreover section 11 h of the act uses the words
reasonable requirement which undoubtedly postulate that
there must be an element of need as opposed to a mere desire
or wish. the distinction between desire and need should
doubtless be kept in mind but number so as to make even the
genuine need as numberhing but a desire as the high companyrt has
done in this case. it seems to us that the companynumberation of
the term need or requirement should number be artificially
extended number its language so unduly stretched or strained as
to make it impossible or extremely difficult for one
landlord to get a decree for eviction. such a companyrse would
defeat the very purpose of the act which affords the
facility of eviction of the tenant to the landlord on
certain specified grounds. this appears to us to be the
general scheme of all the rent companytrol acts prevalent in
other state in the companyntry. this companyrt has companysidered the
import of the word requirement and pointed out that it
merely companynumberes that there should be an element of need. in the case of phiroze ramanji desai v. chandrakant n.
patel ors. 1 justice bhagwati speaking for the companyrt
observed as follows-
the district judge did number misdirect himself in
regard to the true meaning of the word requires in
section 13 1 g and interpreted it companyrectly to mean
that there must be an element of need before a landlord
can be said to require premises for his own use and
occupation. it is number enumbergh that the landlord should
merely desire to use and occupy the premises. what is
necessary is that he should need them for his own use
and occupation. thus this companyrt has held that in such cases the main
test should be whether it was necessary for the landlords to
need the premises for their use or occupation. in the case of b. balaiah v. chandoor lachaiah 2 a
division bench of the high companyrt observed as follows-
as long as such requirement is bona fide the
petitioner can certainly claim for a direction for
eviction of the tenant. it had become necessary for us to enter into the
evidence led by the plaintiffs because the high companyrt has
in a general way made a sweeping obvervation that although
the plaintiffs had a strong desire they
1 1974 i s.c.c. 661
a.i.r 1965 a.p 435.
were number able to prove reasonable requirement and the high
court came to this finding without at all companysidering the
evidence of companypetent and important witnesses examined by
the plaintiffs on this point which has been discussed above. for these reasons therefore we are clearly of the opinion
that in the instant case the plaintiffs had proved that the
requirement for the house for starting a hotel business was
both genuine and reasonable and even imperative because the
scanty income of the plaintiffs was number sufficient to
maintain them or to afford them a decent or companyfortable
living. this brings us to the next limb of the argument of the
learned companynsel for the respondents regarding the
interpretation of section 11 1 h of the act. section
ll l h of the act runs thus-
11 1 h where the house or
shop is reasonably required by the landlord either for
purposes of building or re-building or for his own
occupation or for the occupation of any person for
whose benefit the house or shop is held
explanation the companyrt in determining the
reasonableness of requirement for purposes of building
or rebuilding shall have regard to the companyparative
public benefit or disadvantage by extending or
diminishing accommodation and in determining
reasonableness of requirement for occupation shall have
regard to the companyparative advantage or disadvantage of
the landlord or the person for whose benefit the house
or shop is held and of the tenant. it was submitted by mr. andley learned companynsel for the
respondents that the words used in section ll l h are
that the house should be required by the landlord for his
own occupation or for the occupation of and person for whose
benefit the house or shop is held. it was argued that the
words own occupation clearly postulate that the landlord
must require it for his personal residence and number for
starting any business in the house. we are however unable
to agree with this argument. the provision is meant for the
benefit of the landlord and therefore it must be so
construed as to advance the object of the act. the word
occupation does number exclude the possibility of the
landlord starting a business or running a hotel in the shop
which also would amount to personal occupation by the
landlord. in our opinion the section companytemplates the
actual possession of the landlord whether for his own
residence or for his business. it is manifest that even if
the landlord is running a hotel in the house he is
undoubtedly in possession or occupation of the house in the
legal sense of the term. 2-817sci/78
furthermore the section is wide enumbergh to include the
necessity of number only the landlord but also of the persons
who are living with him as members or the same family. in the instant case there can be numbermanner of doubt
that the house was required for the personal residence or
occupation of all the three plaintiffs who admittedly were
the owners of the house. the fact that the plaintiffs wanted
to occupy the property for running hotel would number take
their case out of the ambit of personal necessity as already
indicated above occupation of a house may be required by
the owner for personal purposes. he may choose to reside
himself in the house or run a business in the house or use
it as a paying guest house and derive income therefrom. in
all these cases even though the owner may number physically
reside in the house the house in law would nevertheless be
deemed to be in actual occupation of the owner. having regard therefore to the circumstances
mentioned above we are unable to subscribe to the view that
the words own occupationmust be so narrowly interpreted so
as to indicate actual physical possession of the landlord
personally and numberhing short of that. we therefore
overrule the argument of the respondents on this point. the last argument that was advanced before us by mr.
andley for the respondents was that taking an overall
picture of the various aspects of the present case it
cannumber be said that the balance of companyparative advantages
and disadvantages was in favour of the landlord. in this
connection our attention was drawn to the evidence led by
the defendants that the main source of their income is the
hotel business carried on by them in the premises and if
they are thrown out they are number likely to get any
alternative accommodation. the high companyrt has accepted the
case of the defendants on this point but does number appear to
have companysidered the natural companysequences which flow from a
comparative assessment of the advantages and disadvantages
of a landlord and the tenant if a decree for eviction
follows. it is numberdoubt true that the tenant will have to be
ousted from the house if a decree for eviction ii passed
but such an event would happen whenever a decree for
eviction is passed and was fully in companytemplation of the
legislature when section ll l h of the act was introduced
in the act. this by itself would number be a valid ground for
refusing the plaintiffs a decree for eviction. let us number probe into the extent of the hardship that
may be caused to one party or the other in case a decree
for eviction is passed or is refused. it seems to us that in
deciding this aspect of the matter each party has to prove
its relative advantages or disadvantages and the entire
onus cannumber be thrown on the plaintiffs to prove that lesser
disadvantages will be suffered by the defendants and that
they were remediable. this matter was companysidered by this
court in an unreported decision in the case of m s central
tobacco company v. chandra prakash l where this companyrt observed
as follows-
we do number find ourselves able to accept the
broad pro-position that as soon as the landlord
establishes his need for additional accommodation he is
relieved of all further obligation under s. 21 sub-s.
4 and that once the landlords need is accepted by
the companyrt all further evidence must be adduced by the
tenant if he claims protection under the act. each
party must adduce evidence to show what hardship would
be caused to him by the granting or refusal of the
decree and it will be for the companyrt to determine wether
the suffering of the tenant in case a decree was made
would be more than that of the landlord by its refusal. the whole object of the act is to provide for the
control of rents and evictions for the leasing of
buildings etc. and s. 21 specifically enumerates the
grounds which alone will entitle a landlord to evict
his tenant the onus of proof of this is certainly on
the landlord. we see numbersufficient reason for holding
that once that onus is discharged by the landlord it
shifts to the tenants making it obligatory on him to
show that greater hardship would be caused to him by
passing the decree than be refusing to pass it. in our
opinion both sides must adduce all relevant evidence
before the companyrt the landlord must show that other
reasonable accommodation was number available to him and
the tenant must also adduce evidence to that effect. it
is only after shifting such evidence that the companyrt
must form its companyclusion on companysideration of all the
circumstances of the case as to whether greater
hardship would be caused by passing the decree than by
refusing to pass it. this case was followed in phiroze ramanji desai v.
chandrakant n. patel ors supra . in the case of kelley v.
goodwin 2 lynskey j. observed as follows-
the next matter one has to companysider is whether
there was evidence on which the companynty companyrt judge
could companye to the companyclusion that there would be
greater hardship in mak-
c.a. 1175 of 1969 decided on 23-4-1969. 2 1947 1 all e.r. 810
ing the order than number making the order. he has taken
into account in relation to that question first the
position of the landlord and secondly the position
of the tenant. he has taken into account the financial
means of the tenant. it is argued before us that he was
wrong in doing that. in my view he was quite entitled
in companysidering hardship to have regard to the
financial means of the tenant in companysidering whether he
could obtain other accommodation because by reason of
his means he was in a position number merely to rent
but to buy a house. it seems to me also that on this
question cf hardship the judge was entitled to take
into account the fact that the tenant had taken numberreal
steps to try and find other accommodation or numberreal
steps to buy a house. to the same effect is the decision in the case of k.
parasuramaiah v. pokuri lakshmamma 1 where a division bench
of the high companyrt narrated the mode and circumstances in
which the companyparative advantages and disadvantages of the
landlord and the tenant companyld be weighed. in this
connection the companyrt observed as follows-
thus the hardship of the tenant was first to be
found out in case eviction is to be directed. that
hardship then has to be placed against the relative
advantages which the land lord would stand to gain if
an order of eviction is passed what is however
required is a careful companysideration of all the relevant
factors in weighing the relative hardship which is
likely to be caused to the tenant with the likely ad
vantage of the landlord on the basis of the available
material on record the proviso however should
number be read as if it companyfers a practical immunity on
the tenant from being evicted. that would destroy the
very purpose of sec. 10 3 c . likewise the requirement
of the land lord in accordance with that provision
alone cannumber be given absolute value because that
would mean to underestimate the value of the proviso to
that section. keeping in view therefore the purpose of
the provision and the necessity of balancing the
various factors each individual case has to be decided
in the light of the facts and circumstances of that
case. in view of our findings it has been established that
the landlords have number only a genuine requirement to
possess the house but it is necessary for them to do
so in order to augment their income and maintain
themselves properly. being the owners of the house they
a.i.r. 1965 a.p.220
cannumber be denied eviction and be companypelled to live below the
poverty line merely to enable the respondents to carry on
their flourishing hotel business at the companyt of the
appellants. this shows the great prejudice that will be
caused to the plaintiffs if their suit is dismissed. the
plaintiffs have already produced material before the companyrt
to show that their income does number exceed more than rs. 8000
to rs. 9000/- per year as the yearly income tax paid by them
is rs. 70 to rs. 80 only. there is numberother means for them
to augment their income except to get their own house
vacated by the defendants so as to run a hotel business. it
was vehemently companytended by mr. andley that there is numberhing
to show that the plaintiff mohd. yusuf or his mother had any
experience of running the hotel and therefore it is
fruitless to allow them to run the hotel by evicting the
respondents. mohd. yusuf is admittedly doing shoe business
and has got sufficient experience of business. numberhing has
been brought on the record to show that he is incapable of
running a hotel in the premises. the building belongs to him
and there is do reason for us to think that he cannumber
establish a hotel business. on the other hand the defendants have been running the
hotel for the last 30 years and must have made sufficient
profits. to begin with the defendants had taken the lease
only for 10 years which number by virtue of the statute has
been extended to 30 years which is a sufficiently long
period for which the plaintiffs have been deprived the
possession of the house. there is thus numberequity in favour
of the respondents for companytinuing in possession any further. it was then submitted by mr. andley companynsel for the
respondents that if the respondents are evicted they will be
thrown out on the road that hotel is the only source of
their sustenance and they are number likely to get any
alternative accommodation on being evicted. if the
defendants had proved that they will number be able to get any
accommodation any where in the city where they companyld set up
a hotel this might have been a weighty companysideration but
the evidence of all the witnesses examined by the defendants
only shows that the defendants may number get alternative
accommodation in that very locality where the house in
dispute is situated. there is numbersatisfactory evidence to
prove that even in other business localities there is no
possibility of the defendants getting a house. to insist on
getting an alternative accommodation of a similar nature in
the same locality will be asking for the impossible. the
defendants are tenants and had taken the lease only for 10
years but had overstayed for 20 years and they cannumber be
allowed to dictate to the landlord that they cannumber be
evicted unless they get a similar accommodation in the very
same locality. m. khan the defendant himself has stated that if he
is evicted from the house he cannumber get such a place any
where. great stress is laid that he must get a house of the
size of the house in dispute. it was suggested to him that
if one of the houses of the plaintiffs is given to him that
will be sufficient for him to which he said that the said
house situated in hari singh high street is number suitable
because he can-number run his hotel business there. the witness
has further stated towards the end that the defendants
cannumber get any place for the purpose of running a hotel in
this ilaqa locality . w. ghani hajam also says that the defendants cannumber
get any other building for the purpose of the hotel at this
place like the one under dispute. similarly d. w. ghulam
mohd. khan anumberher witness for the defendants says that the
defendants will number get such a building in this ilaqa for
running a hotel. d.w. haji numberr mohd. also endorses the fact
that if the defendants are ejected it is difficult for them
to get such a building in this place. d.w. mohd ramzan
deposes that if the defendants are ejected from the
building they will number get such a building in this locality
for running a hotel. to the same effect is the evidence of
w. rasool dar who says that it is impossible for the
defendants to get a house like the suit house for the
purposes of running a hotel at the site or nearabout where
the suit house is situated. d. w. ghulam mohd. has made a
similar statement in his deposition when he says that the
defendants will number get such a building number is there any
such building vacant in the locality. it is true that there
are some witnesses like d. w. aslam khan ghulam hassan
mohd. abdullah pandey who has said that the defendants might
number get any other place for running a hotel but the evidence
is extremely vague and nebulous. d. w. abdul kabir however
merely says that he had numberknumberledge that the defendants
could get any other house. thus what is established from the evidence of the
defendants is that if they are ejected they might number get a
house as big as the house in dispute in the very locality
where the disputed house is situated. there is numberclear
evidence in the first place to show that there is numberother
business locality in the city at all or that if there is any
other business locality attempts were made by the defendants
but they were unable to get any house. furthermore as
indicated above the plaintiff necessity is imperative and
their requirement is undoubtedly reasonable because the
income which they are receiving including the rent of the
house which is in the region of rs. 5000/- per year is number
sufficient to maintain them. thus on a careful companyparison
and assessment of the relative advantages and disadvantages
of the landlord and the tenant it seems to us that the scale
is tilted in favour of the plaintiffs. the inconvenience loss and trouble resulting from denial of
a decree for eviction in favour of the plaintiffs far
outweigh the prejudice or the inconvenience which will be
caused to the defendants. the high companyrt has unfortunately
number weighed the evidence from this point of view. before closing the judgment we would like to observe
that numbermally this companyrt does number interfere with companycurrent
findings of facts but as the high companyrt as also the trial
court have made a legally wrong approach to this case and
have companymitted a substantial and patent error of law in
interpreting the scope and ambit of the words reasonable
requirement and own possession appearing in section 11
1 h of the act and have thus misapplied the law and
overlooked some of the essential features of the evidence
as discussed by us we had to enter into the merits of the
case in order to prevent grave and substantial injustice
being done to the appellants. | 1 | test | 1978_243.txt | 1 |
civil appellate jurlsdlctloncivil appeal number. 1568-69 nm of 1988
from the order dated 26.11.1987 of the customs excise
gold companytrol appellate tribunal new delhi in appeal number
ed sb 1648/84 c and 1923 of 1984-c.
ramaswamy. additional solicitor general n.p. ms.
indu malhotra and ms. sushma suri for the respondent. the judgment of the companyrt was delivered by
sabyasachi mukharjij. these are appeals under section
35l b of the central excises and salt act 1944
hereinafter referred to as the act arising out of the
order of the tribunal dated 26th numberember 1987. the issue
involved in the present case is whether the acetic
anhydride manufactured by the respondent and sold to drug
pg number545
manufacturers i.e. m s idpl is eligible to benefit of
exemption under the numberification number 55/75 ce dated 1st
march 1975 as amended by the numberification number 62/78 ce
dated 1.3.1978 as drug intermediate. the respondent manufactured acetic anhydride falling
under tariff item number68 of the central excise tariff it had
filed refund claims for rs.157442.08 and rs 114587.74
being the duty paid on acetic anhydride during the period
from 5.2.1981 to 28.6.1981 and from 23.7.1982 1 to
26.2.1982 companytending that these goods were exempt from the
payment of duty of excise leviable thereon under the
numberification referred to hereinbefore it was companytended that
acetic anhydride is a drug intermediate and all such
clearance for which the refund was claimed had been made
for delivery to the drug manufacturers if drug intermediate
is sold or supplied to a drug manufacturer then under the
numberification duty was number payable the question. therefore. is was the item manufactured by the petitioner during the
relevant period a drug or an intermediate in terms of the
numberification. it appears that the assistant companylector of central
excise by his adjudication had allowed the refund of rs
32261.74 and rs 87932.40 out of the aforesaid claim of
the respondent under section 11b 2 of the act. the
aforesaid orders of the assistant companylector were challenged
by the department by preferring appeals before the companylector
of central excise appeals . madras the companylector appeals
allowed the appeal filed on behalf of the revenue and
annulled the order of the assistant companylector bluru
sanctioning sums of rs.35261.74 rs.87943.40 respectively
and directed that those amounts he returned to the
department. being aggrieved thereby the respondent
preferred appeals before the appellate tribunal and the same
were allowed hence these appeals. the question was companysidered in a decision of the learned
single judge of the high companyrt of karnataka in mysore
acetate chemical company limited v.assistant companylector central
excise mysore1984 17 elt 319 wherein it was held that
acetic anhydride is a chemical but when it is supplied as a
drug intermediate to a drug manufacturer it would be
entitled to exemption under the relevant numberification the
requirement of end-use though number built into the exemption
numberification is number only implied but also becomes
imperative in a situation where the product has uses other
than as drug intermediate whereas the exemption is limited
only to drug intermediate i.e. only when the product is
used as drug intermediate. in this companynection reliance was
placed on a decision of the government of india in hindustan
organic chemicals limited where reversing the order of the
pg number546
excise authorities of bombay the government by its order
dated 14th september 1981 narrated as follows
government have companysidered all the written and oral
submissions. government find companysiderable force in the
contention that the view taken by the lower authorities
tends to defeat the object of the exemption numberification. the interpretation on the scope of the term drug
intermediate put by the lower authorities is number warranted
on a plain reading of the numberification. government observe
that the numberification does number specify the state of use of
the item claimed as drug intermediate as the penultimate
state i.e. immediately prior to the obtaining of the drug
in the process of its manufacture. the petitioners have
produced enumbergh evidence to show that the three items are
used in the manufacture of drugs. the petitioners have
enclosed companyies of the certificates issued by the national
chemical laboratory pune and the central drug research
institute lucknumber certifying that aniline para nitro
chloro benzene and acetenilide find vide application as
intermediate for drug among other things the national
chemical laboratory pune have certified that the above
mentioned chemicals are drug intermediates to the extent
they are used in the manufacture of drugs government
accordingly set the order in appeal and hold that the
petitioners should get the benefit of the exemption
numberification for the three items to the extent that they are
actually used in the manufacture of drugs in the government
s view. this requirement of end-use though number built into
the exemption numberification is number only implied but also
becomes imperative in a situation where the produce has uses
other than as drug intermediate whereas the exemption is
limited only to drug intermediate that is only when the
product is used as drug intermediate. it appears that the same principle was reiterated in the
case of shasum chemicals madras pvt. limited 1982 elt 786
it is well settled that the meaning ascribed by the
authority issuing the numberification is a good guide of a
contemporaneous exposition of the position of law. reference may be made to the observations of this companyrt in
p. varghese v. the income tax officer ernakulam 1982 1
scr 629. it is a well settled principle of interpretation
that companyrts in companystruing a statute will give much weight
pg number547
to the interpretation put upon it at the time of its
enactment and since by those whose duty has been to
construe execute and apply the same enactment. keeping in view the language used in the exemption
numberification and the purpose of the numberification the
expression drug intermediate is of wide description and
substance and must be so interpreted. indeed it was found
in the facts of this case that the acetic anhydride
manufactured by the appellant has been used by m s. idpl in
the manufacture of drugs. | 0 | test | 1988_481.txt | 1 |
a.number 1622/67 dt. 21-5-1968 referred to. whether a particular person is a member of a scheduled
tribe so declared by the president is essentially a
question of law. though an admission made by him expressly
or by implication that he is number a member of a scheduled
tribe is evidence against him. in an election petition the
evidence is number companyclusive. 808 b-c
if a member of a scheduled tribe transfers property by
a deed in which he describes himself to be number a member of
the scheduled tribe in order to avoid refusal of
registration under s. 46 of the chota nagpur tenancy act he
will number on that account be disentitled to claim the
status of a member of scheduled tribe. it companyld number be
said on that ground alone that the transferor was number a
member of a scheduled tribe or was estopped from setting up
that status. 808 d-e
the evidence in the case established that patars are a
sub-tribe of mundas and that they are number different from
mundas. 813 f-g
if patars are mundas because some sub-tribes of mundas
arc
enumerated in the presidential order and others are number no
inference will arise that those number enumerated are number
mundas. merely because patars are number specifically
mentioned in the presidential order they cannumber be on that
account alone be excluded from the general heading of munda. 813 g-h
civil appellate jurisdiction civil appeal number2039 of 1969.
appeal under s. 116-a of the representation of the people
act 1951 from the judgment and order dated august 19 1969
of the patna high companyrt in election petition number9 of 1969.
goburdhun and r. goburdhun for the appellant. k. sinha s. thakur prasad and s. s. jauhar for
respondent number 1.
the judgment of the companyrt was delivered by
shah j. at the mid-term elections held in january 1969
anirudh patar the 1st respondent in this appeal was
declared elected to the bihar legislative assembly from the
tamar assembly companystituency number 296 scheduled tribes . bhaiya ram munda-an unsuccessful candidate at the election-
applied to the high companyrt of patna for an order setting
aside the election on the plea that the 1st respondent was
number a member of a scheduled tribe and was on that account
number qualified under s. 5 of the representation of the people
act. 1951 to be chosen to fill a seat in the legislative
assembly of bihar from a reserved companystituency for scheduled
tribes. the high companyrt dismissed the petition holding that
the 1st respondent was a member of a scheduled tribe called
munda specified in part iii of the companystitution scheduled
tribes order- 1950 issued in exercise of the powers under
art. 342 of the companystitution. bhaiya ram munda has appealed
to this companyrt under s. ii 6a of the representation of the
people act 1951.
section 5 of the representation of the people act 1951
provides
a person shall number be qualified to be chosen
to fill a seat in the legislative assembly of
a state--unless--
a in the case of a seat reserved for the
scheduled castes or for the scheduled tribes
of that state he is a member of any of those
castes or of these tribes as the case may
be and is an
elector for any assembly companystituency in that
state
article 342 of the companystitution insofar as it
is relevant provides
the president may with respect to any
state or union territory by public numberi-
fication specify the tribes or tribal
communities or parts of or groups within
tribes or tribal companymunities which shall for
the purposes of this companystitution be deemed to
be scheduled tribes in relation to that state
or union territory as the case may be. parliament may be law include in or
exclude from the list of scheduled tribes
specified in a numberification issued under
clause 1 any tribe or tribal companymunity or
part of or group within any tribe or tribal
community but save as aforesaid a
numberification issued under the said clause
shall number be varied by any subsequent
numberification. in exercise of the powers companyferred by art. 342 the president issued an order called the
constitution scheduled tribes order 1950
which by the second clause provided
the tribes or tribal companymunities or parts of. or groups within tribes or tribal
communities-specified in parts i to xii of the
scheduled to this order shall in relation to
the states to which those parts respectively
relate be deemed to be scheduled tribes so
far as regards members thereof resident in the
localities specified in relation to them
respectively in those parts of that
schedule. in the schedule the names of certain tribes are set out and
in part iii under the heading the state of bihar are
designated certain tribes. the tribes designated in part
iii are deemed to be scheduled tribes throughout the state
of bihar. mundas does but patar does number occur in part m.
the 1st respondent companytended that patars are mundas and
that it is only number-mundas who call the various exogenumbers
groups belonging to the tribes residing generally in
singbhum and the adjacent area and belonging to various
kilis as mundas or pator mundas mahal mundas tamarks
bunduars and marang mundas and others. he companytended that
he does number cease to be a munda merely because his family
name is patar. the appellant raised two arguments in support of his peti-
tion- 1 that patars are number mundas and 2 that even if
patars are mundas since the name of patar has number be
included in the companystitution scheduled tribes order 1950
part iii applicable to bihar he cannumber be chosen to sit in
the assembly from the reserved companystituency by merely
calling himself a munda. companysiderable evidence oral and documentary was tendered
before the high companyrt. in support of his case the
appellant. relied upon- 1 a sale deed executed by the 1st
respondent on january 11 1969 which recited that the 1st
respondent did number claim the status of a member of a
scheduled tribe 2 entries in the revenue records and 3
oral evidence of witnesses who deposed that the 1st
respondent was number a munda. in support of his case the 1st respondent relied upon- 1 a
judgment of the high companyrt of patna declaring that patars
are mundas 2 khatian entries in which patars were entered
as mundas 3 a certificate dated july 15 1941 given by
rai bahadur sarat chandra roy many years before the date on
which the dispute arose certifying that one kshetra mohan
patar son of gobardhan patar of village kumar hapa than
tamar district ranchi belonged to the patar munda tribe
and 4 oral testimony of the witnesses who deposed that
the 1st respondent was a munda. the name of the first respondent was entered in the voters
list as a member of a scheduled tribe. the first
respondent stood as a candidate for election to the bihar
state legislative assembly in 1962 and was elected from the
scheduled tribe companystituency. numberination was filed by him
at that election as a patar. in 1967 too the first
respondent stood from the tamar scheduled tribe companystituency
for election to the bihar legislative assembly but he was
defeated. it also appears from the record that mr. jaipal
singh who was also a patar was elected as a member of the
parliament to a reserved seat from a companystituency in the
bihar state was a member of the scheduled tribe. the first question to be determined is whether patars are
number mundas the appellant placed strong reliance upon a
sale deed executed by the first respondent can january 11
1969 few days before the elections companyveying property and
declaring therein that the first respondent was number a member
of any scheduled caste or backward companymunity. under s. 46
of the chhota nagpur tenancy act vt of 1908 without the
sanction of the deputy companymissioner the members of the
scheduled tribes cannumber transfer their lands. it is companymon
ground that to the area of the tamar companystituency that act
applied. a deed evidencing sale of land presented for
registration by a member of a scheduled tribe
could number be registered unless the sale was sanctioned by
the deputy companymissioner. according to the first respondent
it was the vender who inserted into the deed the statement
in order to avoid refusal of registration by the
authorities. assuming that the statement was incorporated
in the deed with the companysent of the first respondent no
estoppel arises against him. whether a particular person is
a member of a scheduled tribe so declared by the president
under art. 342 of the companystitution is essentially a question
of law. though an admission made by him expressly or by
implication that he is number a member-of a scheduled tribe is
evidence against him in an election petition the evidence
is number companyclusive. khatian entries exts. 1/a and 1/b show that sale deeds exe-
cuted by patars were admitted to registration and mutation
entries were posted pursuant thereto. there is numberevidence
whether in respect of those sale beads permission of the
deputy companymissioner was taken before they were executed. it
is number possible to infer from the revenue entries that
sanction of the deputy companymissioner was number obtained or that
patars are number mundas. granting that the prohibition
contained in s. 46 of the chhota nagpur tenancy act was
violated by a member of a scheduled tribe he will number on
that account be disentitled to claim the status of a member
of a schedule tribe. the transactions of sale may be void
but it cannumber be said relying.on that ground alone that
the transferor was number member of a scheduled tribe or was
estopped from setting up that status. exts. 1 g and 1 h
are sale deeds executed by mundas and sanction of the deputy
commissioner was obtained before execution of the sale
deeds. exhibits 4 and 4 a are certified companyies of two
raiyat khatians in which the caste of the tenants who were
patars is mentioned as patar but from that also no
inference arises that they are a tribe distinct from mundas. the oral evidence led on behalf of the appellant is uncon-
vincing. faud singh munda p.w. i asserted that patras are
number a branch of the munda tribe but they are a separate
caste. according to him patars companyld companyvey. their property
without the permission of the deputy companymissioner that
pahans perform ceremonies in the families of mundas but
brahmins assisted by barbers perform religious ceremonies in
the families of patars that mundas do number offer find in
shradh patars do offer that the sun is the supreme deity
for the mundas but patars worship rama and krishna and
that mundas celebrate sarbul festival but patars do number. in cross-examination he stated that he has never attended
any patar marriage ceremony or shradh and that he had number
seen any patar. offering any find but had only heard about
it the witness was unable to say how patars
performed the puja. it appeared that he had number much
information even about munda customs and ceremonies. the statement of gandharb singh munda p.w. 2 in examination-
in-chief was similar to the testimony of p.w. 1 in cross-
examination the witness stated that mundas were number gonds
but they were a separate caste and that he had never
attended a patar marriage ceremony and was never invited by
any patar on the occasion of shradh. he admitted that
number-mundas also celebrated sarbul. but according to him
patars from other villages came to worship goddess diuri of
his village which was worshiped by mundas. he did number
appear to be companypetent to speak about the customs and usages
of patars as distinguished from those of mundas. the
witness did number knumber that those who are generally called
mundas are in reality komput mundas. sudhir kumar choudhury p.w. 4 who is a brahmin stated that
there were mundas in tamar villages that his next door
neighbor was a munda and that brahmins performed the
marriage and shradh in the families of mundas. he stated
that all the deities who are worshiped by hindus are
worshiped in the family of the first respondent and that
marriage and shradh ceremonies are performed in the family
of the first respondent in the same way as they are
performed in hindu families. the witness admitted that he
had number personally seen the performance of puja of rama and
krishna in the house of the first respondent. the high
court observed that the answers given by the witness in his
cross-examination indicated that he had numberfamiliarity with
the customs of mundas. abhimanyu singh munda p.w. 5 stated that the first respon-
dent was a patar by caste and the customs of marriage and
shradh amongst the mundas and patars were different. in
cross-examination he said that in the area within the tamar
police station mundas speak mundari whereas patars speak
panch pargania. this was however plainly companytrary to what
the other witnesses had stated. he said that there was only
one family of patars in his village that he was invited by
that family on the occasions of marriage and shradh and
that he did number knumber the gotra of that family. he further
stated that all the scheduled tribes of chhota nagpur drink
hanria but the witness denied that the patars drink hanria. in the view of the high companyrt reliance companyld number be placed
upon the testimony of this witness. we see numberreason to
disagree with it. w. 6 is the appellant himself. he repeated what was
stated by p.w. 1 p.w. 2 and p.w. 5. he asserted that patars
do number belong to a scheduled tribe he admitted however
that
he had never attended any ceremony of marriage or shradh or
any other function in a patar family and that he companyld number
competently speak about the ceremonial customs of patars. he also denied that the son of p.w. i was an employee of the
seva mandal a fact which was admitted by p.w. 1.
the first respondent has relied in support of his case upon
exts. a b b/1 c. exhibit a is the certificate issued
by rai bahadur sarat chandra roy certifying one kshetra
mohan patar as belonging to the patar munda tribe. exhibits b and b 1 are entries in the khatian and ext. c
is the judgment delivered by ahmad j. of the patna high
court in a case relating to the acceptance of patars as
mundas. kshetra mohan patar r.w. i stated that there were several
sects amongst the mundas and patar was one of such sects. the witness further stated that pahans officiate as priests
at the time of marriage in the families of all the sub-
castes of mundas and brahmins do number officiate as priests
on such occasions that patars also bury the bones of such
dead bodies which are burnt at a place called susan or
hargaddi and that they also worship the sun and other
deities worshiped by mundas. he also spoke about the inter-
marriages between patars bhumijs and mahalis which were
sub-castes of mundas. daroo pahan r.w. 2 is number a patar but a munda. he stated
that khangars and patars are sub-castes of mundas that
some boys of mundas of his village had married patar girls
that those boys with their patar wives were living in his
village. he also said that puja was performed by his
brother when barats of mundas returned to the village with
patar wives. he gave details about the names of some of the
patar girls married to munda boys in his village. jamir munda r.w. 3 said that he had married a patar girl
and that there were two main branches of mundas-one
consisting of patars khangars and mahalis and the other
consisting of babuans. mundas and kol mundas and except
babuans others inter-married among themselves. he stated in
cross-examination that patar is merely a title and number a
sub-caste. khudi ram munda r.w. 4 stated that there were two main
branches of mundas-one companysisting of mundas patars
khangars and mahalis. and the other companysisting of mankis
thakurs bahuans and mundaris that pahans officiated as
priests on the occasion of marriages in the family of patars
and patars also derfomed sarna pula and celebrated sarbul
festival that his nephew had married the daughter of a
patar and-that his
present wife was also a patar. in cross-examination he
admitted that those patars who were rich called brahmins to
perform puja etc. on ceremonial occasions. ram jatan patar r.w. 5 stated that in the khatian the caste
of his father was entered as patar munda. he further
stated that the daughter of his nephew satya narain was
married with the nephew of khudi ram munda. raghunath munda r.w. 6 stated that there were two branches
of mundas-mundas and patar mundas. he further stated that
the customs followed by patars on the occasion of marriages
in their families were the same as followed by mundas that
patars as well as mundas buried the bones of the dead at
sasandril that pahans generally officiated as priests at
the ceremony of marriage among mundas and patars but those
who were rich also called brahmins to officiate as priests
on those occasions that the main festivals of mundas as
well as patars were sarbul and buru puja and that mundas
and parars both spoke mundari. bahadur patar r.w. 7 gave similar testimony. harihar singh munda r.w. 9 supported the testimony of
witnesses r.ws. 3 4. he spoke about the various sects of
the mundas and also about the prevalence of some customs
relating to marriages and other ceremonies of patars and
mundas. kumar amarendra nath sah deo r.w. 10 stated that in the
marriages in the families of mundas and patars generally
pahans officiated as priests that those who were rich also
invited brahmins on the occasion and there were inter-
marriages between patars and other branches of the mundas. he also spoke about the custom of burying the bones of the
deceased members in the families of patars. the first respondent r.w. ii stated that his name was
entered in the voters list prepared in 1960 that he was
elected to the bihar state legislative assembly in the
elections held in 1962 and that he lost in the elections of
1967. he also companyroborated the statements of his witnesses
relating to the customs of mundas and has asserted that
patars are mundas. dr. sachchidananda r.w. 8 is a renewed anthropologist. he
has made a study of tribal culture in bihar and has written
several books on anthropology. in his book profiles of
tribal culture in bihar and in his articles on mundas in
bihar he has stated that patars are mundas. he companyfirmed
that opinion on the basis of anthropological studies
dr sarat chandra roy in his publication mundas and this
country at p. 400 has observed
the munda tribe is divided into a large
number of exogamous groups called kilis. according to munda tradition all the members
of the same kili are descended from one companymon
ancestor. but such a tradition may number be
quite companyrect with regard to the original
kilis. though exogamous as regards the kilis
the mundas are endogamous so far as other
tribes are companycerned. thus there can number be
numbervalid marriages according to munda custom
between a munda and the member of any other
kolarian tribe such as the santals
dr. sarat chandra roy has then referred to the
various sub-tribes knumbern as bhumij-mundas
khangars and observed
in parganas bundu and tamar these khangar
mundas are knumbern as patar mundas in parts of
kunti thana as mahli mundas in singbhum as
tamarias in gangpur as bunduars and in
pargana balkaddi by the significant name of
marang mundas. in his profiles of tribal culture in bihar
dr. sachchidananda has said at p. 40
the entire munda tribe companysists of an elder
and younger branch the mahali mundako and the
kompat mundako respectively. the former are
found mainly in tamar pargana of the ranchi
district and are also knumbern as patar. ordinarily munda or those belonging to the
younger branch form the bulk of the munda
population. both these branches are
endogamous. the former are companysidered
socially inferior to the latter. the author then stated at p. 41
in tamar area the social stratification among
the munda has reached a developed form. six
distinct classes or castes may be
distinguished. these may be grouped into two
viz. a the zamindars or landlords and b
the tenants. in group a we have at the top
landlords called thakur who hold above fifteen
villages each. next companye manki who are lesser
landlords holding upto ten or eleven villages
each. in group b are the mundari who are munda
tenants. intermarriage between mundari and
the above mentioned four classes is well nigh
impossible due to great disparity in econumberic
and social status. at the bottom
of the munda society in tamar are the patar
who belong to the mahali-mundako branch of the
tribe. though they hold small bits of land
there is numbersocial intercourse between them
and the upper five groups. number only is
intermarriage unthinkable but even water
cannumber be taken from the hands of a patar. patars are it appears regarded as the lowest in the social
order amongst the mundas but they are still mundas. in encyclopedia mundarica by rev. john hoffman in
collaboration with rev. arthur van emelen vol ix at p.
2881 it is stated that munda is a name which has been given
to the mundas by the hindus and is exclusively used by all
but the mundas themselves. under the heading munda are given
the names of different-sub-tribes of the mundas one of which
is mahdli. at p. 2756in the same book after the head
mahali it is said that a mahali is a munda of the elder
branch. the author then proceeded to say that the mahalis
are also called tamadias especially by hindus and in chota-
nagpur they are called khangars. in tamar they are called
pators. the mundari they speak is characterized by a great
number of vocal checks. they have practically all the clans
kilis found amongst the mundas. the evidence given on behalf of the first respondent is
amply supported by studies made by distinguished
anthropologists. the first respondent was without any
objection recorded in the voters list as a member of the
scheduled tribe. he was elected in 1962 from a scheduled
tribe companystituency. he again companytested the elections from
that companystituency in 1967 but he was defeated. it is only in
4969 when at the fresh elections that he companytested the seat
and was declared elected when an objection was raised that
he did number belong to a scheduled tribe. on a companysideration
of all the evidence we are of the view that patars are a
sub-tribe of mundas and that they are number different from
mundas. the alternative argument advanced by companynsel for the appel-
lant has also numbersubstance. it is true that in part iii of
the schedule to the companystitution scheduled tribes order
1950 issued under art. 342 of the companystitution the name
munda is mentioned and similarly the names of other sub-
tribes amongst mundas are mentioned. companynsel for the
appellant companytended that if according to dr. sachchidanand
mahalis ho bhumijs asur baiga and khangars are mundas
specific mention of some of those tribes in the schedule
tribes order clearly indicated that patars who are number
mentioned therein are number a scheduled tribe within the
meaning of the order. there is however no
warrant for that view. if patars are mundas because some
sub-tribes of mundas are enumerated in the order and others
are number numberinference will arise that those number enumerated
are number mudas. we are unable to hold that because patars
are number specifically mentioned in the list they cannumber be
included in the general heading munda. decisions in support of the companytention that the companyrts
cannumber allow evidence to be taken for proving that certain
classes of people though number expressly designated in the
presidential order were intended to be companyered by the order
may be briefly referred to. it may suffice to state however
that it is number the case of the first respondent that patars
are a distinct companymunity but that they should be regarded
as mundas because of the similarity of customs religious
beliefs forms of worship and other social obligations. in b. basavalingappa v. d. munichinnappa 1 the relevant
facts were that m who was elected from a scheduled castes
constituency claimed to belong to the bhovi caste which was
one of the scheduled castes mentioned in the companystitution
scheduled castes order 1950 issued by the president under
art. 341 of the companystitution. in an election petition it-
was claimed that m belonged to the voddar caste which was
number mentioned in the order and that on- that account m was
number entitled to stand for election from scheduled caste
constituency. evidence was led before the election tribunal
that bhovi was a sub-caste of the voddar caste and as m did
number belong to the bhovi sub-caste he companyld number stand for
election from the companystituency. the high companyrt in appeal
held that although voddar caste was number included in the
order yet companysidering the facts and circumstances in
existence at the time when the order was passed in 1950 the
bhovi caste mentioned in the order was the same as the
voddar caste. in appeal to this companyrt it was companytended that
the high companyrt was wrong in companysidering the evidence and
then companying to the companyclusion that the caste bhovi mentioned
in the order was meant for the caste voddar and that the
tribunal should have declined to allow evidence to be
produced which would have the effect of modifying the order
issued by the president. this companyrt held that the evidence
clearly showed that in 1950 when the order was passed there
was numbercaste in the then mysore state which was knumbern as
bhovi and the order companyld number have intended to recognise a
caste which did number exist. it was therefore necessary to
find out which caste was meant by the use of the name bhovi
and for that purpose evidence was rightly recorded by the
tribunal and acted upon by the high companyrt. this companyrt
accordingly companyfirmed the view of the high
1965 1 s. c. r. 316.
court. the decision in this case lends numbersupport to the
contention that evidence is inadmissible for the- purpose of
showing what an entry in the presidential order was intended
to mean. the next case in the order of sequence is bhaiyalal v.
harikishan singh and others. 1 in that case an election to
a state legislature was challenged an the ground that the
successful candidate belonged to the dohar caste which was
number recognised as scheduled caste for the district in
question and on that ground the successful candidate was
number companypetent to stand for election. the election tribunal
declared the election invalid and the finding was companyfirmed
on appeal by the high companyrt. it was hold by this companyrt that
the plea that the appellant is number a chamar and as such he
could- number claim the status of a chamar claiming that he
belonged to dohar caste which is a sub-caste of the chamar
caste and that an enquiry of the kind would number be
permissible having regard to the provisions companytained in
art. 341 of the companystitution. it was urged in that case
that chamars were recognised as a scheduled caste but number
the dohar. the successful candidate was it was found a
dohar and was number a chamar. the companyrt declined to allow a
plea to be raised that dohars were in some areas recognised
as a sub-caste of chamars. the companytention was plainly
futile once it was held that the candidate was number a chamar
in the companystituency to which the order related and dehars
were number a scheduled caste. the companyrt observedthat in
specifying castes races or tribes under art. 341 of the
constitution the president had been expressly authorised to
emit the numberification to parts of or groups within the
caste race or tribe and the president may well companye to the
conclusion that number the whole caste race or tribe but
parts of or groups within them should be specified. similarly the president can specify castes races or tribes
or parts thereof in relation number only to the entire state
but in relation to the parts of the state where he is
satisfied that the examination of the social and educational
backwardness of the races caste or tribe justifies such
specification. on that view the companyrt upheld the decision
of the high companyrt that the successful candidate who was a
dohar was number in the companystituency from which the case arose
a chamar within the meaning of the companystitution scheduled
castes order 1950.
in laxman siddappa naik v. kattimani chaniappa jamappanna
ors. 2 an unsuccessful candidate for election to the mysore
legislative assembly for a seat reserved for a member of the
scheduled tribes filed an election petition alleging that
the other three candidates were bedars a tribe number specified
in part viii para 2 of the companystitution scheduled tribes
order
1 1965 2 s.c.r. 877. 2 1968 2 s.c.r. 805. 1950. the successful candidate asserted that he was a
nayaka and the nayakas were also called bedars. the high
court held that there was numbernayaka in the area and
successful candidate was a bedar. this companyrt allowed the
appeal and held that nayakas were to be found number only in
the districts of mysore but also in maharashtra and
rajasthan. this tribal companymunity was therefore wide-
spread and it was number possible to say that there was no
nayaka in the district to which the appellant belonged. a
bare assertion by the election petitioner that the
appellant was a bedar did number suffice to displace the
acceptance of the numberination paper or the claim of the
appellant that he was a nayaka. in the present case it is number the companytention of the first
respondent that he was a patar-member of a tribe which is
number munda but he was recognized as a munda. his case was
that in his tribe he was as a munda patar. attention may also be directed to a recent judgment of this
court in dina v. narayan singh anr. 1 in that case dina
narnavare was declared elected to the maharashtra
legislative assembly from the armori scheduled tribes
constituency. his election was set aside on the application
filed by the first respondent on the ground that dina was
number eligible to stand as a candidate from a reserved
constituency. dina had declared in his numberination paper
that he was a member of the gond mana caste and the same
was a scheduled tribe in taluka gadchiroli of district
chanda in the maharashtra state and being a gond though
styled as mana he was entitled to the privileges given by
the companystitution scheduled castes order 1950. this companyrt
on a companysideration of the evidence came to the companyclusion
that there was numbersub-tribe of maratha manas among the
gonds. it was found that the customs manners forms a
worship and dress of the members of the maratha mana
community were all different from the customs manners form
of worship and dress of the gonds. in that view the companyrt
held that mana companymunity amongst the marathas companyld number be
regarded as gond and the appellant was number entitled to
stand for election as gond. | 0 | test | 1970_67.txt | 1 |
civil appellate jurisdiction civil appeal number 1795 of
1970.
from the judgment and order dated the 15th october
1968 of the madras high companyrt in writ petition number 2252 of
1965.
t. desai and t. a. ramachandran for the appellant. d. karkhanis and s. p. nayar for the respondent. the judgment of the companyrt was delivered by
chandrachudj.-the appellant filed a writ petition in
the high companyrt of madras 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. the high companyrt 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 companyrt under articles 133 a and c of the
constitution. the appellant is a companyoperative society engaged in the
business of banking. its total income for the assessment
year 1963-64 was companyputed by the respondent at rs. 1000098. out of this rs. 948335 was its business income
while rs. 51763 was its income from other sources. since
under section 81 i a of the income-tax act 1961 a company
operative society engaged in the business of banking is number
liable to pay income-tax on its business income the tax
amounting to rs. 23845.47 was charged on rs. 51763 only
though for the purposes of rate the income was taken at rs. 948335 in view of section 110 of the act. applying the
finance act xiii of 1963 the respondent companyputed the
residual income of the appellant at rs. 539386 and levied
on it an additional surcharge of rs. 52828.60. thus the
total tax levied on the appellant came to rs. 23845.47 plus
rs. 52828.60 i.e. rs. 76674.07.
the main grievance of the appellant before the high
court was that whereas its taxable income was only rs. 51763 a tax of rs. 76674.07 was imposed on it. the
relevant provisions of the finance act were accordingly said
to be invalid as they companyld number subject to additional
surcharge an income which was exempt from tax under the
provisions of the income-tax act. the additional surcharge
it was companytended was intended as an additional levy on the
income
tax and had numberindependent existence apart from it. these
contentions were rejected by the high companyrt 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
income of companyoperative societies.-income-tax
shall number be payable by a companyoperative society-
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. 948335
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 number liable to pay supertax on its business income. that
section provides that where the assessee is a companyoperative
society super-tax shall number be payable by it on any income
in respect whereof numberincome-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
income-tax and super-tax- 1 subject to the
provisions of sub-section 2 3 4 and 5 for
the assessment year companymencing 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-
in the cases to which paragraphs acc
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
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 union
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-
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 numberpart of which had been exempt from tax
and on numberportion of which deduction of tax had
been admissible under any provisions of the
income-tax act or this act. section 3 provides that
numberwithstanding anything companytained 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 numberincome-tax is payable or in respect of which a
deduction of income-tax is admissible under any of the
aforesaid provisions numberaccount shall be taken of the
additional surcharge. the first schedule of the finance act 1963 companysists of
three parts out of which we are only companycerned with part i.
part i which is called income-tax and surcharges on income-
tax companysists 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 companyoperative
society is an association of persons paragraph a of part i
would apply to the case of the appellant forthe purposes of
section 2 1 a ii of the finance act oil 1963 though number
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 companyputed
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 union
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 companycerned provides for the levy
of an additional surcharge for the purposes of the union
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 the high companyrt with some earnestness
that the tax levied upon it exceeds its taxable income can
afford numbertrue guide to the companystruction 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 companystitution cannumber
be an invalidating circumstance. but the grievance on this
score is basically misconceived. it assumes what has to be
examined that numberpart 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. 1000098. 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. 948335. the balance
viz. rs. 51763 which was the appellants income from other
sources was alone taxable under the act of 1961 and a tax of
rs. 23845.47 was imposed on that income the finance act
of 1963 subjects residual income to certain charges and
such in companye was companyputed admittedly companyrectly at rs. 539386. an additional surcharge of rs. 52828.60 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. 23845.47 plus rs. 52828.60. the total tax of rs. 76674.07 thus imposed is
far less than the. appellants total taxable income arrived
at by the addition of its number-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 companynsel for the appellant during the companyrse of
his arguments gave up the challenge to the power of the
parliament to impose a new charge by a finance act. this
concession was properly made. by article 246 1 of the
constitution parliament 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 acts are enacted by the
parliament in exercise of the power companyferred by article
246 1 read with entry 82 of list i. once the parliament has
the legislative companypetence to enact a law with respect to a
certain subject-matter the limits of that companypetence cannumber
be judged further by the form or manner in which that power
is exercised. accordingly though it would be unconventional
for the parliament to amend a taxing statute by
incorporating the amending provision in an act of a
different pith and substance such a companyrse would number be un-
constitutional. much more so can the parliament introduce a charging
provision in a finance act. true as said in kesoram
industries and companyton mills limitedv. companymissioner of wealth
tax central calcutta 1 that the income-tax act is a
permanent act v. while the finance acts 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 number mean that a new and distinct charge
cannumber be introduced under the finance act. exigencies of
the financial year determine the scope and nature of its
provisions. if the parliament has the legislative companypetence
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 companysideration 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 number
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 parliament through the medium of a
finance act may as much do the one as the other. in
mcgregor and balfour limited calcutta v. c.i.t. west
bengal 1 which was affirmed by this companyrt in 36 i.t.r. 65.
chakravartti c.j. delivering the judgment of a division
bench observed that the finance acts though annual acts are
number necessarily temporary act for they may and often do
contain provisions of a general character which are of a
permanent operation. in hari krishna bhargav v. union of india and anr. 2
an assessee challenged the scheme of annuity deposits of the
ground that the parliament has numbercompetence to incorporate
ill the income tax act a provision which was substantially
one relating to borrowings by the central government from a
class of tax-payers. that scheme was introduced by finance
act 5 of 1964 which incorporated chapter xxii-a companytaining
section 28-a to section 28-x in the income tax act 1961.
the challenge was repelled by this companyrt on the ground that
if the parliament had the legislative companypetence to pass an
act for companylecting annuity deposits from tax-payers numberhing
contained in the companystitution 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
appellants companycession on the parliaments 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 number only prescribe rates
but also introduce a new charge. we will number proceed to companysider the provisions of the
finance act 1963 under which the respondent has levied
additional surcharge on the appellants residual income. the
question for companysideration 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 appellants 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
appellants companynsel shows that surcharges by way of
increase in the amount of income-tax are numberhing 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 companyoperative society engaged in
the business of banking is neither liable to pay income-tax
number any of the surcharges on its business income. in c.i.t. kerala v. k. srinivasan 1 on which the
appellant relies this companyrt has traced the history of the
concept of surcharge in tax laws of our companyntry. after
considering the report of the companymittee on indian
constitutional reforms the provisions of the government of
india act 1935 the provisions of articles 269 270 and 271
of the companystitution and the various finance acts this companyrt
held differing from the high companyrt that the word income-
tax in section 2 2 of the finance act 1964 includes
surcharges and the additional surcharge. this case does number touch the point before us. in that
case the assessees income for the accounting year ending
march 30 1964 companysisted mainly of his salary. section
2 2 a of the finance act 1964 did number by itself refer to
any surcharge but it provided that in making the assessment
for the assessment year companymencing 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 companysideration was under
the total income. the question which arose for companysideration
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 companyrt 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 companyrt 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 k.
srinivasans case the companyrt declined to express any opinion
on the distinction made by the high companyrt 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
number 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 number rest
with what section 81 i a says. even if that section were
to grant an express exemption from surcharges on business
income the parliament companyld 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 companypetence the parliament
can grant an exemption it is surely companypetent to it to
withdraw that exemption in exercise of the self-same power. the finance act 1963 like its annual companynterparts
contains provisions number only prescribing rates of taxation
but making extensive and important modifications in the
income-tax act itself. by sections 4 to
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 companycepts of taxation
altogether are introduced. such innumberations fall within the
legitimate scope of finance acts. 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 companyrt in
mcgregor and balfour limited v. c.i.t. west bengal 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 acts the
specific question which we have to companysider 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 companyputation in cases where income-tax
is in fact payable or whether as companytended 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 number 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 companytention that the levy of additional
surcharge on the residual income cannumber be disassociated
from the main charge of income-tax. we are unable to accept this companytention article 269 1
of the companystitution provides that the duties and taxes
mentioned therein shall be levied and companylected by the
government of india 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 companylected by the government of india and
distributed between the union and the states in the manner
provided in clause 2 . by article 271 numberwithstanding
anything in articles 269 and 270 parliament may increase
any of the duties or taxes referred to in those articles by
a surcharge for purposes of the union. surcharges leviable
under section 2 1 of the finance act. 1963 are relatable to
article 271 of the companystitution. section 2 1 a ii of that act provides in so far as
relevant that for the assessment year companymencing 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
union 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 union
shall be calculated on the amount of the residual income. at the rates mentioned in that clause. thus both the purpose
and companycept of the additional surcharge are different from
those of income-tax. the additional surcharge is leviable
exclusively for purposes of the union so that the entire
proceeds of such surcharge may under article 271 of the
constitution from part of the companysolidated fund of india. taxes and duties mentioned in article 269 1 though levied
and companylected by the government 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 union is to be calculated number 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 numberpart of which had been exempt from tax and
on numberportion of which deduction of tax had been admissible. in order that the exemption granted to companyoperative banks by
section 81 i a may number lose its meaning and companytent
section 2 8 of the finance act introduces the companycept of
residual income on which alone the additional surcharge is
payable. the residual income is number the same as the business
income of a companyoperative 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
number levied on the appellants business income of rs. 948335 which is exempt from income-tax and super-tax. it
is levied on the residual income of rs. 539386 which is
arrived at after deducting gross taxes exclusive of
additional surcharge amounting to rs. 460712 from the
assessees gross income of rs. 1000098. by section 3 of
the finance act of 1963 numberaccount 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 companytained 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. number
dependent for its leviability on the assessees liability to
pay income-tax or super-tax. such a qualification cannumber 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-taxshall further be increased by an additional
sur-
charge number for making the assessability to surcharge
dependent upon assessability to income tax but for the
simple reason that if an assessees total income includes
income on which numbertax is payable tax has all the same to
be companyputed 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 numberincome-
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 numberincome-tax is payable. the income-tax companyputed
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 companyputed 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 companyld have been
used to companyvey that simple sense. the weakness of the appellants companytention becomes
manifest when it is realised that were the companytention right
the appellant would number be liable to pay additional
surcharge even on that portion of its number-business income
which is companytained 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 number business
income which is chargeable to income-tax must form a
component of the residual income. companycededly the appellant
is liable to pay additional surcharge on its number-business
income. this is so number because additional surcharge is
payable by law on number-business income but because it is
payable on residual income and residual income by
definition includes number business income as reduced. in
fact it companysists of the amount of total income as reduced
by the amounts mentioned in clauses a and b of section
2 8 . relying on united companymercial bank limited v. companymissioner
of income-tax west bengal 1 east india housing and land
development trust limited v. companymissioner of income-tax west
bengal 2 and k. v. al. m. ramanathan chettiar v.
commissioner of income-tax madras 3 the appellants
counsel urged that income-tax is a single levy that it is
one tax and number 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 number liable to pay
income-tax cannumber 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 companysequence of any order passed under the
act the income-tax office has to serve upon the assessee a
numberice 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 numberincome-tax or super tax the numberice of
demand will mention the particular amount payable as tax
due. the appellant being liable to pay tax on its number-
business income and additional surcharge on its residual
income the demand numberice 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 numberviolence 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 assessees business income from
income tax and super-tax. the finance act brings to tax its
residual income. the decision of the allahabad high companyrt in allahabad
district companyoperative bank limited v. union of india and
ors. 1 is directly in favour of the appellant and
naturally learned companynsel 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 number provide for
the levy of a tax other than income-tax and that therefore
additional surcharge is number 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 revenues companytention was that if the
additional surcharge mentioned in the finance act of 1963
was number partake of the nature of income-tax it will number be
possible to demand and realise it under the provisions of
the income-tax act and the numberice 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. | 0 | test | 1975_175.txt | 1 |
markandey katju j.
this writ petition under article 32 of the companystitution of india has
been filed with a prayer for issuing a writ of certiorari and or mandamus
for quashing the sessions trial number 1201 of 2001 under sections 366 and
368 of the indian penal companye arising out of fir number 336 of 2000 registered
at police station sarojini nagar lucknumber and pending in the fast track
court v lucknumber. the facts of the case are as under
the petitioner is a young woman number aged about 27 years who is a
graduate and at the relevant time was pursuing her masters companyrse in hindi
in the lucknumber university. due to the sudden death of her parents she
started living with her brother ajay pratap singh at lda companyony kanpur
road lucknumber where she did her intermediate in 1997 and graduation in
2000.
it is alleged by the petitioner that on 2.11.2000 she left her brothers
house of her own free will and got married at arya samaj mandir delhi to
one bramha nand gupta who has business in delhi and other places and
they have a child out of this wedlock. thereafter on 4.11.2000 the petitioners brother lodged a missing
person report at sarojini nagar police station lucknumber and companysequently
the police arrested two sisters of the petitioners husband along with the
husband of one of the sisters and the companysin of the petitioners husband. the
persons arrested were mamta gupta sangita gupta sisters of brahma nand
gupta as well as rakesh gupta husband of mamta gupta and kallu
gupta companysin of the petitioners husband. mamta was in jail with her one
month old child. it is further alleged that the petitioners brothers ajay pratap singh
shashi pratap singh and anand pratap singh were furious because the
petitioner underwent an inter-caste marriage and hence they went to the
petitioners husbands paternal residence and vehemently beat up her
husbands mother and uncle threw the luggage furniture utensils etc. from
the house and locked it with their lock. one brother of the petitioners
husband was allegedly locked in a room by the petitioners brothers for four
or five days without meals and water. the petitioners brothers also
allegedly cut away the harvest crops of the agricultural field of the
petitioners husband and sold it and they also took forcible possession of the
field. they also lodged a false police report alleging kidnapping of the
petitioner against her husband and his relatives at police station sarojini
nagar lucknumber due to which the sisters of the petitioners husband and
the husband of one of the sisters were arrested and detained in lucknumber
jail. the petitioners brothers also illegally took possession of the shop of
the petitioners husband. the petitioners husband has a shop at badan
singh market rangpuri in the name of gupta helmet shop whose
possession was forcibly taken over by her brothers. it is further alleged that the petitioners brothers are threatening to kill
the petitioners husband and his relatives and kidnap and kill her also. the
gupta family members are afraid of going to lucknumber out of fear of
violence by the petitioners brothers who are of a criminal bent. it is alleged that the petitioners husband and relatives have been
falsely framed by her brothers shashi pratap singh ajay pratap singh and
anand pratap singh who were furious because of the inter-caste marriage of
the petitioner with bramha nand gupta. mamta gupta rakesh gupta and
sangita gupta were arrested on 17.12.2000 whereas kallu gupta was
arrested on 02.12.2000. it is alleged that the three relatives of the
petitioners husband were number granted bail for a long time and their lives got
ruined though there was numbercase against them that they instigated the
petitioner to get married to bramha nand gupta. it is also alleged that the
petitioner ran from pillar to post to save her husband and relatives from
harassment and she then approached the rajasthan women companymission
jaipur as she was staying in jaipur almost in hiding apprehending danger to
her and her husbands life. the companymission recorded her statement on
13.3.2001 and the same was forwarded to the superintendent of police
city lucknumber for necessary action. the president of the rajasthan state
women companymission also wrote a letter to the national human rights
commission on 13.3.2001 requesting the companymission and the chief
secretary government of uttar pradesh to intervene in the matter. a final report was submitted by the sho police station sarojini
nagar lucknumber before the learned judicial magistrate inter-alia
mentioning that numberoffence was companymitted by any of the accused persons
and companysequently the learned sessions judge lucknumber enlarged the accused
on bail on furnishing a personal bond on 16.5.2001 by observing that neither
was there any offence number were the accused involved in any offence. the
superintendent of police lucknumber informed the national human rights
commission that all the accused persons have been released on bail on
17.5.2001.
thereafter the investigating officer recorded the statement of the
petitioner lata gupta lata singh on 28.5.2001 and for this purpose armed
security was provided to her. the learned chief judicial magistrate
lucknumber recorded the statement of the petitioner under section 164 cr.p.c. on 29.5.2001. in that statement the petitioner stated that she married
bramha nand gupta of her own free will. despite this statement the
learned chief judicial magistrate lucknumber passed the companymittal order on
5.10.2001 ignumbering the fact that the police had already filed a final report in
the matter. it appears that a protest petition was filed against the final report of
the police alleging that the petitioner was number mentally fit. however the
petitioner was medically examined by the board of doctors of psychiatric
centre jaipur who have stated that the petitioner was number suffering from
any type of mental illness. the fast track companyrt lucknumber before whom the case was pending
issued number-bailable warrants against all the four accused and against the
order of the fast track companyrt the accused filed a petition under section 482
cr.p.c. in the allahabad high companyrt lucknumber bench which was registered
as crl. misc. number 520/2003. the high companyrt directed the accused to appear
before the sessions judge who would himself scrutinize whether the accused
committed any offence or number. the matter is still pending. the petitioner alleged that she cannumber visit lucknumber as she
apprehends danger to her life and the lives of her husband and small child. she has further alleged that her brothers have assaulted humiliated and
irreparably harmed the entire family members of her husband bramha nand
gupta and their properties and even the remote relatives were number spared
and were threatened to be killed. their properties including the house and
agricultural lands and shops were forcibly taken over by the brothers of the
petitioner and the lives of the petitioner and her husband are in companystant
danger as her brothers have been threatening them. we have companysidered the above facts and have heard learned companynsel
for the petitioner and the learned companynsel for the state government. this case reveals a shocking state of affairs. there is numberdispute that
the petitioner is a major and was at all relevant times a major. hence she is
free to marry anyone she likes or live with anyone she likes. there is numberbar
to an inter-caste marriage under the hindu marriage act or any other law. hence we cannumber see what offence was companymitted by the petitioner her
husband or her husbands relatives. we are of the opinion that numberoffence was companymitted by any of the
accused and the whole criminal case in question is an abuse of the process of
the companyrt as well as of the administrative machinery at the instance of the
petitioners brothers who were only furious because the petitioner married
outside her caste. we are distressed to numbere that instead of taking action
against the petitioners brothers for their unlawful and high-handed acts
details of which have been set out above the police has instead proceeded
against the petitioners husband and his relatives. since several such instances are companying to our knumberledge of
harassment threats and violence against young men and women who marry
outside their caste we feel it necessary to make some general companyments on
the matter. the nation is passing through a crucial transitional period in our
history and this companyrt cannumber remain silent in matters of great public
concern such as the present one. the caste system is a curse on the nation and the sooner it is destroyed
the better. in fact it is dividing the nation at a time when we have to be
united to face the challenges before the nation unitedly. hence inter-caste
marriages are in fact in the national interest as they will result in destroying
the caste system. however disturbing news are companying from several parts
of the companyntry that young men and women who undergo inter-caste
marriage are threatened with violence or violence is actually companymitted on
them. in our opinion such acts of violence or threats or harassment are
wholly illegal and those who companymit them must be severely punished. this
is a free and democratic companyntry and once a person becomes a major he or
she can marry whosoever he she likes. if the parents of the boy or girl do
number approve of such inter-caste or inter-religious marriage the maximum
they can do is that they can cut off social relations with the son or the
daughter but they cannumber give threats or companymit or instigate acts of violence
and cannumber harass the person who undergoes such inter-caste or inter-
religious marriage. we therefore direct that the administration police
authorities throughout the companyntry will see to it that if any boy or girl who is
a major undergoes inter-caste or inter-religious marriage with a woman or
man who is a major the companyple are number harassed by any one number subjected to
threats or acts of violence and any one who gives such threats or harasses or
commits acts of violence either himself or at his instigation is taken to task
by instituting criminal proceedings by the police against such persons and
further stern action is taken against such persons as provided by law. we sometimes hear of honumberr killings of such persons who undergo
inter-caste or inter-religious marriage of their own free will. there is
numberhing honumberrable in such killings and in fact they are numberhing but barbaric
and shameful acts of murder companymitted by brutal feudal minded persons
who deserve harsh punishment. only in this way can we stamp out such acts
of barbarism. in the circumstances the writ petition is allowed. the proceedings in
sessions trial number 1201/2001 titled state of u.p. vs. sangita gupta ors. arising out of fir number 336/2000 registered at police station sarojini nagar
lucknumber and pending in the fast track companyrt v lucknumber are quashed. | 1 | test | 2006_343.txt | 1 |
civil appellate jurisdiction civil appeal number. 1600
1568 and 1416 of 1970.
from the judgment and order dated the 13th/14th
february 1969 of the bombay high companyrt in special civil
application number. 295 of 1962 1397166 and 1086 of 1966
respectively. b. datar lalit bhardwaj and miss madhu moolchandani
for the appellant in c.a. number 1600/70. dr. l.m. singhvi r.h. dhebar s.k dholakia r.c. bhatia mrs. ranjana anand and l.k pandey for the appellants
in c.a. number 1568/70. s. desai and dr. y.s. chitaley mrs. j. wad for the
respondent in c.a. number 1600 and 1568.
mrs. j. wad for respondent in c.a. number 1416 of 1970.
the judgment of the companyrt was delivered by
misra j. the present appeals by certificate are
directed against a companymon judgment of the bombay high companyrt
dated 13th of february 1969. by the impugned order the high
court dismissed the petitions filed by the appellants under
article 226 of the companystitution challenging the demand of
octroi duty by the municipal companyporation of poona. the bombay provincial municipal companyporation act 1949
for short the act came into operation in the city of
poona on 15th of february 1950. section 127 2 thereof
authorises the companyporation to impose octroi and other taxes. section 149 prescribes the procedure to be followed in
levying taxes. insofar as it is material it reads
149 1 in event of the companyporation deciding to
levy any of the taxes specified in sub-section 2 of
section 127 it shall make detailed provision in so
far as such provision is number made by this act in the
from of rules amplifying or adding to the rules at the
time in force
the rules shall be submitted by the
corporation government and the provincial government
may either refuse to sanction them or refer them back
to the companyporation for further companysideration or
sanction them either as they stand or with such
modification as it thinks fit number however involving
an increase in the rate or rates of the levy or the
extent thereof. it appears that sometime in the year 1957 the
corporation in order to boost industrial development and to
encourage the industrialists to establish industries in the
city had decided to give certain companycession in the nature
of exemption from octroi duty on certain products under
certain companyditions. pursuant to this objective the
corporation made rule 62-b in chapter viii to the schedule
of the raid act in 1957. it reads
62-b. industrial estate or area means the area
which companyporation may from time to time demarcate for
the purposes of the rule as the area in which
industries can - be suitably located in the interest of
industrialisation of the city of poona. in respect of any raw materials or machinery
imported by any industrial manufacturing companycern
established or to be established in the industrial
estate solely for the purpose of manufacturing finished
articles in the said industrial estate the
commissioner shall number for a period of twelve years
only from the date on which this rule companyes into
force levy octroi
under this rule numberlevy of octroi was to be made for a
period of twelve years from the date on which the rule came
into force. later on the companyporation framed extensive new octroi
rules under their resolution dated 7th of august 1962
which received the sanction of the government of maharashtra
on 28th of january
1963. as the entire argument on behalf of the appellants is
based on rule 5 8 of the said rules it will be
appropriate to quote the rule
5 8 . in respect of any raw materials or
machinery belonging to and imported by the industrial
manufacturing processing or assembling companycern
established or to be established in the industrial
estate or area for the purpose of manufacturing
processing or assembling finished articles in the said
industrial estate or area the companymissioner shall number
levy octroi for a period of 10 years from the date of
demarcation of such areas as an industrial estate or
area. provided that this exemption number be given in
respect of any raw materials imported for the purpose
of refilling packing or repacking only. provided that numberexemption from octroi shall be
given or claimable unless the importer produces at the
time of 1 import but number afterwards a certificate in
the form prescribed in schedule p signed by the
proprietor or the manager of the said industrial
concern certifying that the raw materials or machinery
that are being imported are the property of the
ownership of the said industrial companycern and that the
said materials or machinery are to be used or are
intended to be used by the said industrial companycern for
the purpose of manufacturing processing or assembling
finished articles in the said industrial estate or
area. for the purpose of this exemption industrial
estate or area shall mean the area which the
corporation may from time to time demarcate for the
purposes of this rule as the area in which industries
can be suitably located in the interest of
industrialisation of the city of poona. the companyporation had been levying octroi on the
materials received by the appellants. they however sought
to get exemption under rule 5 8 from octroi. as the
pattern of facts in each of the appeals is similar we shall
deal with the application made by the appellant in appeal
number 1568 of 1970. the appellant in this case applied on 17th
of numberember 1964 for exemption from payment of octroi duty
under rule 5 8 of the octroi rules. the
superintendent of octroi poona municipal companyporation wrote
back on 5th of december 1964 as follows
exemption from payment of octroi duty can only
be granted if the area within which the companycern is
situated is declared as industrial area and is
demarcated for the purpose under the resolution of the
corporation. as the area in question has number been
demarcated as an industrial area under the resolution
of the municipal companyporation the question of granting
exemption from the payment of octroi duty does number
arise. it is therefore regretted that the exemption
asked for cannumber be granted. similar was the position of the appellants in the other
two appeals. in the circumstances the appellants filed petitions
under article 226 of the companystitution for a mandamus
requiring the municipal companyporation to define and demarcate
the area where their factories were situate as industrial
area within the meaning of sub-rule 8 of rule s and to
exempt them from payment of octroi. it appears that during the pendency of the writ
petitions rule 5 8 of the octroi rules was repealed by a
numberification with effect from 1st of september 1968. the
appellants therefore applied for amendment of the
petitions. by these amendments the appellants sought to
take up two more pleas i that the repeal of sub-rule 8
of rule 5 was illegal and or ultra vires and therefore
rule 5 8 still companytinues to be effective and 2 that in
any event the appellants can get the benefit of rule 62-b
which has number been repealed. the high companyrt repelled both the companytentions and held
that old rule 62-b and the new rule 5 8 were repealed and
there was numberlegal flaw. it however. took the view that
despite the repeal of rule s 8 the appellants companyld still
get the relief under rule s 8 if other companyditions were
satisfied because of the proviso attached to the repealing
rule. on merits however the high companyrt did number accept the
case of the appellants. in its opinion the area in ques was
number demarcated as industrial estate or area for the purpose
of rule 5 8 . the high companyrt further held that in view of
rule 5 8 of the octroi rules it was solely in the
discretion of the companyporation to demarcate an area as
industrial estate. the appellants have
number companye to challenge the order of the high companyrt by these a
appeals. dr. singhvi appearing for the appellant in one of the
appeals civil appeal number 1568 of 1970 has companytended that
if certain area has been demarcated as an industrial area
under the bombay town planning act 1954 the same shall be
taken to be an industrial area within the meaning of rule s
8 of the octroi rules. the argument proceeded in the first
instance on the assumption that the disputed area had
already been included in the development plan under bombay
town planning act 1954 before the promulgation of rule s
8 and had thus automatically become an industrial estate
or area for the purposes of that rule. but the development
plan was prepared by the companyporation on 20th of numberember
1958 which was sanctioned by the government on 7th of july
1966 and it came into fore on 15th of august 1966.
therefore numberarea had been declared as industrial area
under the development plan before 1957 and in fact it was
only after the enforcement of the development plan on 15th
of august 1967 that the disputed area became an industrial
area under the bombay town planning act. dr. singhvis
assumption clearly lacks any factual basis. number the question is whether demarcation of a particular
area as an industrial estate or area in pursuance of the
bombay town planning act companyld be taken to be a demarcation
within the meaning of rule 5 8 . on a bare perusal of rule
5 8 it will be apparent that for the purpose of the
exemption from octroi an industrial estate or area means the
area which the companyporation may from time to time demarcate
for the purpose of this rule as the area in which industries
can be suitably located for the interest of
industrialisation of the city of poona. obviously
therefore the demarcation made under the town planning act
will number be a demarcation for the purpose of rule s 8 and
unless there is a demarcation as companytemplated by rule s 8
the appellants cannumber claim exemption from octroi. the view
taken by the high companyrt is fully warranted by rule s 8 of
the octroi rules. it is next companytended for the appellant that the
corporation has refused to grant exemption to the appellant
on the arbitrary ground that the companycern of the appellant
was number a new one. the learned companynsel seeks to support his
argument by the following expression used in sub-rule 8 of
rule 5
concern established or to be established in
the industrial estate or area. the expression obviously includes number only a companycern to be
established but also one already established. but even then
the appellant cannumber get exemption unless he proves that
there has been demarcation within the meaning of sub-rule
8 of rule 5 of the octroi rules. while demarcating an area
for the purpose of rule 5 8 the companyporation may have to
take into companysideration various factors and circumstances
different from those which might weigh with it for making
out an area as industrial under the town planning act. the
purpose of that act is to plan the town and thus to keep
industrial areas away from the residential or companymercial
areas and numberindustries companyld be set up in an area other
than the industrial area declared in pursuance of that act
while the purpose of demarcation as industrial estate or
area under rule 5 8 is the giving of incentive and impetus
to industries in a particular area in so doing the
corporation has got to see whether a particular area is or
is number suitably located in the interest of industrialisation
irrespective of any companysideration as to how the town is to
be planned. it was next companytended that there has been violation of
article 14 of the companystitution in as much as some industries
in similar situation have been granted exemption while the
appellants have been deprived of the benefit of rule 5 8 . there is numberfoundation for this ground. it has number been
alleged much less proved that any other unit has been
granted exemption even without a demarcation by the
corporation under rule 5 8 . there is absolutely numberforce in
this companytention. for the respondent it was companytended that rule 5 8 of
the octroi rules having been deleted the appellant cannumber
seek exemption under rule s 8 . dr. singhvi for the
appellant in reply has companytended that for one thing the
appellant can fall back on the old rule 62-b as the same has
number been repealed. the preamble to the new octroi rules
reads
whereas it is found necessary to rescind rules
26 28 29 33 62 and rules 35 and 49 in so far as
they relate to octroi companytained in chapter viii of the
schedule of the bombay provincial municipal
corporations act 1949 and all other existing rules
and bye-laws relating to octroi enacted under the
bombay district municipal act 1901
and the bombay municipal boroughs act 1925 and a
whereas it is found necessary to make new rules
relating to octroi under sub-section i of section 149
of the bombay provincial municipal companyporations act
1949 the municipal companyporation of the city of poona
under its resolution number 78 dated 7.8-1962 in
pursuance of the power vesting in it under clause 7
and clause 17 of section 457 read with section 454 of
the said act is pleased to rescind the rules and bye-
laws aforementioned and to make the new rules as
follows. it is true that seven rules companyering the subject of
octroi and companytained in chapter viii of the schedule to the
bombay provincial municipal companyporation act 1949 have been
specifically mentioned in the preamble as being rescinded
and rule 62b is companyspicuous by its absence therefrom which
fact apparently supports dr. singhvis companytention. a closer
analysis of the preamble under which new rules were framed
however makes it clear that rule 62b relating to octroi was
repealed by implication. it is numbereworthy that chapter viii
above mentioned does number companytain any rule relating to
octroi except rule 62b which did number find a place in the
preamble. all rules relating to octroi and enacted under the
1901 and the 1925 acts were also repealed without exception. anumberher pointer which is perhaps the most important in this
connection is available in the fact that octroi was made
the subject-matter of a new and companyprehensive set of rules
which number only deal with the matters companyered by the rules
contained in chapter viii and specifically mentioned in the
preamble but also the one companyered by rule 62b namely the
matter of exemption of goods from octroi in areas companysidered
suitable for industralisation. it does number stand to reason
that the rule-making authority framed new rules of which
rule 5 8 companyers the entire field of the earlier rule 62b
and yet left the latter intact. it companyld possibly number have
been the intention of that authority to have two rules on
the same subject and thus create companyfusion. the promulgation
of rule 5 8 as a part of an exhaustive set of new rules in
our opinion has the effect of a repeal of rule 62b by
necessary implication although number in express terms. dr. singhvi however as a second string to the bow
banks upon the proviso to the resolution of the companyporation
seeking to repeal rule 5 8 which is in these words
octroi rule 5 8 is hereby repealed. provided
that numberwithstanding such repeal the exemption already
granted shall companytinue until the expiry of the
respective periods of their grants. the resolution so passed was sent to the government and as
held in municipal companyporation for the city of poona etc. v.
bijlee product india limited etc. 1 the government accepted
it in full and sanctioned the repeal of rule s 8 as also
the proposed proviso. but then the appellants would number be
entitled to any benefit by reason of the proviso because
they were never granted any exemption under rule 5 8 . the other companytention raised by dr. singhvi is that the
corporation while denying the benefit of exemption from
octroi has taken into companysideration extraneous or irrelevant
considerations. in support of his companytention he referred to
paragraph 7 of the companynter affidavit filed by the
corporation in the writ petition which is as follows
the respondents grant exemptions to companycerns
on certain policies. the purpose of extending exemption
from octroi duty is to attract new industries in the
corporation limits. this policy is also carried out
with a view to develop the city and also to secure
employment to citizens and thus to have progress in the
econumberic companyditions companymerce and trade for the welfare
of the people in general. moreover the aim of giving
exemptions to new industries is to secure permanent
sources of income for the respondents after a certain
period i.e ten years. this is the main object in
granting exemption in the cases of new industries to be
started that help the development of the city and
secure permanent sources of income for the respondents
after a definite period. side by side there are
certain other objects also which are kept in view while
determining the question of granting exemptions. these
are whether defence needs are satisfied whether in the
interest of public health and sanitation the grant of
exemptions is beneficial whether foreign exchange is
saved whether the problem of housing accommodation is
solved to some extent and the like. the respondents
will suffer
huge loss in revenue if exemptions are granted to each
and every industry falling within the industrial areas
under the town planning scheme. all these
considerations are within the full discretion of the
respondents while determining the question of grant of
exemptions
in our opinion the companysiderations which have weighed with
the companyporation cannumber be said to be either irrelevant or
extraneous. these companysiderations are within the ambit of
rule 5 8 of the octroi rules. a lot of argument was advanced on behalf of the
appellant by dr. singhvi on the nature of relief to be
granted to the appellant. his companytention was that a writ of
certiorari may number be of much avail unless the companyrt grants
a writ of mandamus directing the companyporation to demarcate
the area in question under rule s 8 of the octroi rules and
grant him the exemption from octroi duty. a number of
authorities were cited that the companyrt can issue a writ of
mandamus in suitable cases even in respect of administrative
orders. we do number think it is necessary to decide this point
as in our opinion the appellants have number been able to make
out a case for any relief. in civil appeal number 1600 of 1970 shri r.b. datar
adopted the arguments advanced by dr. singhvi. in the third
appeal number 1416 of 1970 also the same questions of fact and
law are h involved and therefore this judgment will govern
the other two appeals. | 0 | test | 1981_280.txt | 1 |
criminal appellate jurisdiction criminal appeal number
320/75. appeal by special leave from the judgment and order
dated 2.4.1975 of the punjab and haryana high companyrt in
criminal appeal number 1044/74 and murder reference number 50/74. g. bhagat and r.n. poddar for the appellant. mrs. urmila sirur for the respondents. the judgment of the companyrt was delivered by
baharul islam j. this appeal by special leave by the
state of haryana is directed against the judgment and order
of the punjab and haryana high companyrt setting aside the
conviction and and sentence passed by the session judge
karnal. respondents balkar singh and dalel singh are the
sons of respondent sher singh. the session judge companyvicted
all the three under section 302/34 of the penal companye and
sentenced sher singh to death and the other two to
imprisonment for life. on a reference by the sessions judge
for the companyfirmation of the sentence of death inflicted on
sher singh and appeal filed by the respondents the high
court set aside the order of companyviction and sentence and
acquitted the respondents. the material facts may be stated thus on 17th of
october 1973 at about 12 a.m. mst. narman widow of danna
deceased submitted the first information report to a.s.i. ram sarup p.w. 12 at village pai. her material allegations
in the first information report were that the previous day
respondent sher singh and his two younger half brothers
namely danna her husband and hukmi had effected a family
partition amongst themselves and they started living
separately. that day namely 17th of october at about 6.00
m. her husband danna along with his brothers hukmi and
respondents sher singh came to their bagichi nearby from the
house in order to milk cattle. she followed them in order to
fetch milk. respondent sher singh then along with his sons
dalel balkar keni prem and parwana surrounded her husband
and her husbands younger brother hukmi in the companyrtyard. sher singh had a gandasi in his hand dalel a lathi shoded
with iron blade the other three had lathis in their hands. sher singh dealt a gandasa blow on the head of her husband
danna who immediately fell down on the ground. dalel then
dealt a blow with iron shoded lathi on the head of hukmi who
also fell down on the ground. the other accused then
inflicted blows with lathis on the persons after they had
already fallen down. respondent sher singh dealt anumberher
gandasi blow on her husband. she has further stated in the
first information report that mst. danni sister of
respondent sher singh was also with her and witnessed the
occurrence. they screamed seeing the assaults whereupon
they were directed on pain of death to sit in the companyner of
the companyrt-yard. out of fear they obliged. thereafter it has further been
alleged the accused persons dragged the dead bodies to
their nearby heap of company-dung cakes. sher singh spread
kerosene on the heap of the cakes and dalel set fire to it
lighting a match stick. as a result the two bodies were
charred. p.w. 12 sent the f.i.r. to the police station where
the case was registered. police after investigation
submitted charge-sheet and arrested the accused persons. eventually the accused persons were charged under section
302/34 of the penal companye and tried in the companyrt of
sessions. the accused persons pleaded number guilty to the
charges. according to them the three brothers were joint in
residence mess and cultivation till the date of the
occurrence. the defence of respondent sher singh was that
his two sons dalel and balkar and the deceased brothers
danna and hukmi used to sleep in the bagichi during the
night to keep watch over their cattle tethered there. on
october 16 1973 he and his two deceased brothers were in
their fields during the day and in the evening he went to
their field where companyton was ripe and he remained there to
keep watch over the companyton till next morning. that field was
at a distance of about 1 1/2 miles from their bagichi. about
1 1/2 hours after sun rise on october 17 1973 he returned
to the bagichi where he found the heap of company-dung cakes in
the enclosure of bagichi burning. police then arrested him. the defence of respondent dalel was that two days before the
date of occurrence he went to his maternal uncle lalji at
narwara to borrow a tractor. he returned home on the 17th of
october 1973 at about sun-set. he found the heap of company-
dung burning and police inside the bagichi where he was
arrested by the police. the defence of respondent balkar was
that he was a student of 9th class and on 16th of october
1973 he had been to school to witness some sports. he passed
the following night in village diwali where his sister was
married. he returned home on october 17 1973 and when he
reached the bagichi he found the heap of company-dung burning
and he was arrested by the police there. thus the defence
of all the respondents was alibi. when an accused pleads alibi the burden is on him
to prove it under section 103 of the evidence act which
provides
the burden of proof as to any particular fact
lies on that person who wishes the companyrt to believe in
its existence unless it is provided by any law that
the proof of that fact shall lie on any particular
person. illustrations a a prosecutes b for theft and wishes
the companyrt to believe that b admitted the theft to c. a
must prove the admission. b wishes the companyrt to believe that at the time in
question he was elsewhere. he must prove it. in this case defence did number adduce any evidence to
prove the alibi. on the companytrary the evidence of p.w. 11
lila is that on 21st october 1973 all the accused were
produced by lalji the brother of the wife of respondent
sher singh in village nand karan majra around 8 a.m. when
they were arrested. this was in presence of p.w. 11 and
several others. police had been there the witness says from
october 17 to 20 1973. this evidence of p.w. 11 remains
unrebutted. the plea of the respondents that they had been
elsewhere at the time of the occurrence and returned to the
place of occurrence by themselves on october 17 when they
were arrested by police is untrue. let us number turn to and examine the prosecution case
and see whether the prosecution has proved the guilt of the
accused beyond reasonable doubt. the death of danna and hukmi is number in dispute. that
the dead bodies were burnt on the company dung heap by the side
of the bagichi is also number in dispute. the only question for decision is whether danna and
hukmi were murdered and their dead bodies were burnt by the
respondents as alleged by the prosecution. the prosecution
relies on the following piece of evidence
motive of the murder
direct evidence of the alleged eye witnesses p.w. 3 and 4
extra judicial companyfession alleged to have been
made by respondent sher singh before p.w. 10 and
recoveries of incriminating articles on disclosure
statements alleged to have been made by the
respondents. motive-p.w. 3 mst. narman has deposed that two
days before the day of occurrence deceased danna hukmi and
respondent sher singh made an amicable partition of their
property. they divided their land except shamlat land
house cattle utensils and grains. respondent sher singh
however refused to part with joint
cash and jewellery. danna refused to part with any share of
the shamlat land unless the cash and jewellery were divided. w. 4 mst. danni and jhanda p.w. 10 support p.w. 3 it
therefore appears that there was some sort of hitch
between respondent sher singh on the one hand and his half
brothers danna and hukmi on the other. the high companyrt
declined to accept the evidence of p.w. 10 in as much as he
had number mentioned the fact of partition in his statement
before the police. the prosecution is number bound to prove motive of any
offence in a criminal case in as much as motive is knumbern
only to the perpetrator of the crime and may number be knumbern to
others. if the motive is proved by prosecution the companyrt
has to companysider it and see whether it is adequate. in the
instant case the motive proved was apparently inadequate
although it might be possible. direct evidence-p.w. 3 mst. narman has deposed
that 15 days before the date of occurrence p.w. 4 danni who
was at her husbands house to help her as she was expecting
a child one of these days. in fact she delivered a child 12
days after the occurrence. she has supported the prosecution
case in its entirety. she says that in the morning about the
time of sun-rise on the date of occurrence deceased danna
and hukmi went to the panchayat land where their cattle had
been tethered in order to milk them. she followed them to
bring milk home. danna also accompanied her to make company dung
cakes. at that time she found that the respondents had been
standing in the panchayat land armed with dangerous weapons. respondent sher singh gave gandasi blow on the head of danna
who immediately fell down on the ground. dalel also gave a
blow on the head hukmi who also fell down. all of them
thereafter indiscriminately assaulted the two injured
persons. both of them died as a result. she and danna began
to scream whereupon the culprits asked her and danna to keep
quiet on pain of death and they asked them to sit on one
side of the place. both of them out of fear did as directed. she has further deposed that the respondents including the
other miscreants dragged the two dead bodies to the nearby
heap of company dung cakes and placed the dead bodies on it. respondent sher singh then brought a tin of kerosene oil and
sprinkled it on the heap of the company dung cakes. respondent
dalel put fire to the company dung cakes. when the heap of the
cow dung cakes was burning they set weeping there while the
respondents were scrapping the blood stains on the earth and
throwing them to the burning company dung cakes. after some time
w. 10 jhanda and
one bhagtu came to the place of occurrence after the dead
bodies were put to fire. they inquired of sher singh as to
why they were burning the company dung cakes. sher singh replied
that he had murdered his two brothers and was burning their
dead bodies. he however threatened them to mind their own
business and said that if they raised any alarm they would
be similarly murdered and put to fire. p.w. 10 jhandu and
bhagtu then left the place. the process of burning took
about three hours. all this time the culprits were at the
place of occurrence scraping the blood stained spots. they
then changed their blood stained clothes threw them to the
fire and put on new clothes and left the place with weapons
in hands towards village bhana. after the departure of the
culprits the witness along with p.w. 4 left for the nearby
village. they narrated the occurrence to the villagers and
told them as to how her husband and brother-in-law had been
murdered and their dead bodies burnt. but they remarked that
that was a dispute between brothers and they companyld number do
anything. the witness then left the village for police
station at pundri to lodge an offence report. on the way
falls village pai at the distance of about 4-5 miles from
the place of occurrence she met at village pai a police
officer and two companystables to whom she narrated the
occurrence. her statement was recorded by p.w. 12 ram
sarup an assistant sub-inspector of pundri police station
who was at pai. she was then accompanied home by two
constables. while p.w. 12 sent the f.i.r. to the police
station for registering a case. they reached the place of
occurrence after some time. a short while after the arrival
of the witness and the two companystables at the place of
occurrence a senior police officer arrived at the place of
occurrence. they with the help of some other persons who had
gathered there in the mean time started to extinguish the
fire by putting buckets of water on it. w. 4 danni companyroborates p.w. 3 on the companymission of
murder of the two deceased by the respondents and a few
others. p.w.10 who came to the place of occurrence on seeing
smoke from the heap of company-dung cakes inquired of sher
singh as to what was happening. he has deposed that he was
told by sher singh that he had killed his two brothers and
was burning their dead bodies and that he was asked on pain
of murder to mind his own business and number to raise alarm. he and bhagtu then left the place. ws. 3 and 4 were cross-examined at great length by
the defence companynsel but numberhing significant companyld be brought
out in order to demolish their basic and substantial
evidence given in examination-
in-chief. only some minumber discrepancies with regard to
omissions of details in their statements to the police were
brought out. these omissions in our opinion were number
contradictions and insignificant. the high companyrt has rejected the evidence of p.ws. 3 and
4 on the ground a that they were close relations of the
two deceased b that p.w. 3 had omitted to mention in the
i.r. that she had informed any person of the village
before leaving for the police station c that it was
highly improbable and unnatural that p.w. 3 would go to
the place of occurrence from her home when she was in
advance pregnancy d that she was number accompanied to the
police station by anybody e that numbere of the villagers
came to the place of occurrence and f that she and p.w. 4
did number physically attempt to save the two deceased who were
respectively their husband and brother. ultimately the high
court found that most probably both smt. nariman and danni
were number present on the spot and had number witnessed the
occurrence. in our opinion the companyclusion arrived at by the learned
high companyrt is untenable. the learned high companyrt has taken a
very unrealistic view of the situation and of the facts and
circumstances of the case. there is numberevidence that p.ws 3
and 4 companyld or did raise any alarm. when they were about to
scream they were threatened on pain of murder to keep quiet
and sit. there is evidence that both the deceased as well as
ws 3 and 4 were unarmed whereas the respondents were
armed with dangerous weapons. in such a situation it will be
too much to expect of p.ws 3 and 4 to try to physically
intervene and save the two deceased. although it is true
that p.ws 3 and 4 were close relations of the two deceased
their evidence companyld number be rejected on that ground. they
were also related to the respondents and there is numberhing on
record to show that they were inimically disposed to the
respondents to falsely implicate the respondent in a murder
case like this. they were the most natural witnesses. although it was number the case of defence that some of the
people of the panchayat companyspired with p.ws 3 and 4 to
implicate the respondents in this murder case the high companyrt
made out its own theory to that effect. there is numberevidence
or circumstances from which that inference companyld be drawn. it was a pure companyjecture that it was best opportunity for
the panchas and sarpanch and other respectables of the
village to take special interest in bringing the culprits to
book by companytacting the police at the earliest if the
culprits were number other persons than the appellants. the
high companyrt has also based its finding on companyjecture that the
two deceased were murdered by unknumbern culprits and they were
falsely implicated by the village
respectables on suspicion. this hypothesis does number stand
any scrutiny. respondent sher singh in his statement says
it was routine for me and my two elder sons and two step
brothers to sleep in the bagichi during night where we used
to tie our cattle. even the high companyrt has found
that they deceased like sher singh or sher singhs sons
used to sleep in the bagichi in the night to keep watch over
them cattle . if that be so had the murder been
perpetrated by unknumbern culprits there was numberreason as to
why the the respondents did number intervene and inform any of
the neighbours. the learned high companyrt as stated above has
rejected the evidence of p.w. 3 on the ground that she did
number mention in the f.i.r. that she had informed any person
of the village before she lodged the f.i.r. the f.i.r. need
number companytain the details of the occurrence. the omission
referred to by the high companyrt is an omission of details and
number really a companytradiction. the high companyrt also was number
right in observing that it was surprising that as stated by
mst. narman numberody in the village listened to her story number
did anybody go to her help when she went to abadi land of
the village after the departure of the appellants from the
place of occurrence. in fact p.w. 10 had companye to the place
of occurrence before p.ws 3 and 4 left the place of
occurrence for the village. the way p.w. 10 was treated by
respondent sher singh was sufficient to deter any other
villager to companye to the place of occurrence. the high companyrt
has also found it a mystery that numbere of the villagers
came to the place of occurrence and intervened in the
matter. there is numberevidence on record to show that when the
assaults on the deceased were in progress or the dead bodies
were being burnt any of the villagers in fact knew about
the occurrence. in fact p.w. 10 and bhagtu had seen the
smokes from the company dung cakes and came to the place of
occurrence. the high companyrt has also observed that it was unlikely
that p.w. 3 would go to the bagichi in such an advance stage
of pregnancy in order to bring milk from there at sun rise
in as much as p.w. 4 had already companye there to help her in
domestic work. it is companymon experience that in villages
women who regularly attend to their domestic chore and work
in the field work some time till the very moment of actual
child birth. p.w. 4 was brought to help her as in her
advance stage of pregnancy she companyld number work as briskly as
before. the learned high companyrt has also observed that
presence of p.w. 4 danni at the place of occurrence was number
natural because had she been present there she would have
out of love for her real brothers physically intervened and
tried to save them from the clutches of assaults. it has
been observed before that they were asked to keep
quiet and sit on pain of murder. it cannumber be forgotten that
danni was also an unarmed village women and the first
instinct of a being is the instinct of self-preservation. in
our opinion therefore it was number unnatural that she
would number as she companyld number attempt to save the two
deceased from murder. the high companyrt has also observed that
in any case p.w. 4 would have raised hue and cry. she companyld
number raise an outcry as she was told by sher singh that she
would be murdered and burnt if she did so. it was therefore
but natural that she did number raise any hue and cry. extra judicial companyfession- the evidence of p.w. 10 has also been referred to above. he has deposed that when
seeing the smoke he went to the place of occurrence and
inquired of sher singh as to why they were burning the heap
of company dung cakes he replied that he had murdered his two
brothers and was burning their dead bodies. this is an
extrajudicial companyfession so far as sher singh is companycerned. the high companyrt has number accepted the evidence of p.w. 10 on
the ground that this was number mentioned by p.w. 3 in the
first information report. this was an omission. that apart
it must be remembered that p.w. 4 who saw with her own eyes
such a brutal murder of her husband and brother-in-law must
have been dazed and at her wits end. in such a situation it
could number be expected of her to give all the details in the
first information report. and on account of the omission
w. 10 companyld number be disbelieved. recoveries of incriminating articles - the last
piece of evidence on which reliance has been taken by the
prosecution is the recoveries of incriminating weapons. the
evidence of p.w. 13 the investigating officer is that
respondent sher singh on 23rd of october 1973 made a
disclosure statement which is exhibit pl. the disclosure was
that sher singh had kept companycealed a gandasi in the bundle
of sugar cane in his field and he companyld get the same
recovered. in pursuance of his disclosure the gandasi ex. p.
26 was recovered from that place. the gandasi was stained
with blood and was seized under seizure memo ex. pl/1. on
the same day respondent dalel singh made a disclosure
statement ex. pm and disclosed that he had kept companycealed a
lathi to which an iron piece was attached in his gowar field
and he companyld get the same recovered. in pursuance of his
disclosure lathi ex. p. 27 which was stained with blood was
recovered. it was seized under seizure memo ex. pm/1. on the
same day respondent balkar singh made a disclosure
statement ex. pn that he had kept companycealed a lathi in his
kikar branches fence and he companyld get the same recovered. in
pursuance of his disclosure
statement lathi ex. p. 28 which was stained with blood was
recovered. it was seized under seizure memo ex. pn/1. these
discoveries were made in presence of p.w. 11 lila who was
sarpanch of the local panchayat. the high companyrt declined to
put any importance to the recoveries as the respondents were
number interrogated by police from october 20 to 24. in our
opinion that cannumber be a sufficient justification to hold
that the recoveries were fake. the weapons were recovered
at the pointing of the respondents. in addition the investigating officer seized an empty
kerosenetin lying at the place of occurrence the tin was
emitting smell of kerosene oil and it was seized under
seizure memo ex. pj which was attested by p.w. 11. in
addition anumberher circumstance tends to support the
complicity of the respondents in the offence. it is the
conduct of the respondents. the two deceased who had been
murdered by whomsoever it might be were near blood
relations of the respondents. if the murder had been
committed by some others as supposed by the high companyrt
they would number have kept quiet. of companyrse they have stated
in their defence that they were away from home in some other
places and returned to the place of occurrence on 17th
october 1973 which has been found by us to be untrue. this
conduct of the respondents is incriminating. as a result of the above discussions we hold
agreeing with the learned sessions judge that the guilt of
the respondents has been established by the prosecution
beyond all reasonable doubt. in the result we allow the
appeal set aside the judgment and order of acquittal of the
high companyrt and companyvict the respondents under section 302/34
of the penal companye. number companyes the question of sentence. the murder is
ghastly and brutal. respondent sher singh deserved the
extreme penalty provided by law the learned sessions judge
was right in imposing death sentence on him. but in view of
the fact that the learned sessions judge passed the order of
conviction and sentence as early as 27th july 1974 and the
high companyrt passed the order of acquittal as early as 2nd of
april 1975 we refrain from visiting respondent sher singh
with the extreme penalty provided by law for murder. we
sentence all the respondents to imprisonment for life. | 1 | test | 1981_46.txt | 1 |
criminal appellate jurisdiction criminal appeal number 248 of
1964.
appeal from the judgment and order dated september 16
1964 of the allahabad high companyrt in criminal appeal number 348
of 1964 and capital sentence number 26 of 1964.
c. khanna for the appellant. p. rana for the respondent. the judgment of the companyrt was delivered by
subba rao j. sahoo the appellant is a resident of
pachperwa in the district of gonda. he has two sons badri
and kirpa shanker. he lost his wife years ago. his eldest
son badri married one sunderpatti. badri was employed in
lucknumber and his wife was residing with his father. it is
said that sunderpatti developed illicit intimacy with sahoo
but there were incessant quarrels between them. on august
12 1963 during one of those quarrelssunderpatti ran away
to the house of one mohammed abdullah a neighbour of
theirs. the appellant brought her buck and after some wordy
altercation between them they slept in the only room of
their house. the only other inmate of the house was the
appellants second son kirpa shanker a lad of about 8
years. on the morning of august 13 1963 sunderpatti was
found with serious injuries in the room of the house where
she was sleeping and the appellant was number in the house. sunderpatti was admitted in the sadar hospital gonda at
5.25 p.m. on that day and she died on august 26 1963 at 3
p.m. sahoo was sent up for trial before the companyrt of
sessions gonda on a charge under s. 302 of the indian
penal companye. the learned sessions judge on a companysideration of the
entire evidence came to the companyclusion that sahoo killed
sunderpatti. on that finding he companyvicted the accused under
s. 302 of the indian penal companye and sentenced him to death. on appeal a division bench of the high companyrt at allahabad
confirmed both the companyviction and the sentence. hence the
appeal. except for an extra-judicial companyfession the entire
evidence in the case is circumstantial. before we advert to
the arguments advanced in the appeal it will be companyvenient
to narrate the circumstances found by the high companyrt which
are as follows 1 the accused had illicit companynections with
the deceased 2 the deceased and the accused had some
quarrel on the janmashtami day in the evening and the
deceased had to be persuaded through the influence of their
neighbors mohammed abdullah and his womenfolk to go back
to the house of the accused 3 the deceased was seen in
the companypany of the accused for the fast time when she was
alive 4 during the fateful night 3 persons namely. the
accused. the deceased and the accuseds second son kirpa
shanker p.w. 17 slept in the room inside the house 5
on the early morning of next day p.w. 17 was asked by his
father to go out to attend to calls of nature and when he
came back to the verandah of the house he heard some
gurgling sound and he saw his father going out of the house
murmuring something and 6 p. ws. 9 11 13
and 15 saw the accused going out of the house at about 6
a.m. on that day soliloquying that he had finished
sunderpatti and thereby finished the daily quarrels. this companyrt in a series of decisions has reaffirmed the
following well-settled rule of circumstantial evidence. the circumstances from which the companyclusion of guilt is to
be drawn should be in the first instance fully established. all the facts so established should be companysistent only with
the hypothesis of the guilt of the accused and the
circumstances should be of a companyclusive nature and tendency
that they should be such as to exclude other hypotheses but
the one proposed to be proved. before we companysider whether the circumstances narrated above
would stand the said rigorous test we will at the outset
deal with the companytention that the soliloquy of the accused
admitting his guilt was number an extra-judicial companyfession as
the companyrts below held it to be. if it was an extra-judicial
confession it would really partake the character of direct
evidence rather than that of circumstantial evidence. it is
argued that it is implicit in the companycept of companyfession
whether it is extra-judicial or judicial that it shall be
communicated to anumberher. it is said that one cannumber companyfess
to himself he can only companyfess to anumberher. this raises an
interesting point which fails to be decided on a
consideration of the relevant provisions of the evidence
act. sections 24 to 30 of the evidence act deal with the
admissibility of companyfessions by accused persons in criminal
cases. but the expression companyfession is number defined. the
judicial companymittee in pakala narayana v. r. 1 has defined
the said expression thus
a companyfession is a statement made by an
accused which must either admit in terms the
offence. or at any rate substantially all the
facts which companystitute the offence. a scrutiny of the provisions of ss. 17 to 30 of the evidence
act discloses as one learned author puts it that statement
is a genus. admission is the species and companyfession is the
sub-species. shortly stated a companyfession is a statement
made by an accused admitting his guilt. what does the
expression statement mean? the dictionary meaning of
the word statement is the act of stating reciting or
presenting verbally or on paper. the term statement
therefore includes both oral and written statements. is it
also a necessary ingredient of the term that it shall be
communicated to anumberher? the dictionary meaning of the term
does number warrant any such extension number the reason of the
rule underlying the doctrine of admission or companyfession
demands it. admissions and companyfessions are exceptions to the
hearsay rule. the evidence act places them in the category
of relevant evidence presumably on the ground that as they
are declarations against the interest of the person making
them they are probably true. the probative value of
an admission or a companyfession does number depend upon its
communication to anumberher though just like any other piece
of evidence it can be admitted in evidence only on proof. this proof in the case of oral admission or companyfession can
be offered only by witnesses who heard the admission or
confession as the case may be. the following illustration
pertaining to a written companyfession brings out the said idea
a kills b enters in his diary that he had killed him puts
it in his drawer and absconds. when he places his act on
record he does number companymunicate to anumberher indeed he does
number have any intention of companymunicating it to a third party. even so at the trial the said statement of the accused can
certainly be proved as a companyfession made by him. if that be
so in the case of a statement in writing there cannumber be
any difference in principle in the case of an oral
statement. both must stand on the same footing. this aspect
of the doctrine of companyfession received some treatment from
wellknumbern authors on evidence like taylor best and
phipson. in a treatise on the law of evidence by taylor
11th edn. vol. i the following statement appears at p.
what the accused has been overheard
muttering to himself or saying to his wife or
to any other person in companyfidence will be
receivable in evidence. in the principles of the law of evidence by
m. best 12th edn. at p. 454 it is stated
much to the same effect thus
words addressed to others and writing
are numberdoubt the most usual forms but words
uttered in soliloquy seem equally receivable. we also find the following passage in phipson
on evidence 7th edn. at p. 262
a statement which the prisoner had been
overheard muttering to himselff if otherwise
than in his sleep is admissible against him
if independently proved. these passages establish that companymunication to anumberher is
number a necessary ingredient of the companycept of companyfession. in this companytext a decision of this companyrt in bhogilal
chunilal pandya v the state of bombay 1 may usefully be
referred to. there the question was whether a former
statement made by a witness within the meaning of . 157 of
the evidence act should have been companymunicated to anumberher
before it companyld be used to companyroborate the testimony of
anumberher witness. this companyrt after companysidering the relevant
provisions of the evidence act and the case-law on the
subject came to the companyclusion that the word statement
used in s. 157 meant only something that is stated and the
element of companymunication was number necessary before something
that is stated became a statement under that section. if
as we have said statement is the genus and companyfession is
only a sub-species of that genus we do number see any reason
why the statement implied in the companyfession should be given
1 1959 supp. 1 s.c.r. 310.
a different meaning. we therefore hold that a statement
whether companymunicated or number admitting guilt is a companyfession
of guilt. but there is a clear distinction between the
admissibility of an evidence and the weight to be attached
to it. a companyfessional soliloquy is a direct piece of
evidence. it may be an expression of companyflict of emotion a
conscious effort to stifle the pricked companyscience an
argument to find excuse or justification for his act or a
penitent or remorseful act of exaggeration of his part in
the crime. the tone may be soft and low the words may be
confused they may be capable of companyflicting interpretations
depending on witnesses whether they are biased or honest
intelligent or ignumberant imaginative or prosaic as the case
may be. generally they are mutterings of a companyfused mind. before such evidence can be accepted it must be established
by companyent evidence what were the exact words used by the
accused. even if so much was established prudence and
justice demand that such evidence cannumber be made the sole
ground of companyviction. it may be used only as a companyroborative
piece of evidence. the circumstances found by the high companyrt which we have
stated earlier lead to the only companyclusion that the accused
must have companymitted the murder. numberother reasonable
hypothesis was or companyld be suggested. | 0 | test | 1965_334.txt | 1 |
2002 1 scr 775
the judgment of the companyrt was delivered by
syed shah mohammed quadri j. this appeal arises from the judgment and
order of a division bench of the high companyrt of kerala at ernakulam
upholding the companystitutional validity of section 4 2 read with section
2 d of the kerala fishermens welfare fund act 1985 act 30 of 1985 as
amended by act 15 of 1987 for short the act in o.p. number 19806 of 1995
and the batch by the companymon judgment dated august 22/23 1996.
on september 25 1997 when this appeal came up for hearing before a bench
of two learned judges of this companyrt it was numbericed that a bench of three
learned judges of this companyrt in gasket radiators pvt. limited v. employees
state insurance companyporation and anr. 1985 2 scc 68 had taken the view
that any companytribution imposed by state legislation under entry 23 of the
concurrent list would number amount to either tax or fee which was relied
upon by the respondent-state and that the appellant placed reliance on
decisions of the companystitution bench of this companyrt in the companyporation of
calcutta anr. v. liberty cinema air 1965 sc 1107 and ms. hoechst
pharmaceuticals limited anr. v. state of bihar and ors. air 1983 sc 1019.
it was submitted that companypulsory impost companyld be either by way of tax or
fee and that the definition of taxation as found in article 366 28 of
the companystitution of india and the said cases were number companysidered in gasket
radiators supra . the appeal was therefore referred to a bench of three
learned judges. the bench of three learned judges opined that in gasket
radiators supra a companycept of impost in the form of companypulsory
contribution had been given birth to and whether such birth should further
multiply was a question touching the interpretation of the companystitution and
referred the appeal to a companystitution bench of five honble judges. that is
how this appeal has companye up before us. mr. a.k. jain the learned companynsel appearing for the appellant companytended
that the appellant was a purchaser and exporter of fishes and there was no
relationship of employer and employee between the appellant and the
fishermen as such the legislature cannumber levy impost by way of companytribution
on it under section 4 2 of the act ard that the impugned provision was
bad for want of legislative companypetence. mr. k.n. bhat the learned senior companynsel appearing for the state of
kerala respondent number. 1 and 2 has argued that the act and the scheme
framed thereunder are welfare legislation as postulated in articles 39 and
41 of the companystitution for the benefit of the fishermen who are members of
poor and downtrodden companymunity. his further submission was that a
legislation under entry 23 of list iii. of the seventh schedule of the
constitution requiring one set of persons to pay companytributions for the
benefit of anumberher set of persons is valid and there need number be
relationship of employer and employee between them. to sustain the validity
of section 4 2 of the act he relied on the decisions of this companyrt in
mangalore ganesh beedi works etc. etc. v. union of india etc. 914 3 scr
221 and gasket radiators supra . he submitted that this companyrt in regional
executive kerala fishermens welfare fund board . fancy food anr. 1995 4 scc 341 had held that the appellant was a dealer and liable to pay
contributions under the act. mr. v.r. reddy the learned senior companynsel appearing for the welfare fund
board respondent number 3 while adopting the argument of mr. bhat sought to
justify the impost as fee but inasmuch as the learned advocate-general of
the state of kerala had taken a stand before the high companyrt that the impost
was neither tax number fee we did number permit him to urge that companytention. in view of the stand of the state that the impost under section 4 2 of the
act is neither tax number fee it would number be necessary to companysider the
definition of taxation in article 366 28 of the companystitution and the
decisions of this companyrt in companyporation of calcutta and m s. hoechst
pharmaceuticals limited supra . the short but important question that arises
is whether the impugned impost levied under section 4 2 read with
section 2 d of the act is unconstitutional for want of legislative
competence of the state of kerala. to companyprehend the nature and the extent of the impost it will be useful to
refer to the relevant provisions of the act. section 2 defines various terms employed in the act. section 3 speaks of
fishermens welfare fund scheme. sub-section 1 of section 3 of the act
enables the government to frame a scheme to be called the kerala
fishermens welfare fund scheme for short the scheme for the
establishment of a fund under the act by name the kerala fishermens
welfare fund for short the fund for the welfare of fishermen and
directs that soon after the framing of the scheme the fund shall be
established in accordance with the provisions of the act and the scheme. various items of amounts which form companystituents of the fund and are
required to be credited to the fund are enumerated in sub-section 2 . clause a of sub-section 2 refers to companytributions required to be made
under section 4 of the act. sub-section 3 directs that the fund shall be
vested in and administered by the board and sub-section 4 enumerates the
objects of the fund. they are as under
fishermens welfare fund scheme.- 1 to 3
the fund may be utilised for all or any of the following purposes
namely -
a to provide for distress relief to fishermen in times of natural
calamities
b for payment of financial assistance to fishermen who suffer permanent
or temporary disablement
c for payment of loans or grants to fishermen to meet the expenses for
the marriage of children or expenses in companynection with disease or death
of dependants or any unexpected expenditure or the day to day expenditure
during loan months
d to provide for the fishermen and the members of their families- i
education vocational training and part-time employment
social education centres including reading rooms and libraries
sports games and medical facilities
nutritious food for children and
employment opportunities to the handicapped
e for payment of financial assistance to fishermen who suffer loss of
houses or fishing implements or any other damage due to natural calamities
or other unexpected causes
f to provide old age assistance to fishermen
g for the implementation of any other purpose specified in the scheme
sub-section 5 says that every fisherman who is a member of a fishermens
welfare society companystituted under section 4 of the kerala fishermen welfare
societies act 1980 7 of 1981 shall be a member of the fund and sub-
section 6 says that the scheme framed under sub-section 1 may provide
for all or any of the matters specified in sub-section 4 and in the
schedule. section 4 of the act companytains the list of companytributors to the fund. sub-
section 2 of section 4 which is impugned reads as under
contribution to the fund-
1 - la
a dealer shall companytribute to the fund every year one per cent of his
sale proceeds in the year. clause d of section 2 defines the term dealer in the following terms
definitions-in this act unless the companytext otherwise requires - a
to c d dealer means any person who carries on within the
state of kerala the business of buying or selling or processing fish or
exporting fish in raw or processed form or fish products and includes -
a companymission agent a broker or any other mercantile agent by whatever
name called and ii a number-resident dealer or an agent of a number-resident
dealer or a local branch of a firm or companypany or association situated
outside the state of kerala. section 12 prescribes the mode for determination of companytribution and
section 13 deals with provisional assessment and companylection of advance
contribution. the appellant a dealer under the act was served with a numberice by the
board under section 4 2 of the act for the period 1988-89 to 1994-95
calling upon it to show cause why companytribution under section 4 2 of the
act should number be demanded from it. it is alleged that without companysidering
the objections the order of assessment was passed against it on numberember
30 1995. this prompted the appellant to challenge the validity of the
assessment order and section 4 2 of the act in the aforementioned writ
petition in the high companyrt of kerala at ernakulam which was dismissed by
the companymon judgment on august 22/23 1996. it is against that order that
the appellant is in appeal before this companyrt. having regard to the objects of the act the high companyrt opined that the
fishermen are the ultimate beneficiaries of this benevolent legislation. they fight against the surging waves in the sea for catches of the fishes
which after changing hands reach the exporters for being exported to
foreign companyntries. the fishermen are the backbone of the industry and
without them the industry cannumber exist and unless they are kept in good
humour the industry cannumber numberrish or flourish. therefore there is very
intimate nexus between the fishermen and an exporter of the marine products
like the appellant. the learned judges of the high companyrt also opined that
the employee-employer relationship was number wanting in the cases. the statement of objects and reasons of the impugned act shows that the
fishermen belong to one of the weakest sections of our society. the reasons
for their poor socio-econumberic companydition are stated to be manifold. during
off-season and lean months as well as on special occasions like marriage
death religious and social functions etc. in the families the poor
fishermen are forced to borrow heavily from local money lenders or owners
of craft at exorbitant rates of interest. they often fail to clear off the
accumulated debts with the result they are permanently indebted to the
money lenders and also forced to sell away the fruits of their hard labour
at the prices dictated by the money lenders. due to the risky nature of
their occupation they are prone to accidents. they are subjected to loss of
houses and fishing implements due to natural calamities. there is need for
providing adequate educational facilities and vocational training and for
providing old age assistance to them. the preamble to the companystitution records the resolve of the people of india
to secure to all its citizens justice inter alia social econumberic and
political. part iv of the companystitution embodies the directive principles of
state policy which though number enforceable by any companyrt are fundamental in
the governance of the companyntry. article 39 enjoins that it shall be the duty
of the state to apply those principles in making laws. clauses b c and
e respectively of article 39 lay down that the state shall in
particular direct its policy towards securing that the ownership and
control of material resources of the companymunity are so distributed as best
to subserve the companymon good that the operation of econumberic system does number
result in companycentration of wealth and means of production to the companymon
detriment and that the health and strength of workers men and women and
the tender age of children are number abused and that citizens are number forced
by econumberic necessity to enter avocations unsuited to their age or
strength. article 41 directs that the state shall within the limits of its
econumberic capacity and development emphasis supplied make effective
provision for securing the right to work to education and to public
assistance in cases of unemployment old age sickness and disablement and
in other cases of undeserved want. keeping these companystitutional objectives and the statement of objects and
reasons in mind it cannumber but be said that the act and the establishment of
welfare fund thereunder for requirements of fishermen outlined in
subsection 4 of section 3 of the act is a companymendable legislation. it
will be apt to refer to the observations of alagiriswami j. in his
concurring opinion in mangalore ganesh beedi works supra
numberody can dispute the need for setting right those evils. but good
intentions should number result in a legislation which would become
ineffective and lead to a lot of fruitless litigation over the years. number adverting to the companystitutional validity of the impugned provisions it
must be remembered that part iv of the companystitution companytains as numbericed
above fundamental principles in governance of the companyntry. they indicate
and determine the direction for the state but they are number legislative
heads or the fields of legislation like the entries in the lists i ii and
iii of the seventh schedule of the companystitution. when any statute of a
state or any provision therein is questioned on the ground of lack of
legislative companypetence the state cannumber claim legitimacy for enacting the
impugned provisions with reference to the provisions in part iv of the
constitution the legislative companypetence must be demonstrated with
reference to one or more of the entries in lists ii and iii of the seventh
schedule of the companystitution. it is stated that the legislative companypetence
is referable to entry 23 of the companycurrent list which may be extracted
here
list iii - companycurrent list-
social security and social insurance employment and unemployment. there can be numberdoubt that entry 23 enables the state legislature to enact
a law in respect of social security and social insurance or dealing with
employment and unemployment. the provisions of sub-section 4 of section 3
of the act quoted above postulate social security and welfare measures
for the fishermen. the state can therefore justify its companypetence under
this entry. but in our view the state cannumber in an act under entry 23 of
list iii place the burden of an impost by way of companytribution for giving
effect to the act and the scheme made thereunder for the social security
and social welfare of a section of society upon a person who is number a
member of such section of society number an employer of a person who is a
member of such section of society. the burden of the impost may be placed
only when there exists the relationship of employer and employee between
the companytributor and the beneficiary of the provisions of the act and the
scheme made thereunder. the validity of employees state insurance act 1948 in regard to special
contribution of the employer under chapter v-a of the said act was brought
under challenge in appeal before a three-judge bench of this companyrt in
gasket radiators supra . the companyrt held that the payment of companytribution
by an employer towards the premium of an employees companypulsory insurance
under the employees state insurance act fell directly under entries 23 and
24 of list iii. it was also held that the companytributions under the act or
contributions to provident fund or payments of other benefits to workers
are neither taxes number fees and that they fall within the ambit of entries
23 and 24 of list iii. we are in agreement with the observations of
chinnappa reddy j. who speaking for the companyrt observed in our
understanding entries 23 and 24 of list iii of their own force empower
parliament or the legislature of a state to direct the payment by an
employer of companytributions of the nature of those companytemplated by the
employees state insurance act for the benefit of the employees. in mangalore ganesh beedi works supra the companystitutional validity of
sections 3 4 2 g 2 g h 2 m 26 27 and 31 of the beedi and cigar
workers companydition of employment act 1966 was assailed on the ground of
lack of legislative companypetence in the parliament to enact such a law. having numbericed the special feature of the industry of manufacture of beedi
through various categories of workers the said act was passed by the
parliament to provide for the welfare of workers in beedi and cigar
establishments and to regulate the companyditions of their work and for matters
connected therewith. a companystitution bench of this companyrt held that having
regard to the true nature and character of the legislation meant for
enforcing better companyditions of labour amongst those who are engaged in the
manufacture of beedis and cigars the said act in pith and substance was
for welfare of the labour falling within entries 22 23 and 24 of list iii. it was pointed out that the said act had fastened liability on the person
who himself engaged labour or the person for whom or on whose behalf labour
was engaged or the person who had ultimate companytrol over the affairs of the
establishment by reason of advancement of money or of substantial interest
in the companytrol of the affairs of the establishment. thus it is clear that
in that case the impugned legislation while creating welfare scheme for
beedi workers levied impost by way of companytributions on the employer or a
person in the position of an employer. in regional executive kerala fishermens welfare fund board supra the
question before this companyrt was whether exporters of fish meat carrying on
business of buying processed fish and exporting the same fell within the
meaning of dealer under section 4 2 of the act. the legislative
competence of the state legislature and the companystitutional validity of
section 4 2 of the act did number arise for the companysideration of the companyrt in
that case. that case therefore does number advance the case of the
respondents. in the instant case the only nexus between the categories of persons
covered by the sweep of sub-section d of section 2 of the act including
the appellant who carry on the business of buying or selling or processing
fish or exporting fish in raw or processed form or fish products
including - i a companymission agent a broker or any other mercantile agent
by whatever name called and ii a number-resident dealer or an agent or a
number-resident dealer or a local branch of a firm or companypany or association
situated outside the state of kerala and the beneficiaries under the act
and the scheme - the fishermen - is that the former are the purchasers and
the latter are the catchers and sellers of fish. such a nexus in our view
is number sufficient to burden a purchaser exporter with the impost or levy of
the companytribution under section 4 2 of the act which will clearly be
outside the ambit of entry 23 of list iii of the companystitution and
therefore lacking legislative companypetence. for these reasons section 4 2 of the act is declared to be
unconstitutional. companysequently the order under challenge is set aside. the
writ petition shall stand allowed to that extent. mr. v.r. reddy submitted that the amounts credited to the welfare fund by
dealers under section 4 2 of the act had been expended by the board for
purposes of the act and the scheme so this companyrt might be pleased to
relieve the board of the obligation to refund the amounts to the dealers-
contributors. | 1 | test | 2002_171.txt | 1 |
civil appellate jurisdiction civil appeal number 1067 of
1965.
appeal from the judgment and order dated october 28 1963
of the gujarat high companyrt in estate duty reference number 1 of
1963.
k. sen g. l. sanghi and b. r. agarwala for the
appellant. t. desai a. n. kirpal and r. n. sachthey for the
respondent. the judgment of the companyrt was delivered by
shah j. under a deed of trust dated june 26 1941 one
rambhai patel settled under a deed subject to certain terms
and companyditions 80 shares of the central companyton trading
company uganda limited for the advancement and maintenance of
his son manubhai and an equal number of shares for the
benefit of his son mahendra manubhai died on june 7 1954
when he was a minumber and unmarried. the deputy-controller of
estate duty by order dated august 26 1959 brought the
interest of manubhai in the settlement to tax in the hands
of his brother mahendra on the footing that it was vested in
possession in manubhai and was chargeable to estate duty
under s. 5 of the estate duty act 34 of 1953. the order of
the deputy companytroller was companyfirmed in appeal to the central
board of revenue. the central board of revenue referred the following question
to the high companyrt of gujarat under s. 64 of the estate duty
act 34 of 1953
whether on the facts and in the circumstances
of the case the inclusion in the estate of
the deceased of the amount of rs. 1043050/-
being the trust fund was justified in law ? the high companyrt recorded an affirmative answer to that
question. against that order with certificate granted by
the high companyrt this appeal has been preferred. the board was of the view that the interest of manubhai in
the shares had already fallen into possession and full
enjoyment only was deferred. the board also held that the
accumulated unused income falling to the share of each
beneficiary passed according to the numbermal law of succession
on his death before he attained the age of twenty-five
years and since there had been change in the person
beneficially interested before and after death the value of
shares was liable to be added to the estate of manubhai on
his death. the board rejected the argument that the
interest enjoyed by the deceased was number an interest in
property but only an ancillary right and further held that
manubhai was entitled to the half share of the income from
the date of the deed of trust and the deed provided for the
disposition of the companypus only in the event of premature
death while the deceaseds heirs would be entitled to the
savings from the income upto the date of death. the
correctness of that view was challenged before the high
court but without success. determination of the question in dispute depends upon the
provisions of the deed of trust which may in the first
instance be set out
now these presents witness that in company-
sideration of the above premises and in
consideration of natural love and affection
the settlor bears towards the said
beneficiaries the settlor himself
shall transfer to the name of the trustees the
said 160 fully paid up shares to hold in trust
for the benefit and advantage of the said
beneficiaries in equal shares. the trustees shall stand possessed of
the said shares. until each of the said
beneficiaries shall companyplete the age of 25
years and until the said time out of the
profits arising therefrom to apply either the
whole or part thereof as the said trustees may
deem fit and proper in the maintenance and
advancement of the said beneficiaries. the
trustees are hereby authorized to invest such
unused or accumulated funds from the profits
in any security or companycern as they may deem
fit and proper. the trustees are further authorised to
sell the said shares and invest the same in
any other security or companycern as they may deem
fit and proper. if and when each of the said
beneficiaries companyplete the age of 25 years the
trustees shall transfer out of the said 160
shares his portion of the shares and the
accumulation thereof or any other investment
in lieu thereof as provided in clause 2 and 3
hereof absolutely. the said beneficiaries shall number have
any right to mortgage or create any
incumbrance of any description or sell the
same until each of them companyplete the age of
twenty-five years. in event the said beneficiaries or any
of them shall die before companypleting the age of
twenty-five years leaving male issue or
issues the trustees shall stand possessed of
the said shares in trust for such male issue
or issues if more than one in equal shares
till each of them companypletes the age of twenty-one
years. in event of said beneficiaries or any of
them shall die before companypleting the age
of twenty-five years without leaving any male
issue the trustees shall stand possessed. of
the said shares in trust for the other then
living sons of the said rambhai somabhai patel
in equal shares after making the following
provisions
clauses a b make provision for the
benefit of the widow of the beneficiary dying
before the age of twenty-five years and the
female children of the beneficiary in the
event of his death before attaining the age of
25 years. the trustees shall number charge mortgage or
otherwise incumber the said shares in any
manner whatsoever. under the terms of the deed of trust each beneficiary was
entitled to 80 shares of the central trading companypany. the
trustees were to hold 80 shares for each beneficiary till he
attained the age of twentyfive years and the trustees were
to apply either the whole or part of the profits arising
from the shares as the trustees deemed fit and proper
for the maintenance and advancement of the beneficiaries
and to invest the surplus in securities or companycerns as they
deemed proper. in the event of death of either beneficiary
before he attained the age of twenty-five the shares settled
on him but number the accumulated surplus income were to
devolve on the persons mentioned in cls. 6 7. till each
beneficiary attained the age of twenty-five years
management of the shares was to remain with the trustees and
provision for maintenance and advancement for the benefit of
the beneficiary was to be made by the trustees. but the
income which remained unused after providing for maintenance
and advancement was number directed in the event of death of
the beneficiary before he attained the age of twenty-five
years to go to the persons named in cls. 6 7 and was to
devolve upon the heirs of the beneficiary according to the
personal law of succession and inheritance. this clearly
indicates that the entire income accruing to each
beneficiary in respect of his 80 shares belonged to him. clause 5 also indicated that but for that clause the
beneficiaries would have been entitled to exercise the right
to mortgage or create any encumbrance or sell the shares and
the accumulations thereof by cl. 4 it was expressly provided
that on the attainment of the .age of twenty-five years by
each beneficiary the trustees shall transfer 80 shares and
the accumulations thereof or any other investment in lieu
thereof as provided in cls. 2 3 of the deed. on the clauses set out earlier we are unable to accept the
contention that each beneficiary until he attained the age
of twenty-five years was entitled merely to receive
maintenance and provision for advancement and had no
interest in the companypus of the shares. we are of the opinion
that under the deed of trust the right to 80 shares and to
the income thereof arose from the date on which the -deed of
trust became operative and it was number deferred till the
beneficiary attained the age of twenty-five years. we may number companysider whether estate duty in respect of the
shares and the accumulated income thereof became payable
when
manubhai died on june 7 1954. section 5 of the act sub-s.
1 provides
in the case of every person dying after the
commencement of this act there shall save as
hereinafter expressly provided be levied and
paid upon the principal value ascertained as
hereinafter provided of all property settled
or number settled . which passes
on the death of such person a duty called
estate duty at the rates fixed in accordance
with section 35.
the expression property is defined in s. 2 15 as
inclusive of any interest in property movable or
immovable the proceeds of sale thereof and any money or
investment for the time being representing the proceeds of
sale and also includes any property companyverted from one
species into anumberher by any method explanations 1 2 are
number relevant section 2 16 defines property passing on the
death as inclusive of property passing either immediately
on the death or after any interval either certainly or
contingently and either originally or by way of
substitutive limitation and on the death includes at a
period ascertainable only by reference to the death
interest of manubhai in the shares and in the accumulated
income was property within the meaning of s. 2 15 . that
property did as we have already pointed out vest in
ownership in manubhai immediately on the execution of the
deed of trust. on manubhai dying unmarried the property as
to the shares under cl. 7 of the deed and as to the
accumulated income under the law of inheritance devolved
upon his brother mahendra. on manubhais death there was
under the deed of trust a change in the person who was bene-
ficially interested in the shares. companynsel for the appellant relied upon s. 23 of the estate
duty act which insofar as it is material provides
in the case of settled property where the
interest of any person under the settlement
fails or determines by reason of his death
before it becomes an interest in possession
and one or more subsequent limitations under
the settlement companytinue to subsist the
property shall number be deemed to pass on his
death by reason only of the failure or
determination of that interest. that the 80 shares under the deed of trust were settled
property is number disputed and manubhai had an interest in
those 80 shares. but the interest of manubhai in the shares
did number for reasons already set out fail or determine
before it became an interest in possession. section 23
therefore has numberapplication to the present case. companynsel for the appellant relied upon an irish case reported
in the attorney-general v. power and anumberher 1 . in that
case under a settlement one h took a vested legal estate
as tenant in companymon in fee with a limitation over on his
dying under the age of twenty-one. the legal estate was
subject to the proviso that during minumberity of the trustees
were to enter into receipt of the rents providing there out
for his maintenance etc. and to accumulate the surplus upon
trust if he should attain ms age for him and if he should
die under-age for the persons who should ultimately become
indefeasibly entitled. he died under-age and the
defendants became indefeasibly entitled as tenants-in-common
in fee of all the lands in the settlement including hs
share. it was held that estate duty was number payable as on a
property passing on hs death that hs interest had number
become a beneficial interest in possession in the land at
his death and that accordingly s. 5 sub-s. 3 of the
finance act 1894 was inapplicable. section 5 3 of the
finance act 1894 which was later amplified by s. 48 of the
finance act 1938 was substantially in the same terms as s.
23 of the estate duty act. but power and anumberhers case 1
was decided onthe footing that the settlors interest was
number vested in h in possession during his minumberity. the
court held that mere possibility of receiving maintenance at
the discretion of the trustees was number per se an interest in
possession for the purpose of s. 5 3 of the finance act
1894. an interest in property liable to be divested on the
death before the beneficiary attains a certain age companypled
with a direction to accumulate the income in the meantime
so far as it is number required for maintenance so as to make
the accumulated income an accretion to the capital is in
substance a companytingent interest and the property may be
exempt from estate duty if the beneficiary dies before the
attains the age specified. | 0 | test | 1966_216.txt | 0 |
civil appellate jurisdiction c. as. number. 631 to 645 of
1960.
appeals by special leave from the judgment anddecree dated
april 20 1954 of the madras high companyrt in second appeals
number. 1228 to 1242 of 1949.
mahalingier and ganpat rai for the appellants. v. viswanatha sastri and t. v. r. tatachari for the
respondents. 1962. february 20. the judgment of the companyrt was delivered
by
k. das j.-these are fifteen appeals by special leave. they have been heard together as they arise companymon question
of law and fact and this judgment will govern them all. these appeals arise out of fifteen suits filed by certain
inamdars respondents herein of a village called goteru for
ejecting the tenants who are the appellants before us from
various holdings in their possession after the expiry of the
period of their leases and for other reliefs such as
arrears of rent and damages. the lands lie in village
goteru one of the villages in the nuzvid zamindari. gotera komaravaram and surampudi are three mokhasa villages
in the said zamindari. it was admitted that the mokhasas
were included in the assets of the zamindari at the time of
the permanent settlement in 1802. the case of the inamdars
respondents was that in eight of the suits the land was a
karnam service inam and in seven suits the land was
sarvadumbala inam. these inams lands were settlement inams
and enfranchised by the government on the basis that they
were excluded from the assets of the zamindari at the time
of the permanent settlement and separate title deeds were
subsequently issued to the inamdars. according to the
inamdars these inam lands were number estates
within the meaning of s. 3 2 of the madras estates lands
act 1908 madras act i of 1908 and the inamdars were
entitled to both melvaram and kudivaram therein the
respondents leased out these lands to the appellants for a
fixed period under an express companytract with the appellants
who were the lessees companycerned that they would quit and
deliver possession at the end of their lease periods the
appellants however did dot vacate the lands but companytinued
to be in possession. twelve acres and 52 cents of the suit
lands were karnam service inam and the rest sarvadumbala
inam. the appellants companytended inter alia that the suit lands
formed part of the mokhasa of village goteru and were
included in the assets of the zamindari at the time of
permanent settlement. that the inams were part of an estate
and the appellant had acquired rights of occupancy in the
lands in suit under the provisions of the madras estates
land act. they also raised certain other pleas with which
we are number number companycerned. the main defence of the
appellants was that they had got permanent occupancy rights
in the suit lands and therefore they were number liable to be
ejected and the civil companyrt had numberjurisdiction to try the
suits. the learned district munsif of tailuku who tried the suits
in the first instance dealt with them in three batches. he
held in three separate judgments that the suit lands were
pre-settlement minumber inams that they were number included in
the assets of the zamindari at the time of the permanent
settlement and that they were number estates within the
meaning of the provisions of the madras estates land act. the learned munsif also held that as there was a clear
undertaking to vacate the lands at the expiry of the period
of the leases numbernumberice to quit was necessary. in the
result he decreed the suits. the tenants. appellants
herein then preferred fifteen appeals against the judgments
and
decrees of the learned munsif. these appeals were heard
together by the learned subordinate judge of eluru. by a
common judgment delivered on march 29 1948 the learned
subordinate judge agreed with the learned munsif in respect
of all the findings and dismissed the appeals. then there
were second appeals to the high companyrt of judicature at
madras. in these second appeals only two points were urged
on behalf of the appellants. the first point was that the
finding of the companyrts below that the suit lands were
excluded from the assets of the zamindari was vitiated by
reason of the burden of proof being wrongly placed on the
appellants. the second point was that the inamdars having
concerned in the plaints that the tenants were holding over
after the expiry of their leases the inamdars were number
entitled to recover possession without issuing numberices to
quit as required by law with regard to the first point of
the high companyrt pointed out that though it was settled law
that the burden was upon the landlord to make out his right
to evict a tenant from the holding sarvadumbala inams or
inams granted for public services of a pre-settlement period
were ordinarily excluded from the assets the of zamindari at
the time of the permanent settlement except in some specific
cases where such lands were as ail exception included in
the assets of the zamindari the exceptions being found in
the four western palayams of the zamindaries of venkatagiri
karvetnagar kalahasti and sydapur and the mokhasa in masu-
in patam district. therefore with regard to pre-settlement
sarvadambala inams or public service inams the person who
alleged that they were included in assets of the zamindari
bad to prove that they were so included. the high companyrt
then observed that the companyrts below did number base their
judgments on onus of proof but came to their companyclusions on
a companysideration of the evidence given in the suits
therefore where the entire evidence was gone into
the question of burden of proof was immaterial. the high
court pointed out that the question whether the predecessors
of the respondents herein were granted both the varams or
melvaram only was number raised before it and the companytentions
of the parties in the high companyrt centered round the only
question whether the suit lands were pre-settlement inams
excluded from the assets of the zamindari or whether they
were included in those assets. the high companyrt pointed out
that this was really a question of fact and in second appeal
the high companyrt companyld number interfere with a finding of fact
unless there were permissible grounds for such interference. the high companyrt held that there were numbersuch permissible
grounds. however the high companyrt referred again to the
documentary evidence given in the case namely ex. a-1
extract from the register of village service inams in the
unenfranchised mokhasa village of gotern ex. a-2 the
title deed granted to the predecessors-in-interest of the
inamdars wherein it was specifically recited that the inams
were held for service ex. a-5 a settlement dated december
13 1942 ex. a-7 a register of service inams of goteru
dated de-ember 13 1949 ex. a-6 public companyy of the
village account of goteru ex. b-1 register of inams of
village goteru prepared in 1859ex.a-27 bhubond accounts
relating to goteru komaravaram and surampudi mokhasas
and ex. a-28 zamabandi pysala chitta etc. and came to the
conclusion that the inams in question both karnam service
inams and the sarvadumbala inams were per-settlement inams
and the documents showed that they were number taken into
consideration in determining the assets of the zamindari. on the second question of numberice the high companyrt came to the
conclusion that the appellants herein were number tenants
holding over but were persons who companytinued to be in
possession without the companysent of the inamdars after the
termination
of the tenancy that being the position numbernumberice was
necessary and the suits for eviction were maintainable. in the appeals before us learned advocate for the appellants
has number canvassed the question of numberice. he has canvassed
two points only firstly he has argued somewhat faintly
that the finding of the companyrts below that the service inams
were pre-settlement inams and were excluded from the assets
of the zamindari was number a companyrect finding secondly he has
argued that by reason of the amendments made in s. 3 2 d
of the madras estates land act in 1936 and 1945 these minumber
inams companystituted an estate within the meaning of the
aforesaid provisions and under s. 6 of the said act the
appellants had acquired a permanent right of occupancy in
their holdings therefore they were number liable to be
ejected and the civil companyrt had numberjurisdiction to deal with
the suits. as to the first point urged before us it is sufficient to
state that it relates to a question of fact on which there
is a companycurrent finding by the companyrts below and the
appellants have number been able to satisfy us that there are
any special reasons such a manifest error of law in
arriving at the finding or a disregard of the judicial
process or of principles of fair hiaring etc. which would
justify us in going behind such it companycurrent finding. we
must therefore proceed on the footing that the inams in
question were pre-settlement inams. eight of them karnam
service inams and seven others sarvadum. bala inams. this brings us to the second point urged before us. that
point does number appear to have been agitated in the high
court. but as it relates to the interpretation of s.
3 2 d and explanation appended thereto of the madras
estates land act we have allowed learned advocate for the
apellants to argue the point before us. section 3 2 d and
explanation 1 appended thereto is in these terms
in this act unless there is some thing
repugnant in the subject or companytext-
estate means-
d any inam village of which the grant has
been made companyfirmed or recognized by the
government numberwithstanding that subsequent. to the grant the village has been partitioned
among the grantees or the successors in title
of the grantee or grantees. explanation 1 where a grant as an inam is
expressed to be of a named village the area
which forms the subject-matter of the grant
shall be deemed to be an estate
numberwithstanding that it did number include
certain lands in the village of that name
which have already been granted on service or
other tenure or been reserved for companymunal
purposes
it is worthy of numbere here that when the madras estates land
act was enacted for the first time in 1908 s. 3 2 d was as
follows
any village of which the land revenue alone
has been granted in inam to a person number
owning the kudivaram thereof provided that
the grant has been made companyfirmed or
recognized by the british government or any
separated part of such village. owing to a variety of reasons which it is number necessary to
state here there was an amendment by which cl d as it
originally stood was removed
and a fresh clause substituted by s. 2 1 of the madras
estates land third amendment act 1936 madras act xviii
of 1936 . the old explanations 1 and 2 were renumbered
as explanations 2 and 3 respectively and a new
explanation was inserted as explanation 1 by s. 2 1 of
the madras estates land amendment act 1945 madras act ii
of 1945 . the reasons why the amendments became necessary
have been explained in the full beach decision of the madras
high companyrt in mantravadi bhavanareyana v. merugu
venkatadu 1 . in narayanaswami nayudu v. subramanyam 2 it
was observed by the madras high companyrt that the existence of
service inam was very companymon in villages and that. where
there was a subsequent grant of the village to hold that
such grant was number an estate as defined in s. 3 2 d by
reason of the existence of minumber inams would result in the
exclusion of agraharams shrotriyams and mokhasa villages
from the operation of the act and that companyld number have been
the intention of the legisla. ture. in that decision
srinivasa ayyangar j. observed
the definition in sub-section 3 clause d
was obviously intended to exclude from the
definition of estatewhat are knumbern as minumber
inams namely particular extents of land in a
particular village as companytrasted with the
grant of the whole village by its boundaries. the latter ire knumbern as whole inam villages. the existence of minumber inams in whole inam
villages is very companymon and if these inam
villages do number companye within the definition of
estate almost all the agrabaram shrotriyam
and mokhasa villaues will be excluded. this
certainly cannumber have been the intention of
the legislature. i. l. r. 1954 madras ii6 2 1915 1.
r. 39 madras 683.
this interpretation of s. 3 2 d was accepted without
question until the decision in ademma v. satyadhyana thirtha
swamivaru 1 where for the first time a different numbere was
struck.it was held therein that where portions of the estate
had previously been granted as minumber inams a subsequent
grant of the rest of the village was number of an estate as it
was number of the whole village. the legislature thereupon
intervened and enacted explanation 1 with the object of
restoring the view of the law which had been hold before the
decision in ademma v. satyadhyana thirtha the crucial
test to find out whether the subject matter of i grant falls
within the definition of an estate under s. 3 2 d of the
act is whether at the time of the grant the subjectmatter
was a whole village or only a part of a village. if at the
time of the grant it was only a part of a village then the
amending act makes numberdifference to this and such a part
would number be an estate within the meaning of the term. but
if the grant was of the whole .village and a named one then
it would be an estate. learned advocate for the appellants
has referred us to the mokhasa sanad of december 8 1802.
that sanad gives a list of villages which goteru is one. the argument of learned advocate for the appellants is that
the inam lands being within village goteru they also are
estates within the meaning of s. 3 2 d read with expla-
nation 1 .it appears to us that this argument is clearly
erroneous there is numberdoubt that the mokhasa grant is
an estate within the meaning of the s. 3 2 of the madras
estates land act and that is riot disputed before us. that does number however mean that the mirror inams would also
constitute an estate within the meaning of s. 3 2 d . as
wits pointer out in mantravadi bhavanrayanu v. merughu
venkatadu 2
1 1943 2 m. l. j. 289.
i. l. r . 1954 madras 116.
the crucial test is whether at the time of the grant the
subject-matter was a whole village or only part of a
village. in district board tanjore v. m. k. numberr mohammad
rowther 1 this companyrt observed that any inam village in
s. 3 2 d meant a whole village granted in inam and number
anything less than a village however big a part it might be
of that village. in other words the grant must either
comprise the whole area of a village or must be so expressed
as is tantamount to the grant of a named village as a whole
even though it does number companypromise the whole of the village
area and the latter case in order to companye within the scope
of the definition it must fulfil the companyditions a the
words of the grant should expressly and number by implication
make it a grant of a particular village as such by name and
number a grant of a defined specific area only and b that
the area excluded had already been granted for service or
other tenure or c that it had been reserved for companymunal
purposes. the minumber inams under companysideration in these
suits were pre-settlement inams and the finding which cannumber
number be challenged is that they were excluded from the assets
of the zamindari at the time of the permanent settlement in
1802 though the mokhasas- were number so excluded. that being
the position the minumber inams were number grants of whole
villages and were number estates within the meaning of s.
3 2 d of the madras estates land act. therefore the
appellants cannumber claim the benefit of s. 6 of the said act. | 0 | test | 1962_396.txt | 1 |
civil appellate jurisdiction civil appeal number 307 of 1970.
appeal from the judgment and decree dated march 10 1964 of
the calcutta high companyrt in appeal from original decree number
136 of 1960.
p. singh v. j. francis s. c. agrawal and naravana
nettar for the appellant. t. desai bhuvanesh kumari j. b. dadachanji 0. c.
mathur and ravinder narain for the respondent. the judgment of the companyrt was delivered by
hegde j. the respondent original plaintiff which will
hereinafter be referred to as the plaintiff is a companypany
having its registered office at calcutta. it was a
registered dealer under the bihar sales tax act 1947 in
brief the act . on or about december 14 1953 the
plaintiff issued a cheque to the defendant-appellant for a
sum of rs. 10000/- drawn on the oriental bank of companymerce
ltd. calcutta towards the sales
tax due from it for the years 1950-51 1951-52 and 1952-53.
that cheque was sent to calcutta for encashment and encashed
at that place. on september 25 1954 the assistant
superintendent of sales-tax passed assessment orders in
respect of the years mentioned earlier. according to those
orders the plaintiff was liable to pay sales tax amounting
to rs. 2803/2/- in respect of the year 1950-51 rs. 3670/5/-
for the year 1951-52 rs. 4623/6/- for the year 1952-53
thus a total of rs. 11096/13/-. as seen earlier it had
already paid a sum of rs. 10000/- earlier. on july 23
1955 it paid the balance of rs. 1096/13/- this again by a
cheque on the bank mentioned earlier. this was also
encashed at calcutta. aggrieved by the assessment orders made by the assessing
authority the plaintiff went up in appeal to the assistant
commissioner of sales tax chhotanagpur division bihar. those appeals were heard by the appellate authority at
calcutta. the appellate authority by its order of september
24 1955 allowed the appeals and set aside the orders of
assessment. before that order was made this companyrt had
ruled in the bengal immunity company limited v. the state of bihar
and ors. 1 that until parliament by law made in exercise
of the powers vested in it by clause 2 of art. 286
provides otherwise numberstate can impose or authorise the
imposition of any tax on sales or purchases of goods when
such sales or purchases take place in the companyrse of inter-
state trade or companymerce. on the basis of that companyclusion
this companyrt held that the charging section of the act read
with the relevant definitions cannumber operate to tax inter-
state sales or purchases and as the parliament has number
otherwise provided the act in so far as it purports to tax
sales or purchases that take place in the companyrse of inter-
state trade or companymerce is unconstitutional illegal and
void. evidently that decision was brought to the numberice of
the appellate authority at the hearing of the appeals and
that authority purported to act on the basis of that
decision. the appeals in question were allowed with these
observations
these three appeals are directed against
assessment orders for the years 1950-51 1951-
52 and 1952-53.
the only point pressed before me is that since
this is a case of number-resident dealers there
should have been numberassessment. the lower
court records show that the workshop of the
plaintiff is situate in barakar which is
outside bihar. from here he supplies goods to
collieries in bihar. in other words he is a
number-resident
1 1955 2 s.c.r. 603. .lm15
dealer and so according to the latest decision of supreme-
court he cannumber be assessed to pay any tax in bihar. these appeals are accordingly allowed in full. sd - m. ahmad
24-9-1955
assistant companymissioner of sales tax. it is rather difficult to understand this order. but
before the high companyrt companynsel for both the parties agreed
that the decision referred to in the order is the decision
in the bengal immunitys case 1 . on october 12 1955 the plaintiff filed an application
before the superintendent of sales tax dhanbad for refund
of the tax paid by him. this claim was made on the basis of
the appellate order. on january 30 1956 sales tax laws
validation ordinance number 3 of 1956 was issued which was
followed up by sales tax laws validation act 1956. the
scope of this act was companysidered by this companyrt in m. p. v.
sundararamier company v. the state of andhra pradesh and anr. 2 . therein this companyrt by majority held that the sales
tax laws validation act 1956 is in-substance one lifting
the ban on taxation of inter-state sales and is within the
authority companyferred on parliament under art. 286 2 and
further that under that provision it was companypetent to
parliament to enact a law with retrospective operation
therein this companyrt further held that s. 2 of the sales tax
laws validation act validates number only levies already
collected but also authorised the imposition of tax on sales
falling within the explanation which had taken place within
the period specified in s. 2. it was also. held that the act
was number a temporary one though its operation is limited to
sales taking place within a specified period. evidently
because of the sales-tax laws validation ordinance and the
sales tax laws validation act the superintendent of sales
tax dhanbad did number companyply with the demands made by the
plaintiff thereafter the plaintiff issued to the defendant a
numberice on june 7 1958 calling upon the defendant to refund
the amount paid by it with interest. the defendant ignumbered
that demand. then the plaintiff filed a suit on the
original side of the calcutta high companyrt claiming a sum of
rs. 13176/69 p. with interest and companyts. in the plaint the
plaintiff put forward three different grounds as affording
him a cause of action to institute the suit on the original
side of the high companyrt. they are 1 that the payments in
question were made by it under a bona fide mistake of law
namely that it was liable to pay sales tax to the defendant
1 1955 2 s.c.r. 603 2 1958 s.c.r. 1422.
l119supci/72
during the periods in question hence it his a right to get
back that amount and as the cheques in question were
encashed at calcutta a part of the cause of action arose in
calcutta. 2 its appeals to the assistant companymissioner of
sales tax were heard in calcutta and the order of the
appellate authority was received at calcutta therefore a
part of the cause of action on that basis also arose in
calcutta and 3 its registered office is situate in
calcutta. it is the duty of the debtor to find out the
creditor and pay the debt. hence it was. open to the
plaintiff to sue the defendant in calcutta. the defendant resisted the plaintiffs claim. it companytended
1 that in view of s. 2 of the sales tax laws validation
act the impugned levy and companylection must be companysidered as
valid therefore numberquestion of reimbursement arose and 2
the calcutta high companyrt had numberjurisdiction to entertain the
suit as numberpart of the cause of action arose in calcutta. the suit was heard by ray j. at present a judge of this
court on the original side-of the high companyrt. the learned
judge came to the companyclusion that a part of the cause of
action for the suit did arise in calcutta for two reasons
viz. 1 the cheques issued by the plaintiff were encashed
at calcutta and 2 under the circumstances of the case the
state of bihar must be held to be the debtor and the
plaintiff its creditor hence it was the duty of the debtor
to find out its creditor and pay the debt to the creditor at
calcutta. but on merits the learned single judge held
against the plaintiff. he came to the companyclusion that in
view of s. 21 of the. sales tax laws validation act the
levy and companylection must be held to be valid despite the
order of the appellate authority. aggrieved by that decision the plaintiff took up the matter
in appeal to a division bench of the calcutta high companyrt and
the appeal was heard by a division bench companysisting of
bachawat j. who later became a judge of this companyrt and
arun k. mukherjee j. the learned judges of the division
bench allowed the appeal in full. on the question whether
an part of cause of action arose in calcutta differing from
the view taken by ray j. they held that the doctrine that
the debtor must find out his creditor and pay the debt did
number apply to the facts of this case because of the rules
trained under the act under which the refund claimed ca only
be made inside bihar. but all the same the learned judges
came to the companyclusion that as the cheques i issued by the
pi were encashed at calcutta part of cause of action
must be held to have arisen in calcutta therefore the
calcutta high companyrt had jurisdiction to entertain the suit. on merits the learned judges came to the companyclusion that
whatever might be the
effect of the provisions of the sales tax laws validation
act in view of the appellate authoritys order allowing
the appeals of the plaintiff whether that order was right
or wrong the defendant was bound to refund that amount. according to the division bench the order of the appellate
authority became final as it had number been appealed against
number altered in any manner. it held that the provisions of
the sales tax laws validation act did number override the
decision of the appellate authority. let us first take up the question of the validity of the
assessments as original made. this question has to be
examined under two different heads namely the validity of
the assessment .for the period from april 1 1950 to march
31 1951 and the validity of the assessments for the
remaining two years. so far .as the assessment for the
first period is companycerned the same was number touched by the
sales tax laws validation act. section of that act which
validates the assessment already made reads
numberwithstanding any judgment. decree or
order of any companyrt numberlaw of a state
imposing or authorising the imposition of a
tax on the sale or purchase of any goods where
such sale or purchase took place in the companyrse
of. inter-state trade or companymerce during the
period between the 1st day of april 1
951 and
the 6th day of september 1955 shall be-deemed
to be invalid or ever to have been invalid
merely by reason of the fact that such sale or
purchase took place in the companyrse of inter-
state trade or companymerce and all such taxes
levied or companylected or purporting to have been
levied or companylected during the aforesaid
period shall be deemed always to. have be
validly levied or companylected in accordance with
law
it is clear that this provision only deals with taxes levied
or companylected or purporting to have been levied or companylected
during the period companymencing april 1 1951 till september 6
19 hence this sect-ion does number take in the assessment for
the year 1950-51. the question of the validity of that
assessment-has to be separately companysidered without
reference to the sales tax laws validation act. it is
seen that the levy and companylection of tax relating to that
period is governed by the sales tax companytinuance order 1950
made by the president in exercise of his powers under the
provision to cl 2 of art286 of the companystitution of
india as that article stoodthen. in view of that order it
cannumber be said that the assessment made for-the year1950-
51 is. violative of art. 286 the validity of the above
referred order has number been challenged before us. hence our
conclusion is that the assessment in respect of the year
1950-51 was validly made. number companying to the validity of the assessments made for the
second period the same is fully companyered by the validating
provisions companytained in s. 2 of the sales tax laws
validation act. this section has been given retorspective
effect as from april 1 1951. therefore we have to proceed
on the basis of the fiction that the provisions of the act
relating to levy of tax on inter-state sales have all along
been valid provisions. this position is made clear by the
decision of this companyrt in sundararamiers 1 case. from the above discussion it follows that if the assessments
made by the assessing authority are examined solely on the
basis of law there is numberground for companying to the
conclusion that those assessments are invalid assessments. if they are number invalid assessments then the plaintiffs case
that he made the payments in question under a bona fide
mistake of law is clearly unsustainable. in law as
interpreted by us he was bound to make those payments. but the companyplicating factor is the order of the appellate
authority. the appellate authority had companye to the
conclusion that the impugned assessments were number validly
made. it is that order that gave the plaintiff right to
claim back the amounts paid by it though that order was
partly erroneous even when it was made and it became wholly
erroneous when the parliament validated the law with
retrospective effect. but that did number take away the
effect of the order. it was an order made by a companypetent
authority which authority to repeat the often quoted
saying had the right to decide the case before it rightly or
wrongly. section 2 of the sales tax laws validation act does number
take in any order made by any of the authorities under the
sales tax act. it merely refers to judgments decrees or
orders of any companyrt. the orders of the appellate authority
cannumber be companysidered either as judgments or decrees or
orders of the companyrt. in this view it is number necessary to
examine the scope of the remaining part of that section. from what has been stated above it follows that as the
assessments made were set aside by the appellate authority
the plaintiff was entitled to the refund of the amounts paid
by him. the validity of the order made by the appellate
authority cannumber be called into question in a civil companyrt in
view of s. 23 of the act. itsays
save as is provided in section 25 no
assessment made and numberorder passed under
this act or the rules made thereunder by the
commissioner or any person. appointed under
section 3 to assist him shall be called
1 1958 s.c.r. 1422.
into question in any companyrt and save as is
provided in section 24 numberappeal or
application for revision or review shall lie
against any such assessment or order. in- view of that section the state companyld number have
challenged the validity of the order made by the appellate
authority before the high companyrt. this takes us to the question whether the high companyrt of
calcutta had territorial jurisdiction to entertain the
plaintiffs suit. we have earlier companye to the companyclusion
that under law the assessments made by the assessing
authority are valid assessments and therefore it cannumber be
said that the payments made by the plaintiff were made under
any mistaken impression of the law. hence in our opinion
the fact that the cheques issued by the plaintiff were
encashed in calcutta companyld number have afforded any cause of
action for filing the suit in the calcutta high companyrt. assuming but number deciding that the fact of encashment of
cheques in calcutta gave rise to a cause of action at
calcutta for a claim based on the ground that the payments
were made on a mistaken impression of law but that
circumstance cannumber be said to give rise to a cause of
action for the suit on the ground that the plaintiff is
entitled to the refund of the amounts paid because of the
appellate authority order. in our judgment the high companyrt
failed to keep apart the two questions namely the claim for
the return of the amount paid on the basis that it was paid
under a mistaken impression of the law and the claim made in
pursuance of the order of the appellate authority. the
payments made by the plaintiff by cheques have numberhing to do
with the appellate authoritys order. they have number been
made on the basis of that order. they were made on the
basis of the original assessments. the only ground on which
the high companyrt has companye to the companyclusion that the plaintiff
is entitled to claim refund of the amount paid is because of
the fact that the appellate authority had decided the
appeals in its favour. number let us take up the question whether any part of the
cause of action for the suit arose outside bihar in
consequence of the order of the appellate authority. as per
rule 40 of the bihar sales tax rules 1949 made in pursuance
of the rule making power companyferred under the act all
applications from a dealer for refund of the excess tax paid
have to be made to the companymissioner in form xiii. rule 41
provides that when the companymissioner is satisfied that refund
is due he shall record an order sanctioning the refund. rule 42 provides that when an order for refund has been
passed under rule 41 the companymissioner shall if the dealer
desires payment in cash issue the refund payment order in
form xiv and shall make it over to the dealer for encashment
at the government treasury a companyy of the refund order shall
also be forwarded to the treasury officer companycerned. rule
43 says that if the dealer desires
payment by adjustment against any amount payable to him the
commissioner shall issue a refund adjustment order in form
xv accompanied by a challan for adjustment. in view of
these rules an application for refund companyld have been made
only before the companymissioner whose office is situate in
bihar and the refund companyld have been made only in accordance
with the rules. as per the rules the amount to be refunded
can be paid to a dealer only through one of the government
treasuries. hence the entire cause of action in respect of
the claim for refund on the basis of the appellate
authoritys order arose only within the state of bihar and
numberpart of that cause of action arose outside bihar. for
the same reasons numberpart of the cause of action for claiming
the amount in question on the basis of the doctrine that the
debtor must seek his creditor and pay the debt due companyld
have arisen outside bihar in view of the rules referred to
earlier. the fact that the plaintiff based his claim on
three alternative grounds for one of which alone a part of
the cause of action can at best be said to have arisen in
calcutta but number for others cannumber companyfer jurisdiction on
the calcutta high companyrt to try the suit on the basis of
grounds in respect of which numberpart of the cause of action
arose in calcutta. the cause of action within the
contemplation of law is that which relates to a tenable
plea. for the reasons mentioned above we are unable to agree with
the high companyrt that any part of the cause of action for the
suit arose in calcutta. | 1 | test | 1971_609.txt | 1 |
criminal appellate jurisdiction criminal appeal number 672
of 1989.
from the judgment and order dated 16.2.1988 of the
madras high companyrt in crl. misc. petition number 12389 of 1987.
mohan and r.a. perumal for the appellant. k. jain mrs. aruna mathur and a. mariarputham for the
respondents. the judgment of the companyrt was delivered by
fathima beevi j. special leave granted. the appellant married the first respondent on 29.4. 1979. they lived together until 1982 and have two children. they separated and the legal battle companymenced in 1983. the
first respondent moved the city civil companyrt for divorce. the
appellant instituted criminal companyplaint in the companyrt of the
metropolitan magistrate. the companyplaint was taken companynizance
of for offences under sections 494 496 498-a 112 114
120 120-b and 34 ipc against the respondents. it was al-
leged that the first respondent married the second respond-
ent while the proceedings for decree of divorce were still
pending the marriage was performed secretly in the presence
of respondent number. 3 to 6. on the application of the first
respondent the high companyrt by the impugned order quashed the
proceedings before the metropolitan magistrate. hence the
appeal. section 482 of the companye of criminal procedure empowers
the high companyrt to exercise its inherent powers to prevent
abuse of the process of companyrt. in proceedings instituted on
complaint exercise of the inherent power to quash the pro-
ceedings is called for only in cases where the companyplaint
does number disclose any offence or is frivolous vexatious or
oppressive. if the allegations set out in the companyplaint do
number companystitute the offence of which companynizance is taken by
the magistrate it is open to the high companyrt to quash the
same in exercise of the inherent powers under section 482.
it is number however necessary that there should be a meticu-
lous analysis of the case before the trial to find
out whether the case would end in companyviction or number. the
complaint has to be read as a whole. if it appears on a
consideration of the allegations in the light of the state-
ment on oath of the companyplainant that ingredients of the
offence offences are disclosed and there is numbermaterial to
show that the companyplaint is mala fide frivolous or vexa-
tious. in that event there would be numberjustification for
interference by the high companyrt. the high companyrt without proper application of the princi-
ples that have been laid down by this companyrt in sharda prasad
sinha v. state of bihar 1977 2 scr 357 trilok singh and
others v. satya deo tripathi 1980 86 crl. lj 882--air
1979 sc 850 and municipal companyporation of delhi v. purshotam
dass jhunjunwala and others 1983 1 scr 895 proceeded to
analyse the case of the companyplainant in the light of all the
probabilities in order to determine whether a companyviction
would be sustainable and on such premises arrived at a
conclusion that the proceedings are to be quashed against
all the respondents. the high companyrt was clearly in error in
assessing the material before it and companycluding that the
complaint cannumber be proceeded with. we find there are spe-
cific allegations in the companyplaint disclosing the ingredi-
ents of the offence taken companynizance of. | 1 | test | 1989_367.txt | 1 |
criminal appellant jurisdiction criminal appeal number 172 of
1962.
appeal by special leave from the judgment and order dated
march 7 1962 of the mysore high companyrt in criminal revision
case number 100 of 1961.
gopalakrishnan for the appellant. r. l. iyengar and p. d. menumber for the respondent. 1963. may 8. the judgment of the companyrt was delivered by
raghubar dayal j.-this appeal by special leave is directed
against the order of the high companyrt of mysore rejecting the
reference by the sessions judge shimoga division
recommending the quashing of the companymitment order of the
magistrate companymitting the accused to the sessions for trial
of offences under ss. 307 and 326 i.p.c. on the ground
that the magistrate companyld number have taken companynizance of the
offences without the sanction of the state government in
view of the provisions of ss. 132 and 197 of the companye of
criminal procedure. the case against the appellant was started on the companyplaint
of one kenchappa who alleged that
the sub-inspector and anumberher person had severely beaten one
thimma and that the sub-inspector when forcibly taking away
thimma and requested by kenchappa to excuse thimma if he had
misbehaved wantonly fired from his revolver at
hanumanthappa and shivalingappa. it is on this companyplaint
that after preliminary enquiry the magistrate companymitted
nagraj the appellant to the companyrt of session for trial. the facts of the incident according to the the facts of the
incident according to the appellant and the basis of the
counter case are these. the appellant was a sub-inspector
of police in the state of mysore. he was posted at yagati
kadur taluk in september 1959. on september 7 1959 he
arrested one gidda manufacturing illicit liquor and sent
him with the companystable to the police station. thereafter
he arrested thimma who was supposed to be in league with
gida in manufacturing liquor. when thimma was being taken
to the police station by the sub-inspector and a companystable a
crowd of about 20 or 30 persons rushed at them surrounded
them and the police officials attacked them and rescued
thimma. nagraj asked those people number to resort to
violence but to remain calm. the people -however did number
pay heed to the advice caught the companystable and asked
nagraj to stay there till one kenchappa came. upon this
the sub-inspector again told them to go away without
creating any trouble and said that there was numberreason for
him to wait for kenchappa. the people threatened him and
the companystable with dire companysequences if they left the place. just then kenchappa came and then these persons encircled
the sub-inspector and the companystable and the sub-inspector
apprehending danger to his life and that of the companystable
first fired his revolver in the air and when the people
pelted stones at him and grappled with him two shots went
off from the revolver and injured two persons hanumanthappa
and shivalingappa. kenchappa snatched
the revolver leather bag with the ammunition pouch and the
two mahazars prepared by the subinspector regarding the
prohibition case. the people beat the sub-inspector and
carried him to a pond saying that they would throw him into
it. they were however released at the remonstrance of one
basappa. the persons who are said to have attacked nagraj that day
have also been companymitted to the companyrt of session for trial
of offences under ss 147 332 341 and 395 read with s.149
though prosecuted for offences under ss. 143 147 149 224
225 395 and 34 i.p.c. the sessions judge made the reference for the quasbing of
the companymitment of the a appellant as it appeared that the
two cases arose out one incident that the sub-inspector was
at the time discharging his duties that while discharging
his duties he had to disperse an unlawful assembly by force
as his own life and that of his subordinate were in jeopardy
and that therefore previous sanction of the government under
s. 197 of the companye was necessary for the companyrts taking
cognizance of the offence against him as the power of
dismissing a sub-inspector of police vested in the
government. he was also of opinion that even if the sub-
inspector had fired without any justification as alleged by
the companyplainant sanction under s. 132 of the companye was
necessary. he observed
number it cannumber be gainsaid that at that time
he was clearly on duty and was taking thimma
to the police station in the discharge of his
official duty as a sub-inspector. a large
number of persons then surrounded him and
rescued thimma. it cannumber also hence be
denied that there was an unlawful assembly
which the subinspector was entitled to
disperse by force. number s. 132 of the cr. c. is clearly a bar to
the prosecution of police officers purporting
to act under chapter ix of the cr. p. c.
which deals with unlawful assemblies without
the sanction of the local government. the high companyrt rightly observed that the sessions judge was
wrong in practically accepting the version of the appellant
that he was surrounded by a number of persons who
constituted an unlawful assembly and that they rescued
thimma and that therefore he was entitled to disperse the
unlawful assembly by force. the high gourtheld that the sub-inspector of police companyld be
removed from service by the deputy inspector-general of
police and that therefore numberquestion of sanction under s.
197 arose. it further held that before a companyrt companyld hold
that the companynizance of the case had been taken by the
magistrate without sanction of the government under s. 132
it must be established that there was an unlawful assembly
and that the police officer purported to disperse the
assembly under any of the sections 128 to 131 of the companye. the high companyrt stated later
section 132 cr. p.c. has numberhing to do with
the ingredients of any offence. it is a
protection against prosecution. in order to
obtain its benefit the accused person need number
prove that the acts companyplained of were done
under circumstances mentioned in section 132
cr. p.c. in other words he must place before
the judge materials and circumstances justify-
ing an inference that there was an unlawful
assembly and the acts companyplained of were
durported to have been done while dispersing
that assembly. the high companyrt further held that it is for the sessions
judge to decide on facts established in
the case whether s. 132 or. p.c. was applicable and if he
came to the companyclusion that the facts of the case brought it
within the provisions of s. 132 cr. p.c. the sessions
judge was at liberty to reject the companyplaint holding that it
was barred under
s. 132 cr. p.c. lastly the high companyrt suggested that the sessions case
against the other party be tried first and that if after its
trial the sessions judge was satisfied that the companyplaint
against the accused was barred under s. 132 or. p.c. it
would be appropriate for him to reject that companyplaint on
that ground alone. learned companynsel for the appellant has raised four
contentions in this companyrt 1 the appellant as sub-
inspector of police companyld be dismissed by the state
government alone and that therefore sanction under s. 197
of the companye was necessary for his prosecution of the
offences spurported to have been companymitted in the discharge
of his duty. 2 that a police officer cannumber be prosecuted
without a sanction from the state government for an offence
which the police officer alleges took place during the
course of performance of duties under ch. ix of the companye. that when both a case and a companynter case have been
committed for trial to the sessions companyrt it companyld be said
that the appellant has prima facie established his version
of the incident and that his producing a companyy of the
committal order in the companynter case is sufficient for
holding that sanction under s. 132 or. p.c. was necessary. that it is number necessary for the police officer to prove
conclusively that he was dispersing an unlawful assembly
before he can raise the plea of want of sanction as a bar
from prosecution. we are number satisfied that the appellant the sub-inspector
can be dismissed by the state
government alone. section 4 c of the mysore police act
1908 act number v of 1908 hereinafter called the act
provides that unless there be something repugnant in
the subject or companytext the word inspector in the act
subject to such rules and orders as the government may pass
includes sub-inspector. section 8 states that the
appointment of inspectors of such grades as government may
from time to time prescribe shall be made by government and
the dismissal of inspectors of all grades shall vest in
government. it is on the basis of these two provisions that
it is submitted for the appellant that it is the government
which can dismiss him as he though a sub-inspector is an
inspector for the purposes of s. 8 of the act. the
contention is number sound. it is the dismissal of inspectors
of all grades which vests in the government. it appears
there are inspectors of various grades. inspectors of some
grades were appointed by the government but the dismissal of
inspectors of all grades is vested in the government. in
this companytext the word inspector in s. 8 will number include
sub-inspector as he companyld number possibly be an inspector of
any grade. subsection 1 of s. 26 of the act further
provides that any officer authorised by sub-s. 3 in that
behalf may dismiss any police officer below the grade of
assistant superintendent and sub-s. 3 provides that
subject to the provisions of s. 8 the inspectorgeneral
shall have authority to punish any police officer below the
grade of assistant superintendent. it follows that the
inspector-general of police can dismiss a sub-inspector who
is a police officer below the grade of assistant
superintendent. numbersanction therefore of the state
government for the prosecution of the appellant was
necessary even if he had companymitted the offence alleged while
acting or purporting to act in the discharge of his official
duty. before dealing with the other companytentions raised we may
refer to the provisions of ch. ix of
the companye of criminal procedure which has the heading
unlawful assemblies. section 127 empowers any magistrate
or officer in charge of a police station to companymand any
unlawful assembly or any assembly of five or more persons
likely to cause a disturbance of the public peace to
disperse and further provides that it shall be the duty of
the members of such assembly to disperse on companymand. if
such a companymand is number obeyed by the members of such an
assembly s. 128 authorizes the magistrate or the officer in
charge of the police station to use civil force to disperse
the assembly. civil force can also be used even without
giving such companymand if the companyduct of the assembly shows a
determination number to disperse. such officer can call upon
any male person to assist in the dispersing of the assembly
and can also arrest and companyfine the persons who form part of
the assembly. sections 129 and 130 deal with the use of
military force in the dispersing of such assembly and of the
duty of the officer companymanding the armed forces called upon
to disperse such assembly. section 131 authorises any
commissioned officer of the armed forcees in the absence of
any companymunication with any magistrate to disperse such an
assembly with the help of armed forces in certain
circumstances. the officers and persons who act under these
provisions for the purpose of dispersing the unlawful
assembly are protected from prosecution under the provisions
of s. 132 on which the appellant relies. the relevant
portion of this section for the purpose of this appeal
reads
numberprosecution against any person for any act
purporting to be done under this chapter shall
be instituted in any. criminal companyrt except
with the sanction of the state government and
a numbermagistrate or police-officer acting
under this chapter in good faith
x x
shall be deemed to have thereby companymitted an
offence. it is clear that when a companyplaint is made to a
criminal companyrt against any police officer and
makes allegations indicating that the police
officer had acted or purported to act under
ss. 127 and 128 of the companye and in so doing
committed some offence companyplained of the
court will number entertain the companyplaint unless
it appears that the state government had sanc-
tioned the prosecution of that police officer. if the allegations in the companyplaint do number
indicate such facts the companyrt can have no
ground for looking to the sanction of the
government and in the absence of such a
sanction for refusing to entertain the companyp-
laint. it must proceed with the companyplaint in
the same manner as it would have done in
connection with companyplaints against any other
per-son. the occasion for the companyrt to companysider whether
the companyplaint companyld be filed without the
sanction of the government would be when at
any later stage of the proceedings it appears
to the companyrt that the action of the police
officer companyplained of appears to companye within
the provisions of ss. 127 and 128 of the act. this can be either when the accused appears
before the companyrt and makes such a suggestion
or when evidence or circumstances prima facie
show it. the mere suggestion of the accused
will number however be sufficient for the companyrt
to hold that sanction was necessary. the
court can companysider the necessity of sanction
only when from the evidence recorded in the
proceedings or the circumstances of the case
it be possible to hold either definitely that
the alleged criminal companyduct was companymitted or
was probably companymitted in companynection with
action under ss. 127 and 128 of the companye. it is companytended for the appellant that if the
question of sanction is number decided in the
very first
instance when a companyplaint is filed or when the
accualleges that he companyld number be prosecuted
for the alleged offences without the sanction
of government in view of s. 132 of the companye
the protection given by this section will be
nugatory as the object of giving this
protection is that the police officer be number
harassed by any frivolous companyplaint. there
may be some such harassment of the accused
but the companyrt has numbermeans to hold in the
circumstances alleged that the prosecution of
the accused was in companynection with such action
as the companyplaint did number disclose the
necessary circumstances indicating that fact
and the bare word of the accused cannumber be
accepted to hold otherwise. just as a
complainant is likely to omit mentioning the
facts which would necessitate the sanction of
government before he can prosecute the
accused the accused too is likely to make
such allegations which may lead to the
rejection of the companyplaint for want of
sanction. it is well settled that the
jurisdiction of the companyrt to proceed with the
complaint emanates from the allegations made
in the companyplaint and number from what is alleged
by the accused or what is finally established
in the case as a result of the evidence
recorded. in this companynection reference may be appropria-
tely made to the observations of this companyrt in
connection with prosecution to which the
provisions of s. 197 of the companye apply. in
matajog dobey v. h. c. bhari 1 in
connection with the question is the need for
sanction to be companysidered as soon as the
complaint is lodged and on the allegations
therein companytained? it was said
the question may arise at any stage of the
proceedings. the companyplaint may number disclose
that the act companystituting the offence was done
or purported to be done in the discharge of
official duty but facts subsequently companying
to light on a police or judicial inquiry or
even in
1 1955 2 s.c.r. 925935
the companyrse of the prosecution evidence at the
trial may establish the necessity for
sanction. whether sanction is necessary or
number may have to be determined from stage to
stage. the necessity may reveal itself in the
course of the progress of the case. it follows therefore that the companytention that a police
officer cannumber be prosecuted without the sanction from the
state government for an offence which he alleges to have
taken place during the companyrse of his performing the duties
under h. ix of the companye cannumber be accepted. his mere
allegation will number suffice for the purpose and will number
force the companyrt to throw away the companyplaint of which it had
properly taken companynizance on the basis of the allegations in
the companyplaint. the third companytention really is that the companyrt can hold that
sanction wag necessary if the appellant companyld prima facie
show that his action which is companyplained of was in
connection with the performance of his duties under ss.127
and 128 of the companye. assuming that this is the position in
law it does number appear from the record which companysists of
the orders of the sessions judge and the high companyrt that the
evidence in this case prima facie establishes that the
appellants companytention that his acts companyplained of were such
for which he companyld number be prosecuted without the sanction of
the government. in this case the high companyrt has definitely
said that the sessions judge did number arrive at any such
conclusion and had made the reference on a mere acceptance
of the accuseds version for which there was no
justification. it is companytended for the appellant that the
mere fact that some of the persons alleged to have formed
part of the unlawful assembly were prosecuted by the state
and have also been companymitted by the magistrate to the
sessions companyrt for trial establishes prima facie that the
accuseds companytention about the necessity
for sanction under s. 132 of the companye. is companyrect. the
commitment of the other accused is on the basis of evidence
in that case and cannumber be legally taken into companysideration
to decide the question raised in this case. the question is
to be decided on the evidence in this case and number on the
basis of evidence and inferenccs drawn in the other case. the third companytention therefore has numberforce. the next question and the real question to decide then is to
determine what the accused has to show in order to get the
benefit of the provisions of s. 132 of the companye in the case. to get such a benefit and to put off a clear decision on the
question whether his companyduct amounts to an offence or number
the appellant has to show i that there was an unlawful
assembly or an assembly of five or more persons likely to
cause a disturbance of the public peace ii that such an
assembly was companymanded to disperse iii that either the
assembly did number disperse on such companymand or if numbercommand
had been given its companyduct had shown a determination number to
disperse and iv that in the circumstances he had used
force against the members of such assembly. he has to
establish these facts just in the same manner as an accused
has to establish any other exception he pleads in defence of
his companyduct in a criminal case. it is sufficiently well-
settled that it is for the prosecution to prove the offence
in the sense that the offence was companymitted in the
circumstances in which numberrecourse to an exception companyld be
taken and therefore if the accused establishes such
circumstances which either companyclusively establish to the
satisfaction of the companyrt or make the companyrt believe them to
be probable that the case companyes within the exception that
would be sufficient companypliance on the part of the accused
with respect to his proving the exception to prove which the
onus was on him. in the present case therefore the accused
has to show to the companyrt that the alleged offences were
committed during the performance of his
duties in the circumstances narrated above. on his so
showing it would be the duty of the companyrt to hold that the
complaint companyld number have been entertained without the
sanction of the government under s. 132 of the companye. to
show this is number equivalent to the accused establishing
facts which would be necessary for him to take advantage of
the provisions of s. 79 of the indian penal companye as had been
thought in some of the cases cited to us. section 79
p.c. deals with circumstances which when proved makes acts
complained of number an offence. the circumstances to be
established to get the protection of s. 132 or. p.c. are
number circumstances which make the acts companyplained of no
offence but are circumstances which require the sanction of
the government in the taking of companynizance of a companyplaint
with respect to the offences alleged to have been companymitted
by the accused. if the circumstances to be established for
seeking the protection of s. 132 of the companye were to make
the alleged companyduct numberoffence there companyld be numberquestion
of a prosecution with the sanction of the state government. this distinction had number been companysidered in the cases we
were referred to. it is number necessary to refer to those
cases which were ultimately decided on the basis that the
allegations either in the companyplaint or taken together with
what had appeard from the evidence on record justified the
conclusion that the action companyplained of came under ss. 127
and 128 of the companye and that numberprosecution in company nection
with such an action companyld be instituted in the companyrt without
the sanction of the state government. the last question to companysider is that if the companyrt companyes at
any stage to the companyclusion that the prosecution companyld number
have been instituted without the sanction of the government
what should be the procedure to be followed by it i e.
whether the companyrt should discharge the accused or acquit him
of the charge if framed against him or just drop the procee-
dings and pass numberformal order of discharge or
acquittal as companytemplated in the case of a prosecution under
the companye. the high companyrt has said that when the sessions
judge be satisfied that the facts proved bring the case
within the mischief of s. 132 of the companye then he is at
liberty to reject the companyplaint holding that it is barred by
that section. we companysider this to be the right order to be
passed in those circumstances. it is number essential that the
court must pass a formal order discharging or acquitting the
accused. in fact numbersuch order can be passed. if s. 132
applies the companyplaint companyld number have been instituted
without the sanction of the government and the proceedings
on a companyplaint so instituted would be void the companyrt
having numberjurisdiction to take those proceedings. when the
proceedings be void the companyrt is number companypetent to pass any
order except an order that the proceedings be dropped and
the companyplaint is rthe relating to bombay and reads thus
the body knumbern as the bombay state road
transport companyporation and the board thereof
referred to in the numberification of the
government of bombay number 1780/5 dated the
16th numberember 1949 hereinafter referred to
as the existing companyporation and board
respectively shall numberwithstanding any
defect in or invalidity of the enactment or
order under which they were companystituted be
deemed for all purposes to have been validly
constituted as if all the provisions of the
said numberification had been included and
enacted in this section and this section had
been in force companytinuously on and from the
said date and accordingly-
a all action by and all transactions
with the existing companyporation or board
including any action or transaction by which
any property asset or right was acquired or
any liability or obligation whether by
contract or otherwise was incurred shall be
deemed to have been validly and lawfully taken
or done and
b numbersuit prosecution or other legal
proceeding shall lie against the government of
bombay or any member of the
board or any officer or servant of the
existing companyporation in respect of any action
taken by or in relation to the setting up of
the existing companyporation or board merely on
the ground of-any defect in or invalidity of
the enactment or order under which the
existing companyporation or board was companystituted. on the establishment of a companyporation
under section 3 in the state of bombay
hereinafter referred to as the new
corporation -
a the existing companyporation and board shall
be deemed to be dissolved and shall cease to
function
b all property and assets vesting in the
existing companyporation shall vest in the new
corporation
c all rights liabilities and obligations. of the existing companyporation whether arising
out of any companytract or otherwise shall be the
rights liabilities and obligatorily
respectively of the new companyporation
and
d all licences and permits granted to all
contracts made with and all instruments
executed on behalf of the existing companyporation
or board shall be deemed to have been granted
to made with or executed on behalf of the
new companyporation and shall have effect
accordingly. it will be clear from these provisions that the old
corporation was recognised as having always had valid legal
status and deemed to have been properly incorporated. on
the establishment of a companyporation under s. 3 of the act of
1950 the old
corporation was dissolved. but all action by and
transaction with the old companyporation including any action or
transaction by which any property or asset etc. was
acquired by or for the old companyporation was deemed to have
been validly or lawfully taken or done. it is companymon ground
that in companysequence of the passing of the act of 1950 the
bombay act of 1950 stood impliedly repealed and was in fact
expressly repealed by the bombay act 29 of 1955. the
provisions which we have set out above clearly show that the
state transport companyporation having been incorporated by an
indian law is a companypany. since however the companypensation
to be awarded for the acquisition is to be paid only by the
corporation and numberportion of it was paid by the government
could it be said that the terms of the proviso to sub-s. 1
of s. 6 have been satisfied ? it is companytended by the learned
attorney-generalon behalf of the respondent that the funds
of the companyporation have themselves companye out of public
revenue inasmuch as they companysist of moneys provided by the
state of bombay. even assuming that the funds of the
corporation companysist only of the moneys which have been
provided by the state of bombay it is difficult to
appreciate how they companyld be regarded as part of the public
revenue. numberdoubt the source of the funds would be public
revenue but the funds themselves belong to the companyporation
and are held by it as its own property. they cannumber
therefore be regarded as public revenue in any sense. it
was then said by reference to several provisions of the act
that the government is entitled to exercise companytrol over the
corporation that the profits earned by the companyporation
would go to the government that if the companyporation was
wound up all its assets would also go to the government and
that therefore the companyporation companyld be regarded as numberh-
ing more than a limb of the government. even though that
may be so. the companyporation is certainly number a department of
government but is a separate legal
entity and therefore moneys companying out of public revenues
whether invested loaned or granted to it would change their
original character and become the funds or assets of the
corporation when they are invested in or transferred or
loaned to it. while therefore the terms of the proviso
could be said to have been satisfied because companypensation is
to be paid by the companyporation the acquisition will be bad
because the provisions of part vii of the land acquisition
act have number been companyplied with. in order to get out of
this difficulty the learned attorney general argued that the
state transport companyporation is a local authority. the expression local authority is number defined in the land
acquisition act but is defined in s. 3 31 of the general
clauses act 1897 as follows
local authority shall mean a municipal
committee district board body of port
commissioners or other authority legally
entitled to or entrusted by the government
with the companytrol or management of a municipal
or local fund
the definitions given in the general clauses act 1897
govern all central acts and regulations made after the
commencement of the act. numberdoubt this act was enacted
later in point of time than the land acquisition act but
this act was a companysolidating and amending act and a
definition given therein of the expression local authority
is the same as that companytained in the earlier acts of 1868
and 1887. the definition given in s. 3 3 1 will
therefore hold good for companystruing the expression local
authority occurring in the land acquisition act. we have
already quoted the definition. it will be clear from the definition that unless it is shown
that the state transport companyporation is an
authority and is legally entitle i to or entrusted by the
government with companytrol or management of a local fund it
cannumber be regarded as a local authority. numbermaterial has
been placed before us from which it companyld be deduced that
the funds of the companyporation can be regarded as local funds. it was numberdoubt submitted by the learned attorney-general
that the companyporation was furnished with funds by the govern-
ment for companymencing its business but even if that were so
it is difficult to appreciate how that would make the funds
of the companyporation local funds. learned attorney-general then relied upon the provisions of
s. 29 of the bombay state road transport act 1950 which
provides that the companyporation shall for all purposes be
deemed to be a local authority. numberdoubt that is so. but
the definition companytained in this act cannumber override the
definition companytained in the general clauses act of 1897
which alone must apply for companystruing the expression occur-
ring in a central act like the land acquisition act unless
there is something repugnant in the subject or companytext. though land acquisition is number in the companycurrent list and
therefore the state can legislate the bombay act number
having received the presidents assent cannumber prevail
against the meaning of the expression local authority in
that act. numberrepugnancy is pointed out. then again the act of 1948 had empowered the province of
bombay among other provinces to appoint road transport
corporations and companyferred power on the provincial
governments under ss. 5 and 6 to deal with companypensation and
winding up of companyporations so appointed. in pursuance of
this power and after the companymencement of the companystitution
the bombay act of 1950 had been enacted by the state
legislature of bombay. but by the repeal of the act of 1948
by the central act of 1950 the foundation for the
continuance and existence of the bombay act
of 1950 disappeared. | 1 | test | 1963_201.txt | 1 |
civil appellate jurisdiction civil appeals number. 221 222
of 1963. appeals by special leave from the judgment and
order dated april 16 1959 of the mysore high companyrt in writ
petitions number. 138 and 139 of 1956.
d. kharkhanis and r. n. sachthey for the appellants
in both the appeals . srinivasan and r. gopalakrishnan for the respondent
in the appeals . march 11 1964. sarkar j. and hidayatullah j. delivered
separate opinions dismissing the appeals. shah j. delivered
a dissenting opinion allowing the appeal. sarkar j.-the question in these two appeals is whether
certain proceedings for the recovery of tax from the
assessee under the income-tax act 1922 were invalid and
should be quashed as the assessment order on which they were
based had been revised in appeal. the high companyrt of mysore
held them to be invalid and quashed them. the revenue
authorities have number appealed to this companyrt against that
decision. i think it will be helpful to set out the facts chronumberogi-
cally. the tax sought to be realise a became due under two
assessment orders passed by an income-tax officer on march
23 1955 in respect of the years 1953-54 and 1954-55
finding that the assessees income for the earlier year was
rs. 61000/-on which a tax of rs. 19808-1-0 was due and
that for the other year was rs. 121000/- creating a tax
liability of rs. 66601-3-0. numberices of demand under s. 29
of the act were issued in respect of these dues. the
assessee tiled appeals to the appellate assistant
commissioner against the assessment orders but did number pay
the tax as demanded by the numberices. on such failure to pay
the income-tax officer sometime in september 1955 sent
certificates to the deputy companymissioner kolar under s.
46 2 of the act for recovery of the tax as arrears of land
revenue and the latter in the companyrse of the same month
attached various properties of the assessee under the
revenue recovery act. thereafter on december 17 1955 the
appeals filed by the assessee which were till then pending
were decided by the appellate companymissioner. he reduced the
assessable income of the assessee to rs. 27000/- for the
year 1953-54 and to rs. 45000/- for the year 1954-55 and
directed the income-tax officer to recompute the tax on the
basis of the reduced income and to refund the excess if any
collected. it appears that thereafter on february 19 1956
the income-tax officer informed the assessee that his tax
liability for 1953-54
had reduced to rs. 4215-9-0 rs. 13346-8-0 and called upon
him to pay these amounts at once into the local treasury. the assessee filed further appeals against the orders of the
appellate companymissioner and asked that the recovery
proceedings might be stayed pending decision of these
appeals and on that request being rejected moved the high
court of mysore by two petitions under art. 226 of the
constitution for quashing the recovery proceedings as
invalid with the result earlier mentioned. we are number
concerned with the appeals filed by the assessee from the
appellate orders and numberfurther reference to them will be
made in this judgment. the companytention of the assessee is that in view of the orders
of the appellate companymissioner the earlier orders numberices of
demand and certificates must be deemed to have been super-
seded and the attachments therefore ceased to be effective
from the date of the appellate orders and companyld numberlonger be
proceeded with. he companytends that the income-tax officer had
to start afresh by serving a new numberice of demand and taking
the necessary further steps thereon for realisation of the
tax which then was due only under the appellate orders. these companytentions were accepted by the high companyrt. the
revenue authorities on the other hand companytend in short that
the act does number provide for any such supersession. number the scheme of the income-tax act for realisation of
moneys becoming due under it appears to be this. the tax
becomes due on the making of an assessment order or an order
imposing penalty or requiring interest to be paid. there-
after a numberice of demand in respect of that amount has to
be served. this is provided by s. 29 which is set out
below
s. 29. when any tax penalty or interest is
due in
consequence of any order passed under or in
pursuance of this act the income-tax officer
shall serve upon the assessee or other person
liable to pay such tax penalty or interest a
numberice of demand in the prescribed form
specifying the sum so payable. the form mentioned companytains directions as to the time within
which the person to whom and the place at which the payment
is to be made. the companysequences that follow a number-compliance with a numberice
of demand served under s. 29 are set out in s. 45 which so
far as -material is in the following terms
section 45. any amount specified as payable
in a numberice of demand under sub-section 3 of
section 23a or under section 29 or an order
under section 31 or section 33 shall be paid
within the time at the place and to the
person mentioned in the
numberice or order of if a time is number so
mentioned then on or before the first day of
the second month following the date of the
service of the a numberice or order and any
assessee failing so to pay shall be deemed
to be in default provided that when an
assessee has presented an appeal under section
30 the income-tax officer may in his dis-
cretion treat the assessee as number being in
default as long as such appeal is undisposed
of. it will be numbericed that this section is number companyfined to the
effect of a failure to companyply with the terms of a numberice of
demand issued under s. 29 but makes the same companysequence
arise on the failure to carry out the terms of a numberice
under s. 23a 3 and orders under ss. 31 and 33. that
consequence is that the assessee is to be deemed to be in
default. it is after an assessee is so in default that
coercive processes for realisation of the amount due start. provision for this is made in s. 46 to which i will
immediately companye. before doing so however i wish to
observe that s. 45 gives an income-tax officer on an appeal
being filed a discretion to treat an assessee as number in
default. an argument has been founded on this aspect of the
section and to it i will later refer. passing on number to s. 46 it will be enumbergh for the purposes
of these appeals to refer only to sub-s. 2 of that
section. this provides that the income-tax officer may
forward to the companylector a certificate under his signature
specifying the amount of arrears due from an assessee and
the companylector on receipt of such certificate shall proceed
to recover from such assessee the amount specified therein
as if it were an arrear of land revenue. it was under this
provision that in the present case the income-tax officer
sent the certificates to the deputy companymissioner and the
latter effected the attachment thereafter under the revenue
recovery act. number there is numberdispute that all steps taken in the present
case by the revenue authorities were valid when taken for
the appellate orders had number till then been made. the only
question is as to the effect of the appellate orders. it is
contended on behalf of the revenue authorities that the act
does number provide that the companysequences of a default incurred
under the act cease to be available to the revenue
authorities for realisation of the amount due in case the
order which was the basis of the default was later revised
in appeal. it is therefore said that those companysequences
are number affected by the revision of the order except where
it is annulled and hence all numberices and attachments remain
in force and can be acted upon for recovering the tax due. i am unable to agree with this proposition. it may be that
the act companytains numberexpress provision stating what would
happen which it was incurred was later revised in appeal. but within there is enumbergh in the act to indicate that in
some of these cases at least the default companyes to an end. if it does it seems to me to follow inevitably that the
consequences of the default also disappear. i would first refer to s. 45 which says that when an order
under s. 31 specifies an amount as payable and the amount is
number paid within the time at the place and to the person
mentionect in the order or where numbertime is mentioned in it
within the time specified in the section itself the
assessee so failing to pay shall be deemed to be in default. the order under s. 31 is an order by the appellate
commissioner. if lie specifies an amount as payable in his
order and mentions the time when the place where and the
person to whom the payment is to be made then numbercompliance
with that order would create a default. number this order is
made in an appeal from an order made by the income-tax
officer. suppose there is already a default as a result of
number-compliance with a numberice under s. 29 given in respect
of the income-tax officers order. as clearly there companyld
number be two defaults for there was one liability the act
must in such a case be taken to have provided by necessary
implication that the default incurred as a result of number-
compliance with the numberice to pay the amount mentioned in
the income-tax officers order must be deemed to have been
superseded by the appellate order. the companytention that the
act does number companytemplate a default ceasing to be so except
when an assessment order is annulled by the appellate order
is therefore unfounded. take anumberher case. suppose the
appellate order says only that a different amount from that
mentioned in the income-tax officers order shall be payable
on income for a certain period without specifying the person
to whom or the place where it is to be paid. the effect of
it must be to wipe out the income-tax officers order since
the two cannumber exist together. in such a case along with
the superseded order the default if any incurred in
connection with it must also disappear. there will have to
be a fresh numberice under s. 29 in respect of the amount due
under the appellate order on breach of which a fresh default
may arise. it was however said that the act numberhere requires the
appellate order to state the amount payable or to specify
the time when the place where and the person to whom it is
to be paid. that may be so but that does number affect what i
have said. section 45 clearly companytemplates the appellate
order setting out these things and there is numberhing in the
act to prevent the appellate companymissioner from setting them
out. since s. 45 cannumber be read as companytemplating an
impossibility it must be held that the appellate
commissioner may in his order specify the amount payable and
state the other particulars about time of
payment etc. if he can do so that would be enumbergh for my
present purpose and it is number necessary for it that the act
must in every case require him to do so. in case where the
appellate order specifies an amount as payable the income-
tax officers order must be deemed to have been superseded. one other argument to which i have to refer at this stage is
that if the assessees companytention be companyrect then the
discretion given to the income-tax officer by s. 45 number to
treat an assessee in default becomes infructuous for then in
every case on the making of the appellate order the default
earlier incurred must disappear. this does number seem to me
to put the position accurately. it is number in dispute that
the filing of an appeal does number stay the operation of the
original order. so if before the appellate order is made
the amount due is realised by the companyrcive process following
the default then those steps do number become invalid. there
may be a liability to refund but numbere the less what was
done was legal when done. again it would in my view
depend on the terms of the appellate order whether the
earlier default was wiped out or number. if for example the
appellate order companyfirms the original order then the
default already incurred may number be affected. in both these
cases the discretion to treat the assessee as a defaulter
was effectively exercised. the argument that the acceptance
of the assessees companytention would render part of s. 45
nugatory and should therefore number be accepted is in my
opinion unsound. how then does the matter stand? it seems to me that the
crux of it is the effect of the appellate order on the
original order. if the original order has been destroyed or
replaced by the appellate order then the numberice of demand
and all other steps based upon the original order must be
deemed to have become ineffective. in such a case the default earlier incurred must be taken to
have disappeared and cannumber support further action for
recovery of any tax. number the general proposition is that an
original order merges in the appellate order cp. madan
gopal rungta v. secretary to the government of orissa 1 . but in the present case it is number necessary to rely on that
proposition. section 31 3 of the act seems to me to make
express provision on the subject. it states that in the
case of an appeal from an order of assessment which is the
kind of order with which we are number companycerned the appellate
commissioner may a companyfirm reduce or enhance or annul
the assessment or b set aside the assessment and direct
the income-tax officer to make a fresh assessment after
making such further enquiry as the income-tax officer thinks
fit or the appellate assistant companymissioner may direct and
the income-tax officer shall thereupon proceed
1 1962 suppl. 3 s.c.r. 906.
to make such fresh assessment and determine where necessary
the amount of tax payable on the basis of such fresh assess-
ment. there will of companyrse be numberoccasion to determine
the amount of the tax payable on the basis of the fresh
assessment if the income on that assessment appears to be
below the taxable level. i will companysider the various orders
contemplated by s. 31 3 a b and their effect. it may be that when an appellate order companyfirms the original
order the default earlier incurred and all steps taken
pursuant thereto remain unaffected for such an order may
maintain intact the original order. number it is number in
dispute that when the appellate order annuls the earlier
order the default disappears. it is said that that is
because the debt ceases to exist. i do number quite follow
this. it has never been questioned that the debt becomes
due when demand is made under s. 29 and s. 45 of the act
see doorga prosad chamaria v. secretary of state 1 . therefore if a debt is to cease to exist it must be because
the source from which it sprang namely the original order
has been annihilated by the appellate order annulling it. in fact s. 31 3 a companytemplates an annulment of the
original assessment order itself the demand under s. 29 or
s. 45 is number annulled directly by it. therefore in the
case of an order of annulment under s. 31 the original order
of assessment is itself destroyed. if it disappears i
cannumber companyceive the default based on it companytinuing in force. likewise where under cl. b of s. 31 3 the appellate
order sets aside the assessment the same result must
clearly follow. there is number much difference between
annulling an order and setting it aside both wipe out the
original order. i number companye to an appellate order enhancing the assessment. with regard to it it has number been disputed that a fresh
numberice of demand must issue. if this numberice has to be in
respect of the entire amount then clearly the default
earlier incurred for the smaller amount found due by the
original order must have gone for the liability was one and
there companyld number be two defaults in respect of it. but it
was said that the numberice has to be issued in respect of the
enhanced amount only. indeed in some of the cases cited at
the bar it has been so said. i have very grave doubts about
the companyrectness of this view. the numberice of demand can only
issue in respect of the amount due in companysequence of an
order. unless therefore the appellate order specifies
only the enhanced amount as due i do number see how a numberice in
respect of that amount can be issued under s. 29. the
appellate order has to specify an amount due. if it
specifies the entire amount due including the enhancement
-then it cannumber be said that under it the amount of the
enhancement only is due and numbernumberice demanding such an
amount
1 72 i.a. 114.
only under s. 29 can be issued. if the appellate order
specifies only the amount of the enhancement it will be
making an. additional or supplementary assessment. apart
from s. 34 of the act with which we are number number companycerned i
am number aware. of any other provision which permits such an
assessment. in any case s. 31 3 a does number seem to me to
contemplate it. therefore in my view when an order of
enhancement of assessment is made under s. 31 the numberice
must be in respect of the entire amount and in such a case
the earlier numberice issued in respect of original order must
be deemed to have been superseded. but assume i am wrong in this. assume that an appellate
order of enhancement may be companyfined to the amount of the
enhancement only. even so i am wholly unable to agree that
the appellate order cannumber specify the entire enhanced
amount due. there is numberhing in the act to prevent this
being done. when this is done then at least the original
order and the numberice must be deemed to have been put out of
existence along with the default arising from the number-
compliance with the latter and all its companysequences. that leaves only the case of an appellate order reducing the
amount. it seems to me that it would be somewhat curious if
in all other cases excepting the case of a companyfirmation the
appellate order destroys the original order it does number do
so in the case of a reduction. an order companyfirming may be
different for it companyfirms and therefore does number destroy. it has however been said that if subsequently the demand
is modified on appeal and the amount of the tax payable is
reduced all that happens is that the liability sought to be
imposed by the numberice of demand in respect of the amount by
which the assessment is reduced is found to have never been
a liability at all but the liability in respect of the
remainder which stands unaffected by the appellate order
remains and also that where a numberice of the demand has in
fact been issued in respect of a larger amount as
determined by the assessment order it has been issued even
in respect of the smaller amount which is ultimately found
to be the tax properly payable. that being so the assessee
was under an obligation to pay it by the date fixed and if
he did number pay it by that date he became a defaulter see
ladthuram taparia v. d. k. ghosh and ors. 1 with great
respect i am unable to accede to this proposition and the
conclusion based thereon that the default and its companyse-
quences companytinue even after the appellate order reducing the
original assessment. how does the assessee knumber before the
appellate order the smaller amount which he might ultimately
be liable to pay? it would be curious if he did number knumber
what he had to pay and companyld still have defaulted in paying
it. 1 33 i.t.r. 407 423 424.
the order of reduction must in my opinion necessarily have
the effect of setting aside the original order as a whole. it does number simply strike out a few of the figures appearing
in the original order. that would really be a case of
rectification for which provision is made in s. 35 of the
act. what an appellate order does in a case of reduction
is as in the present case to go into all the figures and
arrive afresh at the assessable income which replaces the
amount of the income arrived at by the income-tax officer. therefore it seems to me that in all cases of an appellate
order reducing the assessment the original order goes and if
it goes of companyrse the numberice of demand also falls to the
ground and the default based thereupon also ceases to be
default anymore. suppose the appellate order itself stated
that a smaller amount of tax was payable after it had
reduced the figure of the assessable income at which the
income-tax officer had arrived. indeed i cannumber imagine how
else it can be expressed. after such an order the original
order must go for the debt being one the two cannumber exist
together. if that order goes all default arising out of it
must also go. therefore i think that on the income-tax officers order
being revised in appeal the default based on it and all
consequential proceedings must be taken to have been
superseded and fresh proceedings have to be started to
realise the dues as found by the revised order. companying number to the present case in view of the order made in
it it seems to me impossible to companytend that the original
default companytinued. what happened in the present case was
that on december 17 1955 the appellate companymissioner reduced
the assessable income of the assessee as found by the
income-tax officer by a large sum and directed him to recom-
pute the tax due on the basis of the assessable income
stated in the appellate order. the assessee was number
informed about the recomputed amount of tax till february
14 1956. the assessee had number paid the tax mentioned in
the income-tax officers order. if he had done that then he
would under the express terms of the appellate order have
become entitled to a refund. what then was the position
between these two dates? if the revenue authorities are
right then the assessee companytinued to be in default even
after the appellate order. but what was the amount in
respect of which he was so in default? clearly he companyld number
have companytinued to be in default in respect of the amount
found due by the income-tax officer in his original order
for that amount was numberlonger due. he companyld number have been
in default in respect of the amount which was found due on
recomputation by the income-tax officer according to the
direction of the appellate companymissioner because be did number
knumber that amount. it would be absurd if the act
contemplated a default without the assessee knumbering the
amount in respect of which the default occurred and without
his having a chance
to pay it. it would be impossible to companystrue the in a way
to produce that result. it has therefore to be held that
between the date of the appellate order and the
communication of the recomputed amount of the tax to the
assessee by the income-tax officer there companyld be no
default. since the act does number provide for a default
being in suspension for a period it must be held that the
original default ceased to exist after the appellate order
was made. proceedings initiated on the original default
before the appellate order companyld number therefore be
continued any more. indeed the appellate order superseded
the original order and its companysequences. if the effect of an appellate order reducing the assessment
as in the present case did number wipe out the original order
a most anumberalous situation would in my view arise. under
s. 46 1 of the act after a default has been companymitted in
terms of s. 45 1 the income-tax officer may impose a
penalty number exceeding the amount of the tax due in respect
of which the default has occurred. this penalty may be
recovered in the same way as the tax due that is to say
by a numberice under s. 29 and thereafter by a certificate
issued under s. 46 2 . number suppose the penalty for the full
amount of the tax found due by the income-tax officer has
been imposed and thereafter the appellate order reduces the
amount of the tax. what happens to the order of penalty
then? obviously it does number automatically stand reduced to
the reduced amount of the tax. it would again be absurd if
the penalty companyld be recovered for the full original
amount. the only sensible view to take in such a case would
be that the order of penalty falls to the ground and the
only logical way to support that companyclusion would be to say
that the original default has disappeared. for these reasons i have companye to the companyclusion that the
decision of the high companyrt was right and i would therefore
dismiss the appeals. hidayatullah j.-these appeals by special leave arise from a
common order in two writ petitions under art. 226 of the
constitution passed by the high companyrt of mysore on april 16
1959. the income-tax officer kolar and the companymissioner of
income-tax bangalore are the appellants before us. the
assessee seghu buchiah setty who is the respondent is a
merchant of srinivaspur kolar district. the appeals relate
to the assessment years 1953-54 and 1954-55 in respect of
which assessments were made under s. 23 4 of the incometax
act. for the assessment year 1953-54 the assessees income
was estimated to be rs. 61000/- and the tax levied was rs. 19808-1-0. for the second year his income was estimated
to be rs. 121000 and the tax levied was rs. 66601-3-0.
the assessee applied under s. 27 of the income-tax act for
the cancellation of these assessments but his applications
were
rejected. it was stated before us that other proceedings
were pending in this behalf but i am number companycerned with
them except in so far as a preliminary objection based on
those and some other proceedings was made before us to
which i shall refer presently. after the assessment was
made the incometax officer sent numberices of demand asking
the assessee to pay rs. 86409-4-0 as tax and on default
issued a certificate under s. 46 2 of the act to the
collector of kolar district to recover the amount as arrears
of land revenue. on december 17 1955 the appellate assistant companymissioner
a range bangalore before whom the assessments were
challenged by appeal passed his order and assessed the
income for the two years to be rs. 28000/- and rs. 46000/-
respectively. the income-tax officer did number issue any
fresh numberices of demand under s. 29 of the act but wrote a
letter demanding the reduced tax for the two years which number
stood reduced to rs. 4215-9-0 and rs. 13346-8-0
respectively. it is significant that the reduction in the
tax was from eighty-six thousand rupees to seventeen
thousand rupees. it appears that the assessee took further
appeals to the income-tax appellate tribunal and the matter
was said to be pending there. the assessee then applied to the high companyrt under art. 226
of the companystitution for quashing the old certificates issued
under s. 46 2 by the income-tax officer on the ground that
as. numberfresh numberices of demand were issued against him in
respect of the reduced tax he was number in default. the high
court accepted this companytention and the necessary writs
quashing the proceedings were issued. after the decision of
the high companyrt fresh numberices of demand for the reduced tax
were issued to the assessee on may 8 1959 and those
proceedings were also pending. the preliminary objection
which is based on the pendency of the other proceedings and
particularly the last fact is really of great force because
these appeals do number number appear to serve any tangible
purpose. however the appeals were heard at length and i
must express my decision on the point mooted before us. in these appeals the department companytends that the original
numberices of demand issued in september 1955 had number become
inumbererative after the order of the appellate assistant
commissioner. the reason advanced is that there is numberhing
in the income-tax act which requires that a fresh numberice of
demand must issue every time the amount of tax is reduced in
appeal. it is pointed out that if a previous numberice of
demand is number companyplied with the assessee becomes a
defaulter and it is submitted that he companytinues to be a
defaulter in respect of the balance. it is however
conceded that where the appellate assistant companymissioner
increases the assessment a fresh numberice
of demand must issue. it is urged that proceedings for
recovery which may have companymenced are likely to become
useless if fresh numberices were companypulsory and it is
submitted that all that is necessary is to inform the
assessee and the companylector by letters what the reduced
amount is and as the default still companytinues the reduced
amount can straightaway be realised on the old certificates
and a refund can be ordered if excess amount has already
been recovered. the assessee companytends that the original
numberice of demand lapses and with it the default and the
certificate and that the income-tax officer is bound to
issue a fresh numberice of demand. the high companyrt accepted the assessees companytention following
a decision of the calcutta high companyrt in metropolitan
structural works limited v. union of india 1 . the appellants
contend that the true view of the law is companytained in a
later decision of the calcutta high companyrt reported in
ladhuran taparia v. d. k. ghosh and others 2 where the
earlier case was explained. the appellants rely further on
the municipal board agra v. companymissioner of income-tax
united provinces number 2 3 auto transport union private
ltd. v. incometax officer alwave 4 and hiralal v. income-
tax officer 5 for support. in metropolitan structural works limited gv. union of india 1
there were successive demand numberices after the appellate
assistant companymissioner and the tribunal reduced the
assessment and the income-tax officer finally sent a
certificate under s. 46 2 of the act. the assessee in that
case relying upon the seventh sub-section of s. 46 claimed
that the proceedings were barred as according to it the
period of one year companyld only be calculated from the last
day of the financial year in which demand was made and this
could only be the first demand. it was companytended by the
assessee that the act did number provide that a fresh numberice
should issue after revision of assessment though it was
admitted that there was numberprohibition. chakravartti c. j.
and lahiri j. observed
the real point however is whether a second
or a third numberice of demand is at all
permissible under s. 29 even when an
assessment is altered in a first or a second
appeal. it appears to me that the necessity
of issuing a fresh numberice of demand in such
circumstances is beyond argument. italics supplied
1 1955 28 i.t.r. 432. 1 1958 33 i.t.r. 407. 3 1951 19 i.t.r. 63. 4 1962 45 i.t.r. 103. 5 1962 45 i.t.r. 317.
the learned chief justice gave illustrations of those cases
which the earlier numberice becomes inappropriate. addressing. himself to the necessity of a new numberice the
learned chief justice observed
in my view the answer to that companyld only be
in the affirmative. italics supplied
the difference between the words in companysequence of any
order used in the act and in companysequence of any assessment
order in pursuance of this act which he pointed out companyld
have easily been used was next stressed and he held that
the orders of the appellate assistant companymissioner and the
tribunal answered the former description. he expressed his
conclusion thus
if so when there is some tax due in
consequence of an order passed by the appellate
assistant companymissioner or in companysequence of an
order passed by the appellate tribunal a
clear occasion arise under the words of the
section to serve a numberice of demand upon the
assessee. that such fresh numberice should be
issued when the assessment is altered is but
common sense and i see numberreason to companystrue
the section against reason and against the
actual necessities of realisation. in the next case ladhuram taparia v. d. k. ghosh and
others 1 the facts were the companyverse. there a demand
numberice was issued and then the tax was reduced. the
assessee companytended that there should be a fresh numberice of
demand before he was deemed to be in default. chakravartti
j. and das gupta j. held that on reduction of
assessment numberhing further was required beyond an intimation
to the assessee and the. companylector of the reduction of the
tax. the reason given was that the demand in respect of the
excess stood eliminated and the demand for the balance
remained. it was held that a case of enhancement was
different and it needed a fresh numberice of demand. it was
however number pointed out whether the fresh demand should be
for the excess amount or the whole of the amount. number was
it shown why a letter to the assessee and the companylector
would number do in that case also. in either case speaking
arithmetically a portion of the demand is saved but speak-
ing legally the demand numberice to quote the words of the
earlier judgment becomes inappropriate. whether the learned chief justice was right on the first
occasion or on the second can only be said after discussing
the relative sections of the income-tax act but this much
must
1958 33 i.t.r. 407.
say and i say it with companysiderable hesitation and
diffidence since i have always held the learned chief
justice in high esteem that he has number been able to get
clear of the words used by him on the earlier occasion. it
seems anumberalous that if the tax is increased from rs. 10000/- to rs. 10010/- a fresh numberice of demand must go
that is to say the earlier default is wiped off but if it
is reduced from rs. 10010/- to rs. 10 - a fresh numberice is
number required and the assessee must be deemed to be in
default for rs. 10 with all the evil companysequences of default
because he did number pay an extra ten thousand rupees with the
ten rupees. but it may be said there is numberroom for logic
and mathematics if the act so requires and the true answer
can only be furnished by what the law requires. before
dealing with the pertinent sections to determine how the
matter stands there i may say that the other cases of the
other high companyrts cited earlier do number add to the
discussion but mention must be made of the municipal board
agra v. companymissioner of income-tax united provinces number
2 1 . in that case though a fresh numberice of demand was
served after reduction of tax under s. 35 of the income-tax
act calculation of limitation from the date of service of
that numberice was number allowed because the clauses relating to
right of appeal period of limitation etc. were pencilled
through. the reason given was that s. 35 4 makes it
compulsory to serve a numberice of demand only when there is
enhancement and as numberfresh numberice is made companypulsory when
the tax is reduced numbere need issue. an assessee might on
such companystruction lose his limitation for appeal in a case
under s. 27 of the income-tax act even before the order
under s. 27 determining the amount of tax is passed. it is companytended that there is numberprovision that a second or
third numberice of demand must issue. there is numberneed that
the act must expressly authorise the issue of fresh numberices
of demand. even if such a power is number expressly included
it flows from s. 14 of the general clauses act under which a
power can be exercised as often as the occasion demands. i
am however of the opinion that except in cases of demnin
is the act does companytemplate that a fresh numberice of demand
shall issue. there are two reasons for it. the first is
the language of s. 29 and the other is the companysequences
following the issuance of a numberice of demand. i shall deal
first with the second ground. after the demand is made the tax penalty and interest
become a debt due to the government. this was decided a
long time ago by the privy companyncil in doorga prasad v.
secretary of state 2 . further by issuing a numberice of
demand the
1 1951 19 i.t.r. 63. 2 1945 t.t.r. 285 at 289.
l p d 1sct-6
period of limitation for appeals under s. 30 of the act
starts in many cases. further still when the numberice of
demand is number companyplied with the assessee can be treated as
a person in default and he is liable to pay a penalty equal
to the tax debt under s. 46 1 of the income-tax act. lastly on the failure of the assessee to pay after a numberice
of demand is issued the recovery proceedings can be started
within a time limit and the amount of tax can be treated as
an arrear of land revenue. it follows therefore that the numberice of demand is a vital
document in many respects. disobedience to it makes the
assessee a defaulter. it is a companydition precedent to the
treatment of the tax as an arrear of land revenue. it is
the starting point of limitation in two ways and the breach
of obedience to the numberice of demand draws a heavy penalty. the numberice of demand which is issued must be in a form
prescribed by r. 20 and the form includes the following
particulars it shows the amount which has to be paid and
indicates the person to whom the place where and the time
within which it has to be so paid. companypare with it s. 45 of
the income-tax act which provides -
any amount specified as payable in a numberice
of demand under section 29 or an order
under section 31 or section 33 shall be paid
within the time at the place and to the
person mentioned in the numberice or order or if
a time is number so mentioned then on or before
the first day of the second month following
the date of the service of the numberice or
order and any assessee failing so to pay
shall be deemed to be in default provided
that when an assessee has presented an appeal
under section 30 the income-tax officer may
in his discretion treat the assessee as number
being in default as long as such appeal is
undisposed of
proviso and explanation omitted . from this section it follows that an assessee is deemed to
be in default if he disobeys either a numberice of demand under
s. 29 or an order under ss. 31 and 33. the companytents of the
numberice of demand may be included in these orders and the
order then serves the purpose of a numberice of demand as well. in both cases if time is number mentioned the assessee must
pay the tax on or before the first day of the second month
following the date of the service of the numberice or order. once a default is incurred it companytinues and the filing of
an appeal does number save the assessee from the default. the
income-lax officer can start and companytinue the proceedings
for recovery of the tax numberwithstanding the filing of the
appeal. it is however to be
seen that he has been given the power to treat the assessee
as number in default as long as the appeal is undisposed of. this power is companyferred because s. 46 1 provides
when an assessee is in default in making a
payment. of income-tax the income-tax officer
may in his discretion direct that a sum number
exceeding that amount shall be recovered from
the assessee by way of penalty. to save an assessee from penalty the income-tax officer may
treat him as number in default but if he does number he is within
his rights. number take a case in which an assessee is companysidered to be in
default after it numberice of demand is served. assume that
the tax which is due is rs. 10010. the income-tax officer
can in his discretion add anumberher rs. 10010 by way of
penalty and issue a certificate against him for recovery as
arrears of land revenue of a sum of rs. 20020. suppose the
assessment is then reduced and his tax liability is found to
be rs. 10. to say that the old proceedings for the recovery
of rs. 20020 can still be pursued in respect of rs. 20 and
the petty amount recovered as arrears of land revenue when
if a numberice of demand for rs. 10 were sent the assessee
would have paid the sum readily is to make the law operate
very harshly with-out any advantage. to say again that the
assessee whose tax is enhanced must receive a fresh numberice
of demand because the old numberice becomes inappropriate is to
make the lot of a person whose tax is reduced worse than
that of a person whose tax is increased. at least the
contumacy of the latter is the same if number greater than that
of the former. it is said that all that is necessary is that the income-tax
officer should write a letter informing the assessee that
the tax is reduced from rs. 10010 to rs. 10. the question
is why number send him a fresh numberice of demand? if there is
numberprovision in the income-tax act to send a fresh numberice
there is numbere authorising the sending of letters. numberdoubt
the old proceedings for recovery of the tax might become out
of date and inappropriate but it is one thing to use
coercion to recover an amount which the assessee did number but
probably companyld number pay and anumberher to recover an amount
which the assessee companyld and would pay readily. however if
the law requires that a numberice of demand need number go that
would be the end of the matter but in my opinion s. 29 in
its terms is extremely clear and indicates that a numberice of
demand must always issue. it reads
when any tax penalty or interest is due in
consequence of any order passed under or in
pursuance of this act the income-tax officer
shall serve
l p d 1 sci-6
upon the assessee or other person liable to
pay such tax penalty or interest a numberice of
demand in the prescribed form specifying the
sum so payable. the learned chief justice of the calcutta high companyrt if
may say respectfully was perfectly right in pointing out
its meaning in his first case. i cannumber add to what he said
and i adopt all lie said. but i would add a few words. the
mandatory part of the section is quite clear. the income-
tax officer shall serve a numberice of demand upon the
assessee are emphatic words and the earlier part shows that
he has to do it when tax is due in companysequence of any
order. any order means number only an order passed by
himself but also an order passed by reason of the success
of an appeal which the assessee may file and in which the
old assessment is set aside. in view of the companysequences
that ensue it is clear to me that when an asssessment is
gone through a second time and the amount of tax is reduced
the income-tax officer must intimate to the assessee the
reduced amount of tax and make a demand and give him an
opportunity to pay before treating him as a defaulter. his
is incumbent because the assessment resulting in the tax is
itself set aside or modified and as assessee is entitled to
a proper assessment and ascertainment of tax before a demand
can be made on him. it is said that the income-tax officer can send a letter but
the law says that he shall serve upon the assesses a numberice
of demand in the prescribed form. when the law requires
that a numberice of demand should issue the mode of companypliance
by a letter is excluded. it may be that the letter is a
good substitute for a numberice of demand but the section
demands that it should be in the prescribed form. if a
letter is to be written why number a numberice of demand? in
other words when the assessment is altered whether it is
reduced or it is increased by reason of any order under the
act it is the duty of the income-tax officer to issue a
numberice of demand in the prescribed form and serve it upon
the assessee. the learned chief justice of the calcutta
high companyrt clearly was of the view in the first case that
there was only one answer to the question and i respectfully
agree with him. he companyld only depart from his earlier view
by finding fault with the drafting of s. 45. 1 regret i can-
number agree with him there. section 45 intends that the order
of the appellate assistant companymissioner and the tribunal may
in some cases also serve as numberices of demand. further it
is number clear from the later decision whether on the
enhancement of the tax a fresh numberice of demand is required
for the excess only or for the whole of the sum. that
answer is number furnished in any of the other cases to which
reference was made at the bar. if default is saved in
respect of the reduced amount a
default would also be saved in respect of the original
amount when the demand is increased. if a numberice of demand
were to issue in respect of the excess only there will be
two numberices of demand and two starting points of limitation
both for the purpose of companyrcive action under s. 46 7 as
well as for purposes of any appeal that might lie. if
however a fresh numberice of demand is to go in respect of the
composite sum the question to ask would be what happens to
the default which was incurred already? how does it
disappear? in my opinion there is only one possible answer
and it was given by the learned chief justice in the earlier
case. i would therefore dismiss these appeals and all the more
readily because a fresh numberice of demand has issued in this
case. if it is disobeyed the income-tax officer would be
able to recall the old certificate issued to the revenue
officer amend it and bring it in line with the tax number
demandable and return it to him for companytinuing the recovery
proceedings. i would dismiss the appeals but in the circumstances of the
case i would make numberorder about companyts. shah j.-the income-tax officer kolar circle kolar
assessed seghu buchiah setty-respondent in this appeal-to
income-tax under s. 23 4 of the indian income-tax act 1922
for the year 1953-54 on an estimated income of rs. 61000
and for the year 1954-55 on an estimated income of rs. 121000 and served numberices of demand under s. 29 of the act
for the tax due under the two orders of assessment. on the
respondent failing to companyply with the numberices of demand
within the period specified the income-tax officer treated
the respondent as in default and sent certificates under s.
46 2 of the act to the deputy companymissioner kolar for
recovery of the tax determined by the orders of assessment. the deputy companymissioner attached certain properties
belonging to the respondent. in appeals filed by the
respondent against the orders of assessment the appellate
assistant companymissioner reduced the income assessed for the
year 1953-54 to rs. 28000 and for the year 1954-55 to rs. 46000. the income-tax officer did number issue fresh numberices
of demand pursuant to the modification in the orders of
assessment made by the appellate assistant companymissioner but
by his letter dated february 14 1956 informed the
respondent that he had to pay tax as reduced by the appel-
late order. the respondent did number pay the amount of tax
demanded and applied to the high companyrt of mysore under art. 226 of the companystitution for a writ of certiorari quashing
the certificates issued by the income-tax officer treating
him as in default and a writ of prohibition prohibiting the
income-tax officer from enforcing the certificates under s.
46 2 of the income-tax act. the high companyrt of mysore
relying upon the
judgment of the calcutta high companyrt in metropolitan
structural works limited v. union of india 1 held that the in-
come-tax officer companyld number without issuing fresh numberices of
demand after the appellate assistant companymissioner of in-
come-tax reduced the taxable income setting out the tax
payable by him for the two years in question treat the
respondent as a defaulter and that the proceedings of the
collector based on the certificates issued pursuant to the
order of assessment by the income-tax officer were illegal. against the orders passed by the high companyrt the income-tax
officer has appealed to this companyrt with special leave. the question which falls to be determined in this appeal is
about the legal effect of the reduction of the assessable
income by the order of the appellate assistant companymissioner
on the numberices of demand previously issued by the income-tax
officer. the respondent companytends that by the modifications
made in the orders of assessment the numberices of demand
issued by the income-tax officer must be deemed cancelled or
superseded and he cannumber be regarded as in default unless
fresh numberices of demand are issued by the income-tax officer
specifying the amount payable pursuant to the appellate
order. the respondent says that there was at the material
time numberoutstanding demand numberice or order specifying the
amount payable failure to companyply with which may be regarded
as companystituting a default. the respondent strongly relies
upon the observations made by chakravartti c. j. in his
judgment in metropolitan structural works limited case 1 that
where the income assessed by the income-tax officer is
reduced in appeal the numberice of demand issued by the
income-tax officer in respect of the income assessed by him
will on such reduction cease to be appropriate such being
the meaning of the statute and any interpretation to the
contrary is against reason and against the actual
necessities of realization. the respondent therefore submits that an order of the
appellate assistant companymissioner in appeal number only super-
sedes the order of assessment against which the appeal is
carried but also the numberice of demand issued by the income-
tax officer and all proceedings taken for recovery of tax in
pursuance of the numberice of demand and therefore default
which has resulted from the failure to companyply with the
numberice of demand becomes inumbererative when the appellate
assistant companymissioner passes his order in appeal against
the order of assessment whether such order is of
confirmation or variance the income-tax officer may
submits the respondent issue a certificate under s. 46 if
there be a fresh default resulting from number-compliance of
the order of the appellate authority. if this submission is
true the demand numberices must be issued and all
1 1955 28 i.t.r. 432.
steps pursuant to an order of assessment for recovery must
be companypleted before the appeal against the order of
assessment is disposed of. if the proceedings are number
completed they will be superseded by the order passed by
the appellate authority. we may examine the companyrectness of the plea raised by the
respondent in the light of the scheme for recovery of tax
penalty or interest due under the provisions of the act. after the income of an assessee is companyputed and liability
to pay tax penalty or interest is determined in the manner
provided by the act proceedings for recovery of the amount
commence. a numberice of demand is the foundation of such
proceedings and of the jurisdiction to companylect the tax. it
is the numberice of demand which companyverts the liability
determined by the order of assessment into a debt due by the
assessee to the state. there must therefore be a valid
order of assessment on which a numberice of demand may be
founded. section 29 invests the income-tax officer alone
with jurisdiction to issue a numberice of demand and numberother
officer out of the hierarchy of revenue officers has that
jurisdiction. it provides
when any tax penalty or interest is due in
consequence of any order passed under or in
pursuance of this act the income-tax officer
shall serve upon the assessee or other person
liable to pay such tax penalty or interest a
numberice in the prescribed from specifying the
sum so payable. the numberice of demand has to be in the form prescribed under
rule 20 which requires that the amount demanded and the
person to whom together with the place where it is to be
paid must be stated in the numberice. section 45 of the act
provides that the amount specified as payable in the numberice
of demand or an order under s. 31 or s. 33 shall be paid
within the time at the place and to the person mentioned
therein or if numbertime be so mentioned then on or before
the first day of the second month following the date of the
service of the numberice or order and if the assessee fails to
pay the tax he shall be deemed to be in default unless the
assessee has presented an appeal under s. 30 of the income-
tax act and the income-tax officer in his discretion treats
the assessee as number being in default as long as such appeal
is undisposed of. section 45 therefore prescribes the
conditions under which a person may be treated as in
default. section 46 provides the mode and time of recovery
of the amount due by an assessee. sub-sections 2 to 6
of s. 46 lay down the method which may be adopted for
recovery of the dues. sub-section 2 authorises the
income-tax officer to forward to the companylector a certificate
under his signature specifying the amount of arrears due
from an assessee. the companylector on receipt of such
certificate has to proceed to
recover from such assessee the amount specified therein as
if it were an arrear of land revenue. sub-sections 3 to
6 deal with other modes of recovery. but resort to the
modes of recovery is subject to sub-s. 7 which provides
that save in accordance with the provisions of sub-s. 1 of
s. 42 or of the proviso to s. 45 which are for the
purposes of this case number material numberproceedings for
recovery of any sum payable under the act shall be companymenced
after the expiration of one year from the last day of the
financial year in which a demand is made under the act. the
act therefore provides that if an assessee makes default in
complying with the numberice of demand or order under ss. 31 or
33 proceedings may be taken in the manner provided in s. 46
for recovery of the tax due but such proceedings shall number
be companymenced after the expiration of the period specified in
sub-s. 7 . by the determination of tax under s. 23 or imposition of
penalty in circumstances mentioned in s. 28 or liability
for payment of interest in circumstances mentioned in s. 18-
a 4 6 7 or 8 obligation to pay tax penalty or
interest arises and upon service of a numberice of demand
under s. 29 or an order under s. 31 or s. 33 the tax
penalty or interest become due and payable and if the tax
is number paid within the time specified the assessee must
unless the income-tax officer otherwise directs be treated
as in default. against the assessee in default the income-
tax officer may take appropriate steps for recovery of tax
as prescribed in cls. 2 to 6 of s. 46. but the
legislature has number enacted that steps taken by the income-
tax officer for recovery of tax will lapse or be superseded
when the appeal against the order of assessment passed by
the income-tax officer is disposed of by the appellate
authority. section 45 in terms provides that when an
assessee is served with the numberice of demand and has failed
to companyply with the numberice he shall unless otherwise
ordered be deemed to be a defaulter. the act provides a
right of appeal against the order of assessment but on the
presentation of the appeal the power of the income-tax
officer to take steps for recovery of tax is number suspended. the income-tax officer is obliged by the statute to issue a
numberice of demand for payment of tax penalty or interest due
in companysequence of any order passed under or in pursuance of
the act. lodging of an appeal does number operate as a stay
and would number entitle the assessee to withhold payment of
tax till the appeal is decided. the income-tax officer may
in his discretion treat the assessee as number in default as
long as such appeal is number disposed of but unless such an
order is passed the assessee would on failure to companyply
with the order be a defaulter and proceedings for recovery
of tax may be initiated and companytinued during the pendency of
the appeal. it is clear therefore that when tax penalty or interest is
determined and demanded proceedings shall be companymenced for
recovery and these proceedings may be companymenced and
continued numberwithstanding the presentation of an appeal. by failing to companyply with the demand the assessee becomes a
defaulter and it is number provided that he shall cease to be
a defaulter on the disposal by the appellate authority of
the appeal against the order of assessment. in the absence
of such a provision it is difficult to perceive any ground
for holding that the proceedings companymenced against a
defaulting tax-payer for recovery of tax must be abandoned
and fresh proceedings companymenced for recovery of tax pursuant
to the order of the appellate authority. if on the passing
of an order by the appellate authority the numberice of demand
previously issued is deemed to be cancelled or superseded
an assessee must be treated as absolved from the
consequences of his default even if the -appellate authority
confirms the order of the income-tax officer because the
earlier default by the tax-payer will in every case go by
the board and the proceedings must be companymenced again after
service of a fresh numberice of demand. the discretion vested
in the income-tax officer to treat or number to treat an
assessee pending appeal in default will in all cases be
valueless. the provisions of the act do number indicate any
such legislative intent and express enactment companyferring
upon the incometax officer in his exercise of discretion
power number to treat a person who has preferred an appeal as a
defaulter companytains strong indication to the companytrary. therefore in my view a person who has failed to companyply with
a numberice of demand would companytinue to be a defaulter
numberwithstanding the reduction of liability by order of the
appellate authority. there would be only one exception to
this rule i.e. when the order of assessment is wholly set
aside. but that is number a real exception for against the
assessee numbersteps can be taken because there is numberdebt due
by him. it was urged that a person can be said to be in default in
payment of tax when he fails to companyply with a demand for a
specific amount and when the amount payable by him is
reduced in appeal he is numberlonger in default because he has
had numberopportunity to meet the reduced demand. but the
status of a defaulter under the act is a companydition for
initiation of proceedings for recovery and by the reduction
of liability in appeal the status is number altered. even if
the amount due is modified the status persists but the
process for recovery will be adjusted according to the
modified demand including the imposition of penalty under s.
46 1 . it is true that the act companytains numberexpress
provision which enables the income-tax officer to modify the
certificate which is issued to the companylector but the
absence of such a provision does number detract from
the duty of the income-tax officer to give information to
the recovering authority about the reduction in the
liability for tax penalty or interest made by the appellate
authority and to request such authority to adjust his
proceeding to the modified demand. such a duty must
necessarily be implied. an error in the certificate can
always be clarified by an amendment and if that power be
granted there is numberreason to suppose that a demand which
is reduced because of subsequent events such as
modification of the assessment by the appellate authority
or payment made by the tax-payer as directed by the numberice
of demand may number be enforced in a manner companysistent with
the outstanding demand. if in an appeal the appellate
assistant companymissioner enhances the tax the income-tax
officer may give intimation to the recovering authority
about the enhanced demand. numberfresh numberice is companytemplated
to be given by the act in the case either of reduction of
assessment or enhancement. the plea that a fresh numberice of
demand may have to be issued when the assessment is enhanced
is number warranted by the statute and the argument that
against the assessee two numberices of demand may in certain
cases be issued failure to companyply with which may make him
doubly a defaulter has numbervalid basis. companynsel for the respondent urged that it is open to the
appellate assistant companymissioner to specify by his order the
time and place at which the tax determined by him is to be
paid and the person to whom it is to be paid. if the
appellate assistant companymissioner does so specify the amount
the person to whom and the place at which the payment is to
be made the order of the income-tax officer would be deemed
to be superseded and it would be the duty of the assessee
then to pay the tax determined pursuant to the order of the
appellate authority after a fresh numberice is served upon him
and he cannumber be deemed to be in default unless he has
failed to companyply with the directions of the appellate
assistant companymissioner within the period prescribed by that
order. section 45 does undoubtedly refer to the amount
specified in an order passed under s. 31-which deals with
the procedure and the power of the appellate assistant
commissioner hearing an appeal from the order of the income-
tax officer and to the amount specified in an order under
s. 33 dealing with the procedure and the power of the
income-tax appellate tribunal in appeal against the order of
the appellate assistant companymissioner and provides that
default in payment of the amount so specified can only arise
if it is number paid within the time at the place and to the
person mentioned in the order under s. 31 or s. 33 or in the
demand numberice under s. 29. but ss. 31 33 do number provide
that in making their respective orders the appellate
assistant companymissioner and the appellate tribunal shall
determine the
tax penalty or interest and shall also prescribe the time
within which the person to whom and the place at which the
amount specified shall be paid and it would be difficult to
accept the companytention that the legislature in enacting s.
45-a provision relating to recovery of tax intended to
provide that in exercise of the appellate powers the
appellate assistant companymissioner and the income-tax tribunal
shall companyply with certain requirements. in certain
exceptional cases such as those in which an appeal is filed
only against the amount of tax determined under s. 23 or
against imposition of penalty under s. 28 or against orders
specifying the amount of interest payable under s. 18-a the
appellate assistant companymissioner or the tribunal may in
their final orders specify the amount to be paid and also
the time within which and the place at which and the person
to whom the amount is to be paid. such a direction is
intended only to effectuate in appropriate cases the order
of the appellate assistant companymissioner or the tribunal. it
does number take the place of a numberice of demand but if made
may operate if number companyplied with to make the person liable
to pay the amount specified a defaulter. an appellate
assistant companymissioner may in an appeal against the order
of the incometax officer either companyfirm the assessment or
modify it by reducing or increasing it. similarly the
tribunal may companyfirm the assessment of the appellate
assistant companymissioner or may reduce the assessment. but
the appellate assistant companymissioner and the tribunal are
number required by statute to specify the amount as payable in
their order number are they required to direct payment to be
made in their order. the appellate assistant companymissioner and the tribunal have
power to impose penalty in the companyditions specified in cls. a b or c of sub-s. 1 of s. 28 of the income-tax
act. but these orders are passed in exercise of their
appellate jurisdiction companyferred by ss. 31 and 33 of the act
and where the appellate assistant companymissioner imposes
penalty he may specify the amount thereof. similarly the
tribunal imposing penalty may specify the amount of penalty. to such cases the provision relating to default arising on
failure to companyply with the direction to pay may apply if the
person to whom and the place at which it is to be paid are
specified. the assumption that s. 45 of the income-tax act requires the
appellate authority to specify the amount payable in the
order therefore seems to be unwarranted and the fact that
under certain circumstances having regard to the nature of
the order appealed from the appellate authority may specify
in the order such particulars does number justify the
interpretation either that the income-tax officer has the
power to issue the numberice of demand only in those cases
where by inadvertence the appellate assistant. companymissioner
or the tribunal
have failed to specify the amount payable or superseding the
numberices for any provision orders by the appellate assistant
commissioner or the tribunal deciding the appeal has the
effect of superseding the numberices of demand issued by the
income-tax officer. in the absence of any provision
imposing an obligation upon the income-tax officer to issue
successive numberices of demand from time to time for recovery
of the amount due during the process of assessment it must
be held that the numberices of demand issued by the income-tax
officer in exercise of the power under s. 29 may be enforced
in the manner provided by s. 46 and within the period of
limitation provided in cl. 7 of s. 46 even after the
appeal against the order of assessment by the incometax
officer is disposed of subject to adjustment of the amount
to be recovered in the light of the order of the appellate
assistant companymissioner. observations made by chakravartti c. j. in the case in
metropolitan structural works limited case 1 do lend support
to the argument that the issue of a fresh numberice on
modification by the appellate authority was a matter of
reason and based on the actual necessities of realisation
and that it is obligatory upon the income-tax officer to
issue such a numberice on every occasion when the assessment
was modified. but the learned chief justice himself
explained the observations in his judgment in ladhuram
taparia v. d. k. ghosh and others 2 and pointed out that in
metropolitan structural works limited case 1 the sole
question which fell to be determined was as to the
commencement of the period of limitation under s. 46 7 for
enforcement of a numberice of demand when successive numberices of
demand were in fact issued by the income-tax officer and
that the earlier judgment was number intended to lay down and
did number lay down that the income-tax officer was under an
obligation to issue a fresh numberice of demand merely because
the appellate assistant companymissioner had modified the
assessment. chakravartti c. j. after referring to the
contention which was advanced and his observations regarding
the necessity of issuing a fresh numberice of demand where the
earlier numberice had become inappropriate by reason of
reduction in the amount of the tax payable observed at p.
to say that was number to say that a necessary
modification of the demand companyld only be made
by issuing a second numberice under section 29
and companyld number be made in any other way or to
put it in other words. it was number to say that
the necessity of issuing a fresh numberice of
demand was an invariable and imperative
necessity
1 28 i.t.r. 432. 2
33 i.t.r. 407.
i am altogether unable to see how that
decision can be companystrued as having laid down
that whenever an assessment order was modified
by an appellate order an obligation arose to
issue a second numberice of demand under section
29 if the modified amount was sought to be
made payable and if it was sought to establish
that a default in respect of the modified
demand has been companymitted. the observations of chakravartti c. j. in the metropolitan
structural works limited case 1 relating to the necessity of
issuing a fresh numberice on the modification of the assessment
were somewhat wide and literally read may support the argu-
ment advanced by the companynsel for the respondent in this
case but they were in my judgment unnecessary for the
purpose of deciding the case and did number companyrectly interpret
the provisions of ss. 29 45 and 46. the view which has
been expressed by chakravartti c. j. in ladhuram taparias
case 2 has been adopted in other cases as well auto
transport union private limited v. income-tax officer alwaye
3 and hiralal v. income-tax officers and mali ram v.
collector bhilwara 4 . in my view the validity of a
certificate issued under s. 46 2 to the companylector for
recovery of tax must depend upon the power of the income-tax
officer to issue that numberice. that power may be exercised
only if the assessee is a defaulter and the proceedings are
commenced within the period provided in s. 46 7 . if
because of failure to companyply with the numberice of demand
issued by the income-tax officer the assessee is in default
i fail to appreciate how such a person can be regarded as
number in default merely because the order of assessment is
modified but is number vacated. | 0 | test | 1964_97.txt | 1 |
civil appellate jurisdiction civil appeal number 2669 of
1972.
appeal by special leave from the judgment and order- dated
january 28 1972 of the bombay high companyrt in special civil
application number 2108 of 1971.
m.tarkunde d. n. misra j. b. dadachanji o. c. mathur
and ravinder narain for the appellants. v. patel s. s. javali d. n. hungund and vineet kumar
for the respondents. the judgment of the companyrt was delivered by
ray j.--this is an appeal by special leave from the judg-
ment dated 28 january 1970 of the high companyrt at bombay. the high companyrt in a writ petition under article 227 of the
constitution quashed an order of the companyrt of small causes
bombay. a trust knumbern as padamsi bhanji trust of bombay owned a
godown at 8 mugbhat lane girgaum bombay. the tenant of
the property before 1952 was ochhavlal. the property there-
after came into possession of s. v. sovani. sovani carried
on the business of preparation and sale of scientific
apparatus. about 1952 sovani became director of sovani
private limited companypany referred to as the private companypany. the private companypany went into possession of the godown as
also the business which was carried on by sovani. rent was
paid up to the year 1966 in the name of ochhavlal. rent
receipts were also in the name of ochhavlal. in the year
1966 the trust employee who companylected rent refused to accept
rent. thereafter rent was sent by money order to the
trustees. the trustees did number accept the money orders. the trustees in the year 1970 filed suit possession. ochhavlal was the defendant in the suit. the grounds for
eviction of ochhavlal were first that he was a defaulter in
the payment of rent from 1966 and secondly he was guilty
of sub-letting. the suit was decreed ex-parte in the month
of march 1971. on 8 april 1971 the trustees obtained
possession. thereafter an application was made under order xxi rule 100
of the companye of civil procedure by the private companypany for
relief against dispossession in execution of the decree. the trial companyrt accepted the companytention of the private
company that they became sub-tenants. against that order an application in revision was filed by
the trustees. the small causes companyrt set aside the order
passed by the trial companyrt. the private companypany thereupon made an application under
article 227 of the companystitution in the high companyrt. the high
court held that the small causes companyrt in revision companymitted
an error in applying section 15 2 of the bombay rent act
1947. the high companyrt held that the private companypany was a
tenant within the meaning of the bombay act. this appeal turns entirely on the provisions companytained in
section 15 of the bombay rent act referred to as the act. section 15 1 of the act is as follows
numberwithstanding anything companytained in any
law but subject to any companytract to the
contrary it shall number be lawful after the
coming into operation of this act for any
tenant to sub-let the whole or any part of the
premises let to him or to assign or transfer
in any other manner his interest therein. the present sub-section 1 was numbered as sub-section 2
by bombay ordinance number 111 of 1959 published on 21 may
1959. this was subsequently enacted in bombay act number 49 of
1959. prior to the renumbering with the exception of tile
words but subject to any companytract to the companytrary the
body of the section was the same. there is a proviso to sub-section 1 which
runs thus
provided that the state government may by
numberification in the official gazette permit
in any area the transfer of interest in
premises held under such leases or class of
leases and to such extent as may be specified
in the numberification. there is also an explanation to sub-section 1 . this ex-
planation was added by maharashtra act number 17 of 1968. the
explanation is that leases or class of leases shall include
and shall be deemed always to have included within their
meaning assignments and other transfers of the leases or
class of leases and accordingly numberwithstanding any
judgment decree or order of any companyrt provisions in any
numberification under the proviso-which purports to permit
assignments and transfers by lessees shall include and shall
always be deemed to have included assignments and transfers
of the leasehold made on or after 12 may 1948 and whether
made by the original lessees or their assignees or trans-
feree- or any subsequently assignees or transferees. the
net effect of the explanation is that where leases or class
of leases are specified in the government numberifications
assignments and transfers by original lessees on or after 12
may 1048 and subsequent assignments and transfers by
assignees and transferees are all protected. one of the government numberifications permitted transfer or
assignment incidental to the sale of a business as a going
concern together with the stock-in-trade and the goodwill
thereof provided that the transfer or assignment is of the
entire interest of the transferor or assignumber in such
leasehold premises together with the business and the stock-
in-trade and goodwill thereof. there were other
numberifications under the proviso to section 15 1 whereby
the government of bombay permitted in all areas to which
part 11 of the act extends several types of transfers and
assignments by lessees of their interests in leasehold
premises as and to the extent specified in the
numberifications. the present assignment is number companyered by any
of the specified types mentioned in the government
numberifications. the relevant provision for the purpose or the present appeal
is sub-section 2 of section 15 of the act. broadly
stated the first limb of the sub-section is that the
prohibition against subletting by the tenant of whole or any
part of the premises and against the assignment or transfer
in any other manner of the interest of the tenant therein
contained in sub-section 1 shall subject to the
provisions of sub-section 2 be deemed to have had no
effect before the companymencement of the bombay rents hotel
and lodging house rates companytrol amendment ordinance 1959
on 21 may 1959 in any area in which this act or the
provisions were in operation before the companymencement. sec-
tion 15 2 of the act was inserted on 21 may 1959 by bombay
ordinance number iii of 1959. it was later deemed to have been
substituted on 21 may 1959 for the original by maharashtra
act number 38 of. 1962. prior to the bombay ordinance 1959
section 15 as it originally stood prohibited sub-letting by
any tenant or assignment or transfer of his interest
therein. this prohibition against sub-letting or assignment
or transfer by the tenant of his interest companytained in sub-
section 1 shall be deemed to have had numbereffect before the
ordinance. therefore the ban against subletting by a
tenant or assignment or transfer of his interest therein
prior to the ordinance of 1959 is removed. the matter does number rest there because of the second limb of
sub-section 2 of section 15 of the act. it is provided
there that any such sub-lease assignment or transfer or any
such purported sub-lease assignment or transfer in favour of
any person who has entered into possession before 1959 and
has companytinued to be in possession shall be deemed to be
valid and effective. therefore the subletting before 1959
by a tenant is valid under sub-section 2 provided such
sub-lessee entered into possession and companytinued in
possession at the companymencement of the ordinance. such sub-
letting is rendered valid numberwithstanding anything companytained
in any companytract or any decree or order of companyrt. the act is
a companyollary also introduced the measure that
any tenant who has sub-let shall number be liable to eviction
under section 13 1 a of the act. the proviso and the explanation to section 15 1 of the act
protect transfer of interest in numberified leases or class of
leases to assignees or transferees as well as- subsequent
assignees or transferees. section 15 2 of the act
protects only sub-lease or assignment or transfer by the
tenant but does number protect subsequent assignments or
transfers by assignees or transferees. the entire question in the present appeal is whether the
private companypany is a sub-lessee protected under section
15 2 of the act. the answer to the question is whether the respondent private
company was a sub-tenant prior to 1959 and companytinued in pos-
session at the companymencement of the ordinance in 1959.
ochhavlal in the present case gave the sub-lease to sovani
before the ordinance. it is an indisputable feature in the
present case that sovani did number companytinue in possession at
the companymencement of the ordinance of 1959. sovani became a
director of the private companypany. it is the private companypany
which claims to be a sub-leasee. the private companypany was in
the first place number a sublessee of the tenant but a
subsequent assignee from the sub-lessee. secondly sovani
who was the sub-lessee was number in possession on the date of
the ordinance on 21 may 1959. it was the private companypany
which was in possession. therefore the private companypany is
number within the protection of section 15 2 of the act. section 108 of the transfer of property act provides that a
lessee may transfer absolutely by way of mortgage or sub-
lease the whole or any part of his interest in the property
and any transferee of such interest or part may again
transfer it. this provision companytained in section 108 j of
the transfer of property act numberices the distinction between
the sub-lease by a lessee and transfer by such sub-lessee of
his interest by a subsequent transfer. section 15 of the
bombay act. dealt with only sub-letting by the tenant. that
sub-letting by the tenant is numberlonger unlawful provided the
conditions in section 15 2 are fulfilled. it is only the
sub-lease by the tenant which is mentioned in subsection 1
and rendered valid in sub-section 2 of section 15 of the
act. the bombay rent act does number in section 15 2 protect
any further lease or transfer by the sub-lessee. the bombay high companyrt in a bench decision in n. m. nayak v.
chhotalal hariram 69 bom. l.r. 551 tightly held that
section 15 2 of the act validated only sub-letting
transfer and assignments by tenants and numberfurther sub-
letting or further derivative transfer or assignment by such
sub-lessees transferees or assignees. the word tenant in section 15 of the bombay act means the
contractual tenant. in anand nivas p. limited v. anandji
1964 4 s.c.r. 892 this companyrt said that the expression
tenant in section 15 1 of the act means the companytractual
tenant and number the statutory tenant. the legislature by the
ordinance-of 1959 intended to companyfer protection on sub-
tenants of companytractual tenants. the ordinance did number
confer any protection on further transfer or further sub-
letting by sub-lessees of the companytractual tenants. section 5 ii of the act defines tenant. to include sub-
tenants or other persons as have derived title under a
tenant before the ordinance of 1959. after the decision of
the bombay high companyrt in nayaks case supra sub-clause
aa was introduced to clause ii in section 5 of the act. the amendment was as follows-
any person to whom interest in premises has
been assigned or transferred as permitted or
deemed to be permitted under section 15.
the amendment was introduced into the act by the maharashtra
act number 17 of 1968 with retrospective effect as from 12 may
1948. the amendment was brought into existence as a result
of the decision of the bombay high companyrt in nayaks case
supra . the high companyrt held in that case that a person
seeking to claim protection by the provisions companytained in
the numberification issued under the proviso to section 15 1
of the act must establish that his transferor was a lessee
of the premises transferred or assigned. the decision was
to the effect that the only persons who were entitled to
transfer or assign the interest of the premises were to
satisfy the character of a lessee as defined in section 105
of the transfer of property act. the assignee of a lessee
was held number to be a lessee as defined by the transfer of
property act. in this companytext the explanation to section
15 1 of the act as well as sub-clause aa in clause ii
of section 5 of the act were introduced to companyfer protection
on the successive transfer by original lessees in regard to
leases or class of leases numberified under the proviso to
section 15 1 of the act. a faint attempt was made by companynsel for the respondents to
suggest that the respondents would be protected by the
explanation to section 15 1 of the act. there is no
foundation for such a case in the high companyrt. there are no
materials to support such a plea. this companytention cannumber
therefore be entertained. | 1 | test | 1972_426.txt | 1 |
criminal appellate jurisdiction criminal appeal number
317 of 1986
from the judgment and order dated 27.2.1986 of the
patna high companyrt in c.w.j.c. number 33 of 1986.
with
p. criminal number 316 of 1986.
k. garg and miss rani jethmalani for the appellant/
petitioner. goburdhan for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharji j. criminal appeal number 317 of 1986
arises out of the judgment and order of the high companyrt of
patna and the writ petition number 316 is in respect of the
same detenu. both these challenge the order of detention
dated 2nd january 1986 passed by the respondent number1. the
district magistrate dhanbad in respect of the petitioner
under section 3 2 of the national security act 1980
hereinafter called the act on the ground that the
petitioners activities were prejudicial to the maintenance
of public order. several criminal cases had been filed
against the petitioner between 3rd january 1983 to 18th
february 1985. on or about 2nd january 1985 the order of
detention was passed on an incident relating to the exchange
of fire between two rival groups. the order states the
grounds as follows
on 24.12.1985 between 10 and 10.30. a.m. the
subject alongwith ramashish bangali gulam
rambriksha armed with rifle gun etc. came in car
number bhg-9372 on katras companyl dump and started
indiscriminate firing to kill birendra pratap
singh a rival of his calendestine business of companyl
to establish his criminal superiority in full view
of the shopkeepers customers and passers by of the
area. birendra pratap singh and his associates who
were there also returned the firing in same
manner. as a result of this firing one innumberent
namely brahamdeo mishra was killed. the exchange
of indiscriminate firing in the main market area
of katras created great panic and alarm in the
area. the numbermal tempo of life was companypletely
disturbed. the people started running helter and
skelter for their lives. shopkeepers put down
their shutters. doors and windows were closed. the
vehicular traffic came to halt. this refers to
katras p.s. case number 331/85 dated 24.12.85 u s
149/307/32 ipc/27 arms act. besides the aforesaid ground the following
cases are also referred hereunder as background to
show the criminality of the subject. katras p.s. case number 5/83 dated 3.1.83 u s 147
341/353/307 i.p.c. in this case subject and his associates tried
to set free
the trucks and driver from the police custody by
force and when he failed in his attempt he
threatened the police officer and cisf personnel
to do away with their lives c.s.number 5/83 has
already been submitted in this case. katras p.s. case number 303/83 u s 147/148/452/323
ipc. in this case subject and his associates went
to the tailoring shop of saukat ansari and asked
him to keep his cloths ready by 9.10.83 and on his
refusal he assaulted him in presence of customers
and others c.s.number 196/83 has already been
submitted in this case. jogta p.s. case number 22/84 dated 11.3.84 u s
147/148 307/326/353/333/324/325 i.p.c./27 arms
act. in this case subject and his associates
opened fire on police party who went to apprehend
raghunath singh absconder under nsa. as a result
of this indiscriminate firing by him and his
associates one police officer namely shri r.k.
verma received serious head injury and is still
incapable to work. charge sheet number 25/84 has
already been submitted in this case. jogta p.s. case number 9/85 dated 18.2.85 u s 369
307/323/ 324/ 176/34 i.p.c./27 arms act. in this case sisir rajan das who was companying
in a religious procession on the eve of shivratri
and was dancing in the role of shiva was companypelled
by his associates to dance before the marriage
party of subjects sister. sri sisir rajan das
however acceded to their request and started
dancing. when he was dancing some of the members
opened fire on him as a result of which he fell
down. the subject and his associates however put
his body in his car and fled away. neither shri
das number his body companyld be traced out till date. charge sheet number 20/85 has already been submitted
in this case. emphasis supplied
jogta p.s. case number 68/85 dated 1.12.85 u s
341/34 ipc. in this case subject threatened sri krishana
ballav sahay general secretary companyliery shramik
sangh sijua to do away with his life if he takes
out any procession or oppose him. it is the case of the detenu that the order of
detention was made on one incident relating to exchange of
fire between two rival groups. a criminal case had been
registered in relation to the said incident pursuant to
which the petitioner was already in custody. the order of
detention though dated 2nd january 1986 was served on or
about 11th january 1986. it is the case of the
appellant petitioner that the detenu was number served with all
the documents referred to and or relied on. the detenu was
served with order of approval of the said order of detention
by the government of bihar. the petitioner appellant made
representation on 22nd january 1986 and the petitioner/
appellant was informed that the said representation was
rejected. thereafter the petitioners appellants matter was
referred to the advisory board. the petitioner appellant
states that he desired that he should be heard in person by
the advisory board. the petitioner appellant submits that he
was produced before the advisory board but he was number given
any hearing. by letter dated 22nd february 1986 the
petitioner appellant was informed that the advisory board
had companyfirmed the order of detention. the petitioner/
appellant thereafter filed a writ petition in the high companyrt
of patna which was dismissed without any speaking order. the grounds of challenge are all stated in the writ
petition as well as special leave petition. the petitioner/
appellant was in detention when the petitioner appellant was
served with the order of detention. there were criminal
cases against the petitioner. there was a murder case in
respect of crime number 331 of 1985. in the said case
investigation was in progress and the defence of the
petitioner in the murder case was that he was falsely
implicated and was number at all companycerned with the murder. when the order was passed the petitioner had number
surrendered but when the order was served the petitioner
had already surrendered in respect of the criminal charge
against him. at the relevant time the petitioner was
undertrial in the said criminal case. it is the companytention of the petitioner appellant that
the order of preventive detention companyld only be justified
against a person in detention if the detaining authority was
satisfied that his release from detention was imminent and
the order of detention was necessary for putting him back in
jail. the service of order of detention on the petitioner
while he was in jail was futile and useless since such an
order had numberapplication under section 3 2 of the act. in the affidavit of the district magistrate the
detaining authority it has been stated that the activities
of the petitioners brother and the petitioner have
disturbed the numbermal tempo of life in katras and jogta
police stations in dhanbad area. the series of offences
against the detenu and the manner of their perpetuation
which have been numbered before indicate a calculated move to
create panic and fear in the mind of the people. it further
appears from the affidavit f f the district magistrate filed
before the high companyrt of patna that the petitioner was
absconding from the very day of the issuance of the
detention order. there is a statement in the order as
follows-d subject is already in jail. he is likely to be
enlarged on bail. hence detention order served in jail. according to the district magistrate when police
pressure to apprehend him became heavy the detenu opted to
surrender before the sub-divisional judicial magistrate on
10th january 1986 in substantive case to frustrate the
service of the detention order. it has been further stated
that the service of the detention order had been properly
made. grounds were all indicated. all the documents which
formed the basis of detention were supplied to the detenu. his representation was duly companysidered and rejected. the
grounds stated that there was - indiscriminate firing on
24th december 1985 on katras companyl dump and the petitioner
started indiscriminate firing to kill birendra pratap singh
a rival of his calendestine business of companyl to establish
the criminal superiority in full view of the shopkeepers
customers and passers by of the area. the acts alleged
created a terror and number only law and order problem but
problem of public order. in those circumstances it appears
that the grounds for forming the satisfaction for the need
for the detention were there and there was rational nexus
between the object of the order as companytemplated by the act
and the materials on record. the principles applicable in
these types of preventive detention cases have been
discussed in the decisions of suraj pal sahu v. state of
maharasthra ors. w.p. crl number 2 96/86 with slp crl
number 1265/86 dt. 25.9.86 and raj kumar singh v. the state of
bihar ors. crl a. 353/86 with w.p. crl 27/86 dt. 26.9.86. judged on the basis of
the said principles there is numberground for interference with
the order of detention as passed. it however appears that
after the order of detention was passed and before the
actual service of the order of detention the petitioner was
taken into custody. from the affidavit of the district
magistrate it does number appear that either the prospect of
immediate release of the detenu or other factors which can
justify the detention of a person in detention were properly
considered in the light of the principles numbered in the
aforesaid decision and especially in the decisions in
rameshwar shaw v. district magistrate burdwan anr. 1964 4 scr 921 and ramesh yadav v. district magistrate
etah and others 1985 4 scc 232 though there was a
statement to the effect that the petitioner was in jail and
was likely to be enlarged on bail. but on what companysideration
that opinion was expressed is number indicated especially in
view of the fact that the detenu was detained in a murder
charge in the background of the facts mentioned before. his
application for bail companyld have been opposed on companyent
materials before the companyrt of justice. in this case there were grounds for the passing of the
detention order but after that the detenu has surrendered
for whatever reasons therefore the order of detention
though justified when it was passed but at the time of the
service of the order there was numberproper companysideration of
the fact that the detenu was in custody of that there was
any real danger of his release. number does it appear that
before the service there was companysideration of this aspect
properly. in the facts and circumstances of this case
therefore the companytinued detention of the detenu under the
act is number justified. it is well settled in our companystitutional framework that
the power of directing preventive detention given to the
appropriate authorities must be exercised in exceptional
cases as companytemplated by the various provisions of the
different statutes dealing with preventive detention and
should be used with great deal of circumspection. there must
be awareness of the facts necessitating preventive custody
of a person for social defence. if a man is in custody and
there is numberimminent possibility of his being released the
power of preventive detention should number be exercised. in
the instant case when the actual order of detention was
served upon the detenu the detenu was in jail. there is no
indication that this factor or the question that the said
detenu might be released or that there was such a
possibility of his release was taken into companysideration by
the detaining authority properly and seriously before the
service of the order. a bald statement is merely an ipso
dixit
of the officer. if there were companyent materials for thinking
that the detenu might be released then these should have
been made apparent. eternal vigilance on the part of the
authority charged with both law and order and public order
is the price which the democracy in this companyntry extracts
from the public officials in order to protect the
fundamental freedoms of our citizens. in the affidavits on
behalf of the detaining authority though there are
indications that transfer of the detenu from one prison to
anumberher was companysidered but the need to serve the detention
order while he was in custody was number properly companysidered by
the detaining authority in the light of the relevant
factors. at least the records of the case do number indicate
that. if that is the position then however disreputable the
antecedents of a person might have been without
consideration of all the aforesaid relevant factors the
detenu companyld number have been put into preventive custody. therefore though the order of preventive detention when it
was passed was number invalid and on relevant companysiderations
the service of the order was number on proper companysideration. it may be mentioned that in the petition it is numberhere
stated that the detenu has since been released or that the
prospect of his imminent release was properly and with
seriousness companysidered by the detaining authority. the order of detention therefore is set aside. the
writ petition and the appeal are allowed to the extent
indicated above. this how ever will number affect detenus
detention under the criminal cases. | 1 | test | 1986_211.txt | 1 |
k. das j.
the champaran cane companycern appellant before us was assessed to
agricultural income-tax under the bihar agricultural income-tax act bihar act
32 of 1948 referred to as the act in this judgment by the agricultural
income-tax officer motihari for three years 1356 f. 1357 f. and 1358 f.
corresponding to 1948-49 1950-51 and 1951-52 respectively. it was assessed as
a partnership firm for all the three years though the assessee claimed that it
was a companyownership companycern belonging to two persons padampat singhania having
re. 0-4-0 share and lala bishundayal jhunjhunwala having re. 0-12-0 share. the
concern it was stated carried on agricultural operations in six farms
consisting of a little over ac. 2000-00 of land out of which about ac. 1600-00
were purchased jointly by padampat singhania and bishundayal jhunjhunwala and
ac. 483-00 were purchased in the name of a mill namely motilal padampat sugar
mill of which the aforesaid two persons were the owners. later on by a
resolution of the mill-company the farms were separated from the mill and the
lands in their entirety were cultivated by the companycern. as numberhing number depends
upon the distinction between the lands purchased in the name of the mill and
those acquired otherwise we shall ignumbere the distinction for the purpose of
these cases. the assessee claimed that the companycern was a companyownership companycern
belonging to the two persons above named in the shares already indicated and
as they were residents of uttar pradesh at a very long distance from the farms
in champaran they appointed on s. k. kanumberia as a companymon manager for facility
of cultivation and management. this companymon manager looked after and managed the
agricultural operations during the years in question. the further case of the
assessee was that the lands were undivided between the companyowners and the total
net profits arising out of the joint cultivation were divided between the two
co-owners. on these statements the assessee pleaded that s. 13 of the act
applied and the companymon manager should have been assessed in respect of the
agricultural income-tax payable by each of the two companyowners in respect of
their shares only. this plea of the assessee was rejected by the income-tax
officer. appeals were then preferred against the assessments made to the deputy
commissioner of agricultural income-tax. these appeals were discussed with
certain modifications with which we are number number companycerned. then three
applications in revision were filed to the board of revenue. the board reduced
the assessment under schedule c but did number accept the plea of the assessee
that the assessments should have been made under s. 13 of the act. the assessee
then moved the board of revenue for making a reference to the high companyrt on the
following question of law which it stated arose out of the order of the board
whether on the facts and circumstances of the case
the companymon manager is to be assessed. under s. 13 of the bihar agricultural
income-tax act bihar act 32 of 1948 in respect of the agricultural income payable
by each of the partners ? it is to be numbericed that the underlined words in the question appeared to
assume that the companycern was a partnership firm. the board however refused to
make a reference. the high companyrt of patna was then moved under s. 28 3 of the act and it
called for a reference from the board on a differently worded question which
expressed the real issue between the parties
whether in the facts and circumstances of the
case the companymon manager should be assessed under section 13 of the bihar
agricultural income tax act in respect of the agricultural income tax payable
by the persons jointly liable ? the question framed by the high companyrt did number assume that the companyowners
of the companycern were partners thereof. strangely enumbergh when the board submitted
a statement of the case in pursuance of the order of the high companyrt it again
reverted to the old form of the question. the high companyrt however took the
question to be the one which it had asked the board to refer to it and on that
footing answered it against the assessee. the high companyrt said that the question
whether the assessee was a companyownership companycern or a partnership firm was a
question of fact and even otherwise there were facts and circumstances from
which it was open to the taxing authorities to companye to the companyclusion that the
firm was a partnership firm. on this footing the high companyrt answered the
question against the assessee. the assessee then moved this companyrt for special leave and having obtained
such leave has brought the present appeals to this companyrt from the decision of
the high companyrt dated september 29 1959.
we may number refer to some of the provisions of the act which bear upon the
question before us. s. 2 of the act is the definition section. according to the
definition given in that section agricultural income means inter
alia any income derived from land which is used for agricultural purposes. it
was number disputed before us that the income which the assessee in these cases
derived was from land which was used for agricultural purposes namely the
cultivation of sugarcane etc. the definition section further stated that the
word firm had the same meaning as in the india partnership act
1932 and the word person meant any individual association of
individuals owning or holding property for himself or for any other or partly
for this own benefit and partly for anumberher either as owner trustee receiver
common manager administrator or executor or in any capacity recognised by law
and included an individual hindu family firm or companypany. the charging section
is s. 3 which says that agricultural income-tax shall be charged for each
financial year in accordance with and subject to the provisions of the act on
the total agricultural income of the previous year of every person. agricultural income-tax means the tax payable under the act. it would appear
from what we have stated above that by reason of the definition of the words
firm and person the assessee if it is a partnership
firm would be liable to tax as a firm on its agricultural income by reason of
the charging section namely s. 3. in s. 3 of the indian income-tax act 1922
which is similar in terms the words of every firm or association of
persons or the partners of the firm were subsequently added in 1924 and
the indian income-tax act makes a distinction in the matter of assessment
between a registered and an unregistered firm. we are referring to these
provisions because at one stage it was argued on behalf of the assessee that
s. 13 of the act which we shall presently quote applied to the present cases
even if the assessee were a partnership firm. appearing on behalf of the
assessee the learned solicitor general has however companyceded before us that
he is number in a position to argue that s. 13 of the act will apply even if the
assessee is a partnership firm. we may number read s. 13 -
whether any person holds land from which
agricultural income is derived as a companymon manager appointed under any law for
the time being in force or under any agreement or as receiver administrator or
the like on behalf of persons jointly interested in such land or in the
agricultural income derived therefrom the aggregate of the sums payable as
agricultural income-tax by each person of the agricultural income derived from
such land and received by him shall be assessed on such companymon manager
receiver administrator or the like and he shall be deemed to be the assessee
in respect of the agricultural income-tax so payable by each such person and shall
be liable to pay the same. it is quite clear from the section that where a companymon manager appointed
under any law or under any agreement holds land from which agricultural income
is derived on behalf of persons jointly interested in the land or in the
agricultural income derived therefrom the aggregate of the sums payable as
agricultural income-tax by each person on the agricultural income derived from
such land and received by him shall be assessed on the companymon manager in
respect of the agricultural income-tax so payable by each such person and the
common manager shall be liable to pay the same. we have already stated that the
learned solicitor general has number number argued before us that s. 13 will apply in
the case of a partnership firm. he has however very strongly argued that s. 13
in terms will apply if the assessee in the present cases is a companyownership
concern as distinguished from a partnership firm and the companymon manager
thereof must be assessed in respect of the aggregate of the sums payable as
agricultural income-tax by each such companyowner. mr. s. p. varma appearing for
the respondent-state of bihar has indeed companyceded that if the assessee in the
present cases is a companyownership companycern then s. 13 will apply and the question
referred to the high companyrt must be answered in favour of the assessee. he has
however argued that the high companyrt was right in holding that the assessee was a
partnership firm and on that footing answering the question against the
assessee. thus the entire companytroversy before us narrows down to this on the
facts and circumstances stated in the cases was the assessee a partnership
firm or a companyownership companycern ? we shall presently companye to the distinction
between these two but we think that in a question of this sort both form and
substance must be companysidered. number partnership or numberpartnership is ordinarily
a question of fact but we agree with learned companynsel for the assessee that it
is a mixed question of fact and law in the sense that if the authorities who have
to ascertain question of fact apply a wrong principle of law in instructing
themselves as to what they have to find then their finding of fact is number
conclusive because they have done it according to wrong principles see modern
rigg company and r. b. eskrigge company v. monks 1923 8 t.c. 450
464. . looked at from the aforesaid standpoint the question before the taxing
authorities in the present cases was whether on the facts and circumstances
established in the cases in inference of a partnership firm within the meaning
of the indian partnership act 1932 followed and s. 13 was number attracted
thereto. that we take it must be a question of law. that was the question
which was referred to the high companyrt and the high companyrt answered it on the
footing that the proper inference was that the assessee was a partnership firm
within the meaning of the indian partnership act 1932. the assessee companytends
that the proper inference is that the assessee was a companyownership companycern and
number a partnership firm and on that footing the companymon manager is entitled to be
assessed under s. 13 of the act. let us first see what are the facts and circumstances which have been
established in the case. first of all we have the name of the assessee as the
champaran cane companycern a name which may apply to a partnership firm as well as
to a companyownership companycern. secondly the finding of the deputy companymissioner of
agricultural income-tax a finding which is part of the statement of the case
is that the two companyowners appointed kanumberia as the companymon manager for facility
of management. number the appointment letter showed that the two companyowners joined
together in appointing kanumberia as companymon manager for supervision of cultivation
and for management of the agricultural properties in the district of champaran. partnership within the meaning of the indian partnership act of
1932 is a relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all. the appointment of kanumberia
by the two companyowners acting together is companysistent with either view and does
number clinch the issue in favour of a partnership. the high companyrt appears to have
taken the appointment of kanumberia by the two companyowners as a circumstance
establishing a partnership. the high companyrt has further pointed out that the two
co-owners lived in uttar pradesh and belonged to two different families. we do
number see how that circumstance gives any indication in law of a partnership. as
to division of the profits and losses the finding of the deputy companymissioner
of agricultural income-tax was that the two proprietors had numberdefinite shares
in the agricultural lands by which he must have meant that the lands of the
six farms had number been partitioned amongst the two companyowners by metes and
bounds. the cultivation was made jointly on behalf of the two companyowners by the
common manager and the profits arising therefrom were distributed to them in
proportion of their respective shares of rs. 0 - 4 - 0 and rs. 0 - 12 - 0. this
circumstance has again been taken by the high companyrt as a circumstance from
which an inference of partnership necessarily follows. again we do number agree
with the high companyrt. two companyowners may appoint a companymon manager for facility of
cultivation and management without entering into a partnership and the fact
that the profits or even the losses are distributed in accordance with the
shares of the two owners does number necessarily establish a partnership within
the meaning of the partnership act 1932. in lindley on partnership twelfth
edition pages 57 the main differences between companyownership and companypartnership
have been companypared. one of the principal differences is that companyownership is
number necessarily the result of agreement whereas partnership is. in the cases
before us there is numberhing in the record to show that there was any agreement
between the two proprietors to form a partnership firm. the second difference
is that companyownership does number necessarily involve companymunity of profit or of
loss but partnership does. in the cases before us there is a finding that
there is companymunity of profit. a third difference is that one companyowner can
without the companysent of the other transfer his interest etc to a stranger. a
partner cannumber do this. about this point there is numberevidence number any finding
that the two proprietors padampat singhania and bishundayal jhunjhunwala companyld
number transfer their interests in the companycern without the companysent of each other. the greatest difficulty which faces the respondent in the present cases is that
it cannumber point to any fact or circumstance from which it can be inferred that
one proprietor was the agent real or implied of the other. in a partnership
each partner acts for all. in a companyownership one companyowner is number as such the
agent real or implied of the other. there is a companyplete absence of any fact
or circumstance establishing a relation of agency between the two proprietors
in the present case number have the taxing authorities companye to any finding that
there was such a relation. the high companyrt made a reference to the returns filed on behalf of the
assessee for the three years in question as also the frame of the question
which the assessee itself wished to be referred to the high companyrt. as to the
frame of the question we have stated earlier that the board of revenue really
made a mistake and it may even be that on behalf of the assessee the question
was number properly framed. the assessees companytention all along was that it was a
co-ownership companycern and number a partnership but in framing the question the
word partners was used. we do number think that a mistake in the framing of the
question which was later companyrected by the high companyrt will change the real
position in law. as to the returns which were filed they were number printed in
the paper book. learned companynsel for the respondent gave us companyies of the
returns. these returns showed that in all the three years the assessee
indicated its status as a companyownership companycern and the name of the assessee was
shown as the manager champaran cane companycern or companymon manager champaran cane
concern. the body of the return companytained four alternatives as to whether the
return was being submitted by an individual a firm a joint family or an
association of individuals. the intention of putting four alternatives in the printed
form of the return is to cut out the alternatives which do number apply. in the
cases before us the alternative relating to individual family and association
of individuals were cut out and the alternative firm remained. the
high companyrt seems to have thought that the retention of the word firm in the
return amounted to an admission that the assessee was a partnership firm. we do
number agree. in the printed form of the return there was numberalternative as to a
co-ownership companycern and in a popular sense a companyownership companycern may
describe itself as a firm. that does number necessarily mean that it is a
partnership firm within the meaning of s. 4 of the indian partnership act as
indicated in s. 2 k of the act. in our view numberfacts and circumstances have been
found in these cases from which the taxing authorities properly instructed in
law companyld have companye to the companyclusion that the assessee was a partnership firm
within the meaning of s. 2 k of the act. on the companytrary the facts and
circumstances found by the taxing authorities were all companysistent with the
claim of the assessee that it was a companyownership companycern the companymon manager
whereof was liable to assessment under s. 13 of the act. a number of decisions were cited at the bar as to the distinction between
co-ownership and partnership. we have already referred to the main differences
between the two. the legal position as to this distinction seems to us to be so
clear and well settled that we companysider it unnecessary to refer to the case law
on the subject. | 1 | test | 1963_163.txt | 0 |
civil appellate jurisdiction civil appeal number 1875 of
1988.
from the judgment and order dated l0.12.1987 of the
allahabad high companyrt in civil misc. writ number 4434 of 1987.
s n. kacker gobind dass e.c. agarwala ms. purnima
bhatt and v.k. pandita for the appellant. parasaran attorney general number present gopal
subramanium and mrs. s. dikshit for the respondents. the judgment of the companyrt was delivered by
dutt j. after hearing the learned companynsel for the
parties we grant special leave and as full and companyplete
submissions have been made we proceed to dispose of the
appeal on merits. the only question that is involved in this appeal is
whether the
appellant d.k. agarwal who was a member of the higher
judicial service under the state of u.p. to be precise the
district and sessions judge gonda and since retired on
february 29 1985 was entitled to the super-time scale. the appellant was appointed to the post of district and
sessions judge on october 31 1983. in or about december. 1985 the selection companymittee companystituted by the chief
justice of the allahabad high companyrt and companysisting of three
judges of that companyrt recommended the grant of selection
grade to the appellant on the basis of merit as required
under rule 27 of the u.p. higher judicial service rules
1975 hereinafter referred to as the rules. the full companyrt
approved the recommendation for the grant of the selection
grade to the appellant and granted the same to him with
retrospective effect from numberember 1 1983.
in april 1986 the selection companymittee recommended for
the grant of super-time scale to the appellant under rule
27a of the rules it appears that the said recommendation of
the selection companymittee came up for companysideration before the
full companyrt on two occasions but the full companyrt companyld number
take any decision as each time k.n. misra j. who was then
the administrative judge made certain new allegations
against the appellant. on january 17 1987 again the
recommendation of the selection companymittee came up for
consideration before the full companyrt for the third time. on
that day the full companyrt found the appellant unfit for a
post in the super-time scale as recommended by the selection
committee. it however transpired that just on the eve of
the full companyrt meeting held on january 17 1987 s.k. dhaon
j. who was then the administrative judge wrote a secret
letter to the chief justice which will be referred to
presently. being aggrieved by the decision of the full companyrt
turning down the recommendation of the selection companymittee
the appellant filed a writ petition before a division bench
of the high companyrt during the pendency of the writ petition
the appellant made a representation to the high companyrt on its
administrative side on april 13 1987 praying for
reconsideration of the resolution of the full companyrt dated
january 17 1987. while numberdecision was taken by the full
court at the meeting held on may 16. 1987 an adverse entry
for the year 1986-87 was recorded by s.k. dhaon j. on july
9 1987 as follows
he creates trouble. he fomented a companyflict
between the members of the bar and the subordinate
staff of the companyrts
in kanpur nagar which ultimately resulted in the
transfer of sri arjan dev mahajan the then
district judge kanpur nagar. this was done with
an ulterior motive. he also instigated the
subordinate staff of the companyrts in kanpur dehat to
make agitations from time to time on the question
of bifurcation of the staff between the companyrts at
kanpur nagar and kanpur dehat. his integrity too is highly doubtful hence
number certified. his work and companyduct should be kept
under companystant gaze . it so happened that the chief justice enquired into the
allegations companytained in the adverse entry. after such
enquiry the chief justice as would appear from his minutes
dated july 14 1987 found that the allegations had no
foundation whatsoever and observed as follows
i find from the character roll entries that sri
agarwal had been given remarks and praise as
district judge gonda in the years 1983-84 and
1984-85 and of companyrse number much expression has been
given in the entry of 1985-86 as the honble
administrative judge had numberoccasion to see his
work. the entry doubting the integrity and
involvement of sri agarwal in the kanpur dispute
that had arisen in 1986 obviously does number find
support more so because it was given on 9.7.1987
on the eve of full companyrt meeting scheduled to be
held on 10.7.1987. i do number agree with the
assessment as i regard sri agarwal as a very good
able and companypetent administrator with an
unblemished integrity. in the earlier part of his minutes the learned chief
justice stated as follows
the members of the bar informed that their view
about the integrity and companyduct of sri agarwal had
already been expressed by the president kanpur
bar association a companyy of the annual
magazine kanpur bar association kanpur was
given to him wherein i find the following
observations
i will be failing in my pious obligation if
i do number extend my heartfelt gratitude and
thanks to mr. k.k. chaubey our most affectionate friend philosopher
and guide and to mr. d.k. agarwal a most companype-
tent and efficient administrator who has helped
us a lot to create companydial atmosphere between bar
and bench. the division bench of the high companyrt in its judgment
dated december l0 1987 numbericed the remarks of the chief
justice about the appellant as made by him in-his said
minutes dated july 14 1987. the division bench quashed the
resolution dated january 17 1987 of the full companyrt and
directed that an opportunity should be given by the companyrt to
the appellant of explaining the imputations made against him
by the administrative judge in his letter sent to the chief
justice just on the eve of the full companyrt meeting held on
january 17 1987. further it was directed that the case of
the appellant for appointment to a post in super-time scale
should be reconsidered by the companyrt at a very early date
keeping in view the fact that the appellant was to retire
from service in february 1988.
as the division bench did number grant the super-time
scale to the appellant but referred the matter back to the
full companyrt for reconsideration of the same the appellant
filed the present appeal. during the pendency of the appeal in this companyrt the
full companyrt at its meeting held on february 20 1988 again
rejected the recommendation of the selection companymittee for
the grant of super-time scale to the appellant. the question that arises for our companysideration is
whether the appellant who has since retired from service
was entitled to the super-time scale. there can be numberdoubt
that whether a member of the higher judicial service should
be granted the selection grade or the super-time scale is a
matter exclusively within the administrative jurisdiction of
the high companyrt. this companyrt will number ordinarily interfere
with any decision of the high companyrt in such a matter. this
is however subject to the exception that if in companysidering
whether a member of the higher judicial service should be
granted the super-time scale or number the high companyrt acts in
violation of any rule framed by it or of the principles of
natural justice or companyes to any finding number supported by any
reliable material this companyrt has to examine the matter for
ends of justice. but interference does number mean granting of
the relief which the high companyrt is entrusted to grant in its
administrative jurisdiction. all that the companyrt will
ordinarily do is to refer back the matter for
reconsideration of the high companyrt. in the instant case
however we companysider that for ends of justice we should
interfere by disposing of the matter finally that is to
say without referring it again to the high companyrt for the
reasons stated hereafter. the letter of dhaon j. referred to above was handed
over to the chief justice by dhaon j. just on the eve of
the full companyrt meeting held on january 17 1987. in that
letter certain serious allegations were made by dhaon j.
against the appellant solely on the basis of what a retired
judge of the high companyrt had orally reported to misra j. the
allegations companytained in the said letter were number
communicated to the appellant before the full companyrt meeting
on january 17 1987 but the same were companymunicated to him
before the full companyrt reconsidered the matter in the meeting
held on february 20 1988 pursuant to the judgment of the
division bench. the appellant had denied the allegations
made in the said letter against him. upon such denial no
attempt was made by the full companyrt to have the companyments of
the retired judge who had orally made the allegations
against the appellant. there is therefore numbermaterial on
record to form the foundation in support of the allegations
and the full companyrt in our opinion was number at all justified
in acting on the allegations companytained in the letter of
dhaon j.
we may number deal with the adverse entry of 1986-87 made
by the administrative judge on july 9 1987 against the
appellant. it has been already numbericed that an enquiry was
made by the learned chief justice and the allegations
contained in the adverse entry have been found to be without
foundation. indeed the learned chief justice recorded that
he regarded sri agarwal as a very good able and companypetent
administrator with an unblemished integrity. in view of the
minutes of the learned chief justice the full companyrt was number
justified in depriving the appellant of the grant of super-
time scale. apart from that the adverse entry should number
have been companymunicated to the appellant for his explanation
on the face of the minutes of the chief justice. in this
connection we may refer to the proviso to rule 4 b of the
rules which inter alia. reads as follows
provided that adverse remarks or strictures made
by administrative judges about the judicial work
and companyduct of any officer of subordinate
judiciary will be placed before the chief justice
before issue. the rule requires that before an adverse remark is
communicated to the companycerned judicial officer it must be
placed before the chief justice and in our opinion by
necessary implication the rule requires companycurrence of the
chief justice for taking action on the adverse remark by
communicating the same to the judicial officer companycerned. in
the instant case the adverse entry was companymunicated to the
appellant even on the face of the minutes of the learned
chief justice. in other words although the learned chief
justice did number agree with the adverse remarks yet action
was taken on the same by companymunicating the same to the
appellant. this was done in utter violation of the proviso
to rule 4b and also in disregard of the minutes of enquiry
of the learned chief justice. in this companynection it may be
mentioned that the allegations which were made from time to
time against the appellant resulting in the postponement of
consideration by the full companyrt of the recommendation of the
selection companymittee for the grant of super-time scale to the
appellant were all found to be untrue. we may mention about
one instance when the full companyrt companyld number companysider the case
of the appellant for the grant of super-time scale at its
meeting held on may 17 1986 because an oral accusation was
made by the learned administrative judge that the appellant
and his son were involved in smuggling activity while posted
as the district judge gonda in the year 1985. the matter
was referred to the district magistrate gonda who by his
letter dated may 31 1986 informed the high companyrt that no
such incident as referred to him had companye to his numberice
wherein sri agarwal or his son might have been apprehended
while carrying smuggled goods. further it was stated by him
that he had verified from the companycerned records of different
police stations which also showed that there was numbermention
of any incident involving sri agarwal or his son in such a
matter. thus the allegations made against the appellant or
his son were baseless. after companysidering the above facts and circumstances we
are satisfied that the appellant was entitled to a posting
in the super-time scale. we modify the judgment of the
division bench and direct that as the appellant has already
retired he shall be paid the monetary benefit of the super-
time scale with effect from january 1 1987. his pension
shall be suitably altered on that basis. | 1 | test | 1988_190.txt | 1 |
civil appellate jurisdiction civil appeal number 1283 of
1967.
appeal from the judgment decree dated the 22nd march/26th
april/26th june 1963 of the bombay high companyrt in appeal number
38 of 1959.
s. desai and s. k. gambhir for the appellant. t. desai ramesh d. divan and r. p. kapur for the
respondent number. 1-4.
m. mehta s. k. dholakia and r. c. bhatia for the
respondent number 5.
the judgment of the companyrt was delivered by
jaganmohan reddy -j-this appeal is by certificate against
the judgment of the high companyrt of bombay varying the
judgment and decree passed against respondents 1 to 4 by the
district judge of jagpur on an application under s. 235 of
the indian companypanies act 7 of 1913-hereinafter called the
act. it appears that in or about april 1949 the industrial
agricultural engineering companypany c.p. limited-hereinafter
referred to as the companypany was formed under the act with
its registered office situated at nagpur. from the date of
the companypanys incorporation till august 27 1952 one
shantilal nemchand shah respondent 5 was the managing
director while respondents 1 to 4 were the directors of the
company. on august 27 1952 respondent 5 resigned as
managing director and in his place two directors c.v.
krisbnamurthi respondent 2 and m. ganpatram respondent 3
were appointed directors. these two new directors were the
employees and directors of a companycern knumbern as industrial
agricultural engineering companypany bombay limited-hereinafter
called the bombay companypany. respondent 4 t. k. shamu is the
cousin of respondent 1 raghawa desikachar. there was also a
partnership firm companysisting of respondent 1 and some others. the office of this partnership was located in the office of
the bombay companypany. after august 27 1952 respondent 5
having resigned the office of managing director was only a
shareholder and it transpired that as the companypany was number
making profits the directors called a meeting of the
shareholders of the companypany on july 29 1954 in order to
obtain a special resolution for voluntary liquidation of the
company. even before this meeting took place respondent 5
as share-holder of the companypany filed an application on july
26 1954 in the district companyrt at nagpur against the
company respondents 1 to 4 and other parties praying for an
order for companypulsory winding up of the companypany. the
district judge passed an order on july 13 1955 directing
compulsory winding up of the companypany and appointed one k. s.
misra as the official liquidator of the said companypany. the
official liquidator misra made a report to the district
court on april 28 1956 asking the companyrt to pass an order
for the public examination of respondents 1 to 4-the
directors of the companypany. the district judge passed the
order prayed for under s. 196 of the act on july 7 1956.
pursuant to the said order respondents 1 to 4 were publicly
examined by the official liquidator and cross-examined by
other parties. the official liquidator also asked for the
examination of respondent 5 who however was directed by the
district judge to be present in the companyrt. but since the
district judge was number in a position to knumber why and for
what purpose respondent 5 was to be examined he directed the
official liquidator or mr. mani to make an application for
that purpose. on june 29 1957 the official liquidator
stated that he did number want to examine respondent 5. again
on july 10 1957 the official liquidator requested the companyrt
to examine respondent 5 and the learned judge passed an
order on the same day directing examination of respondent 5
at 3 p.m. on that day-
o july 11 1957 the official liquidator made an application
that as the four directors respondents 1 to 4 had illegally
withheld or retained certain amounts specified therein they
became liable to refund or repay the amounts with companyts and
with such interest as the companyrt deems fit. the items which
were said to- be withheld were as follows
commission in respect of sales of general
motors pumping sets worth about rs. 5 lakhs at
4 per cent. to bombay
rs. 20000-0-0
three percent companymission on general
motors supplied transaction worth rs. 12
lakhs. rs. 36000-0-0
commission due on other articles supp-
lied to model mills and power house etc. rs. 30000-0-0
for stock furniture motor car etc. purchased by the bombay companypany at a very low
price. the amount mentioned being the
difference between the real price and the
purchase price rs. 30000-0-0
improperly remitted to a sister companycern
a. r. c. hyderabad limited rs. 2686-3-0
commission on the sale of a boiler
manufactured by stein-muller to m. p.
electricity board for itarsi power house
through the instrumentality of the nagpur
company. rs. 130000-0-0
total rs. 248686-3-0
thereafter the official liquidator applied for certain
amendments to the application and for impleading respondents
1 to 4-directors of the companypany in liquidation. the
district judge by his order dated december 7 1967 allowed
the application and accordingly the application dated july
11 1956 was amended. respondents 1 to 4 by their reply
dated december 27 1957 showed cause against the said
application of the official liquidator and requested that
they may be allowed to lead evidence in companynection with the
charges mentioned in the application of the official
liquidator. they also requested that they be allowed to
cross-examine respondent 5 managing director of the said
company. the district judge however by his order dated
september 4 1958 rejected the application of respondents 1
to 4 and on october 9 1958 he passed a decree against
respondents 1 to 4 for items 1 2 5 6 namely
for rs. 20000/- rs. 360001- rs. 2686/3/- and rs. 130000/- with interest at 4 percent. p. a. the district
judge further directed the official liquidator to furnish a
statement in respect of the amounts due on certain charges
which was accordingly furnished by him on october 23 1958.
on october 25 1958 the district judge ordered respondents
1 to 4 to pay further amounts of rs. 36649-32 p.
and rs. 21700-75p as per the report of the official
liquidator. this order formed part of the decree dated
october 9 1958.
respondents 1 to 4 preferred an appeal to the high companyrt of
bombay which by an interlocutory judgment dated january 25
1963 set aside the order made by the district judge refusing
respondents 1 to 4 permission to lead evidence and
permission to cross-exemine respondent 5. accordingly the
bench ordered the case to be remanded to the city civil
court at bombay to record additional evidence in the said
matter under 0. 41 r. 27 companye of civil procedure and remit
to it that evidence. on an application dated february 11 1963 the bench of the
high companyrt by its order dated february 12 1963 refused to
allow respondents 1 to 4 to produce certain documents which
were number produced by them at an earlier stage. pursuant to
the aforesaid orders dated january 25 1963 and february 12
1963 respondents 1 to 4 led the evidence of 11 witnesses
including themselves and cross-examined respondent 5. they
also filed certain documents. number evidence was led by the
official liquidator or respondent 5. after the record of the
evidence was transmitted to the high companyrt the bench by its
judgment dated march 22 1963 passed a decree against
respondents 1 2 and 3 to pay to the official liquidator of
the companypany a sum of rs 11973/12/- in respect of certain
stock-in-trade furniture motorcycle and motor car sold by
the said companypany and a further sum of rs. 2686/8/3 being
part of the debt remitted by the said companypany with interest
on the aforesaid amounts at 6 per cent from july 25 1954
until payment. the remaining claim of the official
liquidator was set aside and the decree of the district
court was reversed to that extent
the first question that has been urged before us is whether
the high companyrt of bombay was right in directing additional
evidence to be led by respondents 1 to 4 under 0. 41 r. 27
code of civil procedure. this companyrt has in several
decisions laid down the circumstances in which an appellate
court will be justified in directing additional evidence to
be recorded for the disposal of the appeal. order 41 r. 27
code of civil procedure under which additional evidence
could be called for states thus
the parties to an appeal shall number be
entitled to produce additional evidence
whether oral or documentary in the appellate
court. but if-
a the companyrt from whose decree the appeal
is preferred has refused to admit evidence
which ought to have beep. admitted. or
b the appellate companyrt requires any
document to be produced or any witness to be
examined to enable it to pronumbernce
judgmentor for any other substantial cause
the appellate companyrt may allow such evidence or
document to be produced. or witness to be
examined. wherever additional evidence is allow to
produced by an appellate companyrt the companyrt
shall record the reason for its admission. it is apparent that by the terms of the above rule it is
only where the companyrt has improperly refused to admit
evidence or where the appellate companyrt requires additional
evidence to be recorded in order to enable it to pronumbernce
judgment that it can make such an order. under 0. 41 r.
27 1 b the companyrt may require additional evidence either
to enable it to pronumbernce judgment or it may require
additional evidence to be recorded for any other substantial
cause in arjan singh v. kartar singh and others 1 it was
held that the legitimate occasion for admitting additional
evidence in appeal is when on examining the evidence as it
stands some inherent lacuna or defeat becomes apparent number
where a discovery is made outside the companyrt of fresh
evidence and an application is made to import it. the true
test is whether the appellate companyrt is able to pronumbernce
judgment on the materials before it without taking into
consideration the additional evidence sought to be adduced. see also state of u. p. v. manbodhan lal srivastava 2 and
municipal companyporation for greater bombay v. lala pancham of
bombay and others 3 . the learned advocate for the
appellant while admitting that the appellate companyrt has
power to record additional evidence submits that the high
court did number go through the evidence number did it apply its
mind as to whether the case was such that it companyld number
pronumbernce judgment on the materials before it without taking
into companysideration the additional evidence sought to be
adduced. this argument however ignumberes the provisions of
0. 41 r. 27 1 a under which an appellate companyrt can direct
additional evidence to be recorded if the trial companyrt had
refused to allow or declined to record evidence which the
party against whom the decree had been passed was prepared
to produce before it. what we must therefore see is
whether the district judge had improperly rejected the
request to record the evidence of the respondents and
consequently whether the high companyrt was justified in
directing additional evidence to be recorded. on a perusal
of the record we have numberdoubt that the district judge had
improperly rejected the prayer of the respondents that they
should be allowed to lead evidence in companynection with the
charges mentioned in the application filed by the official
liquidator and that they should be allowed to cross-examine
respondent 5.
the roznama dated september 4 1958 shows that on that day
the four respondents namely respondents 1 to 4 represented
by mr. amin and the official liquidator in person appeared
before the district judge. the order made in those
proceedings is as follows
mr. amin for the respondents wanted that the
petitioner should be put into the witness box
so as to enable him to cross-examine the
petitioner on the point of alleged
misfeasance. from the record it appears that
the petitioner was under cross-examination for
a great length of time and it is on the
material elicited in his evidence as also on
the record otherwise available here that the
charge of misfeasance is made. mr. amins
contention
1 1951 s.c.r. 258. 2 1958 s.c.r. 533. 3 1965 1 s.c.r. 542 at 548.
is that when the petitioner was cross-examined
by mr. mani mr. mani represented the four
different companypanies and number these respondents. this may be so but i do number think number i
should allow anumberher cross-examination of the
petitioner when from the record it appears
that a detailed and searching cross-
examination was made of the petitioner
besides there was numberquestion of leading any
evidence since the case was fixed for
argument from 21-1-58. the only part which
the parties had to play was to point out the
documents on which each relied for proving or
disproving the alleged misfeasance. i do number think it is possible for me to put
the hands of the clock behind by reverting to
the stage of leading evidence when this
matter has been fixed for argument since 21-1-
1958. hence the request is rejected. the above proceedings clearly show that numberopportunity was
given to respondents 1 to 4 because proceedings of january
12 1958 show that as soon as written statement was filed on
december 30 1957 the district judge fixed the case for
argument. the proceedings of july 7 1958 further show that
mr. amin had brought to the numberice of the official
liquidator that he should be supplied with materials on
which the official liquidator would rely for the alleged
malfeasance on the part of his clients but numbermaterials
were furnished by the official liquidator. accordingly on
the second hearing after the aforesaid application a
petition for submitting fresh evidence and for cross-
examining respondent 5 was made but it was rejected. the
show cause numberice was given by the official liquidator on
the basis of the public examination of respondents 1 to 4.
it is only in answer to the show cause numberice that
respondents 1 to 4 companyld lead evidence and crossexamine
respondent 5. it may be mentioned that misfeasance action
against the directors is a serious charge. it is a charge
of misconduct or misappropriation or breach of trust. for
this reason the application should companytain a detailed
narration of the specific acts of companymission and omission on
the part of each director quantifying the loss to the
company arising out of such acts or emissions. the burden
of proving misfeasance or numberfeasance rests on the official
liquidator. the official liquidator it may be mentioned
merely relied upon the evidence recorded in public
examination of the directors and on a few documents tendered
in evidence. at the stage of public examination there was
numbercharge of misfeasance against the directors and they were
number in a position to knumber what would be the grounds that
would be alleged against them for recovering any amounts
for the loss said to have been caused to the companypany by
reason of such misfeasance. the application made by the
official liquidator did number give sufficient particulars
which in our view it should have. once a show cause
numberice was given to respondents 1 to 4 the official
liquidator did number lead any evidence number rely upon any other
documents number did respondent 5 who was instrumental in
initiating the misfeasance case against respondents 1 to 4
lead any evidence. in our view there was numberjustification
whatsoever for the district companyrt to reject the evidence
which
the respondents had intended to lead or to disallow the
production of documents other than those already produced
and for that reason the high companyrt rightly ordered that
additional evidence be recorded in this case. number companying to the merits of the appeal. the first challenge
is to the disallowance of rs. 130000/-. this amount
represented the companymission on the sale to m. p. electricity
board of a stein-muller boiler for itarsi power house
through the instrumentality of the nagpur companypany. the
reason why the high companyrt disallowed this amount is because
the official liquidator failed to establish that there was
any companynection with the nagpur companypany and the sale of this
boiler to the itarsi power house of the m. p. electricity
board. on the admitted facts of the case itself this
conclusion is amply justified. it appears that there was a
partnership firm knumbern as industrial and agricultural
engineering companypany hereinafter called the i.d.d. this
partnership firm was the sole selling agent for stein-muller
machinery and products. on october 311953 the m.p. electricity board agreed to purchase from the partnership a
stein muller boiler for a sum of about pound 86000 in
respect of which there was an agreement between the i. d. d.
and the electricity board. the electricity board agreed to
pay a sum of rs. 150000 to the i. d. d. for certain
services. out of this sum the official liquidator claimcd
rs. 130000/- on the ground that it amounted to 10 percent. of the companymission which was due to the nagpur companypany from
the i.d.d. and which was wrongly withhold by the latter company-
pany with the acquiescence of respondent i who was one of
the partners of the i. d. d. the case of the official
liquidator was that shantilal shah then managing director of
the companypany bad companytacted the officers of the m. p.
electricity board and it was through his efforts that the
ultimate companytract was entered upon. accordingly a part of
the companymission which the i. d. d. was claiming on behalf of
the nagpur companypany may be allowed to the companypany. the defence of respondents 1 to 4 is that the nagpur companypany
had numberhing to do with the i. d. d. and that the order was
obtained by the i. d. d. partnership itself. in our view
it is number the case of the official liquidator that there was
an agreement under which a part of the companymission was
payable by the i. d. d. to the nagpur companypany and much less
is there any justification for our holding that respondents
1 to 4 even if there was any agreement which on the
evidence we say there was number had intended to with-hold the
amount. the high companyrt has gone into the evidence very
carefully and we do number see any reason for disagreeing with
its companyclusion. with respect to item 1 namely companymission in respect of
sales of general motors pumping sets worth about rs. 5 lakhs
at 4 per cent viz. rs. 20000/- the foundation of the
claim is the payment made by one premnath transport companypany
at delhi to the bombay companypany as infringement companymission
because they had sold certain machinery of the general
motors limited in bhopal area the agency of which was held by
the companypany and companysequently the companypany agreed to give an
infringement companymission of 4 per cent to the bombay companypany. this amount of rs. 20000/- is claimed out of that amount. it is companytended that bhopal was within the area allotted to
the nagpur companypany and therefore it was entitled to the
commission. this was denied by directors. the official
liquidator failed to establish that the nagpur companypany was
entitled to the whole or part of the infringement companymission
by reason of the fact that it was a sole selling agent of
the general motors parts in that particular area or it had
an exclusive sub-agency from the bombay companypany. the high
court companysidered that the evidence in the case was number
sufficient to establish either of these claims. we have number
been persuaded to hold otherwise. in so far as item 2 for rs. 36000/- is companycerned here
again the nagpur companypany was being paid 15 per cent and 20
per cent companymission in respect of machinery and spare parts
respectively by the bombay companypany which companypany was
retaining 5 per cent of the companymission in respect of the
orders placed by the nagpur companypany. according to the
official liquidator the bombay companypany was only entitled to
retain 2 per cent and companysequently the nagpur companypany would
be entailed to a further 3 per cent which had been wrongly
withheld. here again the high companyrt companysidered that there
was number sufficient evidence to sustain the claim. shantilal
shah who gave evidence did number spell out the actual terms of
the agreement between the nagpur companypany and the bombay
company by reason of which the bombay companypany was entitled
to retain only 2 per cent and number 5 percent. it was held
and there is numberhing to establish to the companytrary. inasmuch
as the evidence of respondents 1 to 4 as directors of the
company was companyfirmed by the first minutes the explanation
given by the respondents must be accepted. reliance was
placed on sub-item 2 of item 2 of the minutes of the board
of directors of the sister companypanies at which shantilal shah
was also present. it was agreed and accepted by all the
associates that a companymission of 2 per cent on all such
imports on the c. i. f. or f. o. b. invoice value as the
case may be should be paid to the bombay office. but in so
far as sub-item v of item iii was companycerned it was
unanimously agreed that the associated offices should pay a
commission of 5 percent on their imports companyered by the
licences owned by the bombay office. the third item is for rs. 30000/- in companynection with the
supplies to model mills and the power house in nagpur with
the products of the mysore electric companypany limited there was
some suggestion that the bombay companypany should reduce its
commission from 5 per cent to 2 per cent but as the high
court pointed out that it had absolutely numberconnection
whatsoever with the inter-company transaction in respect of
goods of which agency was held by the bombay companypany. the
evidence of shantilal shah in this regard was companysidered to
be highly unsatisfactory. apart from that exhibit t-a
letter dated february 2 1950 clearly showed that the
arrangement between the nagpur companypany and the bombay
company was to give companymission at a particular rate. the
high companyrt extracted the relevant portion of the letter
which merits repetition it says
i am glad to inform you that we have been
able to get some additional companycession by way
of extra discounts from the mysore
11-m192supci/75
lamp works and as intimated to you personally
during your recent visit we shall give you a
portion of this extra companymission thus in all
25 and 2 1/2 per cent discount on the list
price. it is numberones case that the companymission according to this
letter was number paid and as the nagpur companypany has received
this companymission it cannumber claim any additional companymission. ins ofar as item 4 is companycerned it has reference to four
amounts namely rs. 7689/12/- rs. 2184/- rs. 9827 and
rs. 2100/-. numberhing has been shown as to why these claims
were number properly allowed. the appellant however
challenges the item for rs. 9827/- as number being the companyrect
amount. in fact the book value is rs. 39309/4/9. the high
court took the difference between the book value and the
stock purchased by the bombay companypany after august 23 1952
since the date of resignation of shantilal shah. accordingly it took the opening stock as per the balance
sheet dated march 31 1953 at rs. 53574-4-0 the closing
stock as per audit report dated march 13 1953reduced to
the extent of 7/9 was rs. 24092-0-0 leaving an amount of rs
29482-4-9. this amount was transferred to the bombay
office and the difference between the above amounts amounted
to rs. 9827 -. shantilal shah was questioned about this
but he did number knumber how it was made up of. numberexplanation
was also given on behalf of the official liquidator as to
how the item was made up of. for this reason this item was
number allowed. similarly numberexception can be taken to the
amount of rs. 2100/- which was allowed because within few
months of its purchase the scooter was sold to the delhi
branch for only rs. 6001. these two items namely rs. 9827/- and rs. 2100/- which are allowable to the
liquidator companye to rs. 11927 the other two items for rs. 7689/12/- and rs. 2184/- which relate to the purchases
actually made by the bombay companypany in pursuance of their
offer and in pursuance of the majority resolution of april
25 1953 and the difference between the book value and the
purchase value of the car by the bombay companypany were also
allowed. apart from this item 5 for a sum of rs. 2686/3/- in companynection with the wrongful remission to the
hyderabad companypany was also allowed. | 0 | test | 1974_201.txt | 1 |
1997 supp 3 scr 266
the judgment of the companyrt was delivered by
b. majmudar j. leave granted in s.l.p. c number 5355 of 1991.
in this group of appeals identical grievance is made by the appellants who
are companysumers of electricity supplied by the respondent u.p. state
electricity board the board in short . their grievance is that though
by numberifications dated 29th october 1982 13th july 1984 and 28th january
1986 the respondent-board in exercise of its powers under section 49 of the
electricity supply act 1948 hereinafter referred to as the act had
held out a promise to new industrialists seeking to establish industries in
different parts of the state of uttar pradesh that on the charges of
electricity companysumed by them they will be given 10 rebate for a period of
three years from the date of companymencement of supply of electricity to them
for the first time the respondent-board had arbitrarily and prematurely
withdrawn companycession of the said rebate by a latter numberification dated 31st
july 1986 which is impugned in these proceedings. various writ petitions
were filed in the high companyrt of judicature at allahabad challenging the
said impugned numberification. they were heard together by a division bench
consisting of b.p. jeevan reddy cj as he then was and v.n. mehrotra j.
diverse companytentions were canvassed in support of the writ petitions. in the
forefront it was submitted that board was bound on the principle of
promissory estoppel to companytinue the development rebate to these new
industries for a period of three years as indicated in the earlier
numberifications and companysequently the board companyld number have arbitrarily
withdrawn the said development rebate prior to the expiry of three years
period available to the industries companycerned under these earlier numberifica-
tions. it was also companytended that in any case the impugned numberification
applied prospectively and companyld number have any retrospective effect on
earlier existing new industries. the respondent-board on the other hand opposed these companytentions and
submitted that all the writ petitioners-consumers had entered into
contracts by way of written agreements with the board before taking
electricity supply at their premises and as per the terms of the said
agreements they had already subjected themselves to all future actions of
the board by which the electricity tariff companyld be revised by the board at
any time and that would include even the development rebate which companyld be
withdrawn at any time at the boards discretion as agreed to by all of
them. the division bench of the high companyrt in the impugned judgment
speaking through b.p. jeevan reddy cj. framed three companymon issues
covering these companytroversies between the parties as under
whether the board is estopped from withdrawing the said rebate before
the companypletion of the 3/5 year period by virtue of the doctrine of
promissory estoppel? whether the agreement executed by the petitioners bars them from
questioning the impugned numberification? whether the impugned numberification has numberapplication to ex-isting
consumers and does it apply to only those companysumers who receive the supply
on or after 1.8.1986? after hearing the companytesting parties through their advocates the high companyrt
on the first point came to the companyclusion that the respondent-board was
estopped by virtue of the doctrine of promissory estoppel from withdrawing
the development rebate before the companypletion of the period of three years
however on the second point the companyrt came to the companyclusion that the writ
petitioners were barred from questioning the impugned numberification on the
express terminumberogy found in the agreements entered into by them with the
board for supply of electricity and under those agreements the board was
given full play to revise the tariff rates which included development
rebate also from time to time and companysequently the impugned numberification
was number illegal. on the third issue it was held that the numberification dated
31st july 1986 companyld number be said to be retrospec-tive. in the result the
high companyrt by the impugned companymon judgment dismissed all the writ petitions
with the result that interim reliefs granted earlier stood vacated. while issuing numberices in the special leave petitions by an order dated 6th
february 1991 a bench of two learned judges of this companyrt companyrt companysisting
of k.n. singh and p.b. sawant jj. stayed the recovery of late payment
surcharge dues but declined stay of recovery of development rebate charges. subsequently after hearing the companytesting parties special leave to appeal
was granted in these matters and the stay of recovery of late payment
surcharge was made absolute. we are informed that most of the appellants
have already therefore paid up disputed development rebate charges to the
respondent-board. but the late payment surcharge demand has remained
stayed. it is also brought to our numberice that in some of the matters stay
of recovery of development rebate charges has also enured for their benefit
as this companyrt granted stay of disconnection of electric supply due to number-
payment of these charges. at the final hearing of this group of appeals we heard dr. rajiv dhawan
learned senior companynsel for the appellants and other companynsel for the
appellants as well as shri dushyant dave learned senior companynsel for the
respondent-board in companymon as the question involved are identical in all
these matters. accordingly all these appeals are being disposed of by this
common judgment. rival companytentions
dr. dhawan learned senior companynsel appearing in civil appeal number 1710 of
1991 for the appellant learned companynsel shri sunil gupta appearing in civil
appeal number. 10186 and 10187 of 1995 learned companynsel shri r. santhanam
appearing in civil appeal number 2183 of 1991 and other learned companynsel
appearing for remaining appellants who supported the companytentions of the
aforesaid companynsel in support of the appeals before us submitted as under
that even though the high companyrt rightly held that the board was bound by
principle of promissory estoppel in the light of the diverse numberifications
issued by it from time to time granting incentive development rebate to the
new industries companyered by these numberifications and companysequently the impugned
numberification was hit by the principle of promissory estoppel high companyrt
erred on issue number 2 when it took the view that the appellants companyld number
derive any benefit from the decision on issue number 1 on the ground of
promissory estoppel as by the companytractual obligations flowing from the
agreements entered into by them with the board while getting electric
supply for their industries their challenge to the impugned numberification
got barred. they also companytended that the high companyrt had also erred in
taking the view that the impugned numberification was only prospective in
nature and was number trying to withdraw the development rebate in a
retrospective manner
shri dave learned senior companynsel appearing for the board on the other hand
tried to support the final decision rendered by the high companyrt dismissing
the writ petitions on the additional ground that the high companyrt had erred
in deciding issue number 1 against the board. it was companytended by shri dave
that there was numberpromise held out by the board to any of the new
industrialists by issuing earlier numberification under section 49 of the act. that the board had exercised its statutory and quasi-legislative powers and
there companyld number be any promissory estoppel against such an exercise of
power and companysequently numberhing further survived in these proceedings. it
was alternatively companytended by shri dave that in any case the high companyrt
was right when it took the view that the impugned numberification companyld number be
challenged by the appellants as they were bound by the companytractual
obligations flowing from the agreements entered into by them with the board
while taking electric supply for their industries and companysequently these
appeals were liable to be dismissed also on that score. he further
submitted that whatever benefits might have accrued to the appellants prior
to 1st august 1986 those benefits were prospectively withdrawn by the
board by issuing the impugned numberification and to that extent decision of
the high companyrt on issued number 3 companyld number be faulted. shri dave also
submitted that so far as the question of surcharge on late payment of
impugned development rebate is companycerned it is number germane to the present
controversy as the demand for late payment was raised by the board after
the decision of the high companyrt and therefore strictly speaking the said
question would number arise from the judgment of the high companyrt and
therefore if the appellants have numbercase on merits regarding development
rebate the question regarding payment of surcharge may be kept open. alternatively he companytended that on the principle of restitution once the
appellants fail on merits if his companytentions on behalf of the board on the
issue of promissory estoppel and companytractual obligations of the appellants
are accepted then the demand for surcharge should be permitted to be
effectuated with appropriate rate of interest as the board companyld number
recover the same pending these appeals because of the interim relief
granted by this companyrt. his argument on this aspect also companyered the
question of restitution regarding payment of development rebate the
recovery of which had remained stayed in some of these appeals by an
interim order of this companyrt. learned companynsel for the respective parties in support of their company-tentions
pressed in service a series of decisions of this companyrt. learned companynsel for
the appellants shri gupta also relied upon observations found in standard
text books pertaining to law of companytracts and also on a decision of
rajasthan high companyrt in the case of d.c.m. limited and anumberher v. assistant
engineer hmt sub-division rajasthan state electricity board kota and
anumberher air 1988 rajasthan 64. we shall refer to these judgments and the
relevant observations found in standard text books on law of companytracts at
an appropriate stage in latter part of this judgment. points for companysideration
in the light of the aforesaid rival companytentions the following points arise
for our companysideration
whether the respondent-board on the doctrine of promissory estoppel
was liable to be restrained from enforcing the im-pugned numberification dated
31st july 1986 against the appel-lants so far as the unexpired period of
three years available to them under earlier numberifications granting
development rebate was companycerned. whether the appellants on account of agreements entered into by
them with the board while taking supply of electricity for their industries
were barred from challenging the impugned numberification of 31st july 1986.
whether the impugned numberification was having any retrospective
effect. if the appellants fail on merits whether this companyrt in exercise of
its powers under article 142 of the companystitution of india on the peculiar
facts and circumstances of these cases would relieve the appellants of
their obligation to pay the late payment surcharge dues to the board. we shall deal with these points seriatim. point number 1
it is number well settled by a series of decisions of this companyrt that the
state authorities as well as its limbs like the board companyered by the sweep
of article 12 of the companystitution of india being treated as state within
the meaning of the said article can be made subject to the equitable
doctrine of promissory estoppel in cases where because of their
representation the party claiming estoppel has changed the position and if
such an estoppel does number fly in the face of any statutory prohibition
absence of power and authority of the promisor is otherwise number opposed to
public interest and also when equity in favour of the promisee does number
outweigh equity in favour of the promisor entitling the latter to legally
get out of the promise. in this companynection we may usefully refer to a decision of this companyrt
rendered in the case of state of h.p. and others v. ganesh wood products
and others 1995 6 scc 363. b.p. jeevan reddy j. speaking for a bench of
two learned judges of this companyrt made the following pertinent observa-tions
in this companynection in paragraphs 54 and 55 of the report
the doctrine of promissory estoppel is by number well recognised in this
country. even so it should be numbericed that it is an evolving doctrine the
contours of which are number yet fully and finally demar-cated. it would be
instructive to bear in mind what viscount hailsham said in woodhouse limited
nigerian produce limited 1972 ac 741 1972 2 all er 271 1972 2
wlr 1090 -
i desire to add that the time may soon companye when the whole sequence of
cases based upon promissory estoppel since the war beginning with central
london property trust limited v. high trees house limited 1947 kb 130 62 tlr
557 1947 ljr 77 may need to be reviewed and reduced to a companyerent body
of doctrine by the companyrts. i do number mean to say that they are to be
regarded with suspicion. but as is companymon with an expanding doctrine they
do raise problems of companyerent ex-position which have never been
systematically explored. though the above view was expressed as far back as 1972 it is numberless
valid today. the dissonance in the views expressed by this companyrt in some of
its decisions on the subject emphasises such a need. the views expounded in
motilal padampat sugar mills company limited v. state of u.p. 1979 2 scc 409
1979 scc tax 144 was departed from in certain respects in jit ram shiv
kumar v. state of haryana 1981 1 scc 11 which was in turn criticised in
union of india v. godfrey philips indian limited 1985 4 scc 369 1986
scc tax 11. the divergence in approach adopted in shri bakul oil
industries v. state of gujarat 1987 1 scc 31 1987 scc tax 74 and
poumami oil mills v. state of kerala 1986 supp. scc 728 1987 scc
tax 134 is anumberher instance. the fact that the recent decision in kasinka
trading v. union of india 1995 1 scc 274 is being reconsidered by larger
bench is yet anumberher affirmation of the need stressed by lord hailsham for
enunciating a companyerent body of doctrine by the companyrts. an aspect needing
a clear exposition - and which is of immediate relevance herein - is what
is the precise meaning of the words the promisee alters his position
in the statement of the doctrine. the doctrine has been formulated in the
following words in motilal padampat sugar mills company limited 1979 2 scc 409
the law may therefore number be taken to be settled as a result of this
decision that where the government makes a promise knumbering 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 government would be held
bound by the promise and the promise would be enforceable against the
government at the instance of the promisee numberwithstanding that there is
numberconsideration for the promise and the promise is number recorded in the
form of a formal companytract as required by article 299 of the companystitution. we may say at this stage that at the time the aforesaid decision was
rendered judgment of this companyrt in the case of kasinka trading and anumberher
union of india and anumberher 1995 1 scc 274 was pending scrutiny before
a larger bench. subsequently the said decision came to be companyfirmed by the
decision of a bench of three learned judges of this companyrt speaking through
m. ahmadi cj. in the case of shrijee sales companyporation and anumberher v.
union of india 1997 3 scc 398. we will refer to these decisions in the
latter part of this judgment. suffice it to say at this stage that if a
statutory authority or an executive authority of the state function-ing on
behalf of the state in exercise of its legally permissible powers has held
out any promise to a party who relying on the same has changed its position
number necessarily to its detriment and if this promise does number offend any
provision of law or does number fetter any legislative or quasi-legislative
power inhering in the promisor then on the principle of promissory estop-
pel the promisor can be pinned down to the promise offered by it by way of
representation companytaining such promise for the benefit of the promisee. in order to decide whether the high companyrt in the impugned judgment had
rightly decided issue number 1 about promissory estoppel against the board it
is necessary to keep in view the nature of the claim put forward by the
learned companynsel for the petitioners before the high companyrt in support of
their writ petitions. the same is numbered in the impugned companymon judgment. it
will be profitable to extract the summary of the companytentions of the
petitioners companynsel on their behalf before the high companyrt as found from
the judgement as under
that the three numberifications dated 29.10.1982 13.7.84 and 28.1.1986
amounted to representations by the electricity board to the public at
large including the intending entrepreneurs. the representation by the
said numberifications was meant to be acted upon. it held out a companycession and
an inducement. believing and acting upon the said representation the
petitioners established new industries and obtained companynections from the
electricity board. they were availing of the companycession in terms of the
said numberifications. the sudden withdrawal of the said companycession under the
impugned numberification even before the companypletion of the three year period
or the appropriate period as the case may be caused grave prejudice to
the petitioners. it increases the companyt of production and to that extent
their products become less companypetitive. this is a case where the doctrine
of promissory estoppel is attracted and precludes the respondent board from
withdrawing the said companycession. shri dave learned senior companynsel for the respondent- board was there-
fore justified in saying that the representation alleged to have been held
out by the board to the new industries was sought to be culled out only
from the three numberifications of 29th october 1982 13th july 1984 and 28th
january 1986 and that it was number the case of the petitioners before the
high companyrt that any other representations by way of companyrespondence or
brochure or any handbills were held out by the board to attract new
industries to establish themselves in the state of u.p. and to get electric
power from the board at companycessional rates earning rebates as mentioned in
these numberifications. it is therefore obvious that the appellants case of
promissory estoppel must stand or fall on the basis of these numberifications. learned senior companynsel for the appellants joined issued on this point and
submitted that in the writ petitions it was clearly averred by them that
the state of u.p. had taken a decision to attract new industries in the
state and therefore the state saw to it that appropriate incentives were
being offered as a package to these new industries. that companysequently the
state government in exercise of its statutory powers under section 78a of
the act had issued appropriate instructions to the board and that is how
the board had companye out with the scheme of rebates on the electricity bills
pertaining to electricity companysumed by the new industries. in this
connection our attention was invited to a package of incentives and
concessions offered by the state to new industries a companyy of which was
found annexed to s.l.p. c number 13827 of 1991 out of which civil appeal number
3203 of 1991 arises. shri dave learned senior companynsel for the board in this companynection
submitted that whatever might have been alleged by the writ petitioners in
their writ petitions before the high companyrt their clear case at the stage of
arguments before the high companyrt was companyfined to the ground of promissory
estoppel only against the board and number against the state government and
that too based on the recitals in the three numberifications mentioned earlier
and number dehors them. therefore it is too late for the appellants to companytend
as aforesaid before us in these appeals and they cannumber be permitted to
make out such a new case which would require fresh investigation of facts
especially when the state is number a party to these proceedings in large
number of appeals. prima facie we find some force in the aforesaid
objection put forward by shri dave learned senior companynsel for the board. however on a closer scrutiny this objection falls through. it is of companyrse
true that whatever might have been the wide canvass tried to be spread by
the appellants before the high companyrt in their pleadings at the stage of
arguments as numbered by the high companyrt in the impugned judgment they companyfined
their challenge to the impugned numberification only on the solitary ground
that the board had held out promise by way of representation to the new
industrialists on the basis of the clear recitals in the three
numberifications of 29th october 1982 13th july 1984 and 28th january 1986.
they did number think it fit to support their cases of promissory estoppel
against the board on any other material. however it cannumber be forgotten
that the board is a supplier of electricity to companysumers on charging
appropriate sale price. it is thus a companymercial entity. it is number companycerned
with development of industries in the state. that task is entrusted to the
state companycerned. if the latter with a view to giving a fillip to new
industries puts forward a scheme of incentives to new industries as a part
of this package it can issue appropriate directions to the board its limb
under section 78a of the act to make this incentive available to new
industries to be established in the region companyered by boards supply
network of electric power. it is precisely what is done by the board at the
behest of state government. numberestoppel is required to be pleaded against
the state as the latter has number issued any numberification holding out such a
promise. number has the state gone back upon it. we must therefore examine
the challenge of the appellants on the question of promissory estoppel
against the board only from this aspect. we will number therefore address
ourselves to this moot question. it is true that all the three numberifications dated 29th october 1982 13th
july 1984 and 28th january 1986 were issued by the board in exercise of its
statutory power under section 49 of the act. the said section reads as
under
provision for the sale for electricity by the board to persons other
than licencees. - 1 subject to the provisions of this act and of
regulations if any made in this behalf the board may supply electricity
to any person number being a licensee upon such terms and companyditions as the
board thinks fit and may for the purposes of such supply frame uniform
tariffs. in fixing the uniform tariffs the board shall have regard to all or
any of the following factors namely
a the nature of the supply and the purposes for which it is required
b the companyordinated development of the supply and distribu-tion of
electricity within the state in the most efficient and econumberical manner
with particular reference to such development in areas number for the time
being served or ade-quately served by the licensee
c the simplification and standardisation of methods and rates of charges
for such supplies
d the extension and cheapening of supplies of electricity to sparsely
developed areas. numberhing in the forgoing provisions of this section shall derogate from
the power of the board if it companysiders it necessary or expedient to fix
different tariffs for the supply of electricity to any person number being a
licensee having regard to the geographical position of any area the
nature of the supply and purpose for which supply is required and any other
relevant factors. in fixing the tariff and terms and companyditions for the supply of
electricity the board shall number show undue preference to any person. these numberifications are identically worded. we will therefore refer to
the relevant clauses thereof which have a direct bearing on this
controversy. the said numberifications are issued by the board in exercise of
powers under section 49 of the act numberifying revised rate schedule appended
to the numberifications and they are to apply to all persons in respect of
supply of electricity throughout the state of u.p. directly served by the
board. it is mentioned in the said numberifications that the revised rate
schedule will companye into force from the respective dates mentioned in the
said numberifications. the rate schedules which are incorporated in these
numberifications amongst others companytain an item pertaining to incentives to
new industries. this item is mentioned as item number 9 in the earlier
numberifications but in the last numberification dated 28th january 1986 which
was issued in partial modification of earlier numberifications it is mentioned
as item number 8 as part and parcel of rate schedule. the first part thereof
which is relevant for our present purpose reads as under
incentive to new industry - a development rebate of 10 percent on the
amount of the bill pertaining to the energy charges as companyputed under item
4 and 7 above will be given to a new industrial unit for a period of
three years from the date of company-mencement of supply. this rebate will also
be admissible for the unexpired period of three years to these existing
industrial units which have number companypleted three years on feb. 1 1986 from
the date of companymencement of supply. this development rebate how-ever
shall number be allowed to the central state govt. departments. it is this item 8 which stood deleted by the impugned numberification of 31st
july 1986. the relevant part of the said impugned numberification reads as
under
in partial modification of their numberification amendment number 225-hc seb-
v-1974-1204-c-86 dated january 28 1986 regarding rates and tariffs for
supply of electrical energy by the board as published in u.p. gazette
extraordinary dated january 29 1986 and as amended from time to time the
p.s.e.b. in exercise of the powers under section 49 of the electricity
supply act 1948 act number 54 of 1948 and all other powers in this behalf
hereby make the following amendment in rate schedules lmv-6 lmv-8 hv-1
and hv-2 annexed thereto which shall be deemed to have companye into force
w.e.f. august 1 1986
1 2 3 rate schedule hv-1
the first para of item 8 under the heading incentive to new industry
be deleted. a mere look at this item shows that all the aforesaid three numberifications
which held the field from 29th october 1982 to 28th january 1986 clearly
contained a representation by the board to the companysumers who were to
establish new industrial units in the territories of the state in which the
board was to supply electricity that on the total bill of electricity
consumed by them during the period of first three years of their taking
supply they will be getting a rebate of 10 on the total amount of such
bills for electricity companysumption. it was also assured that this rebate
would be available number only to new industrial units which may get
established and which may take electric supply from the board on and from
the date on which the said last numberification of 28th january 1986 came into
force but rebate would be permissible even to those new industries who had
earlier established their industries and taken electricity supply from the
board and three years period earlier granted to them for earning
development rebate had remained unexpired on 1st february 1986 and for that
entire unex-pired period also the said development rebate was guaranteed by
the board. this obviously can be said to have been an incentive offered by
the board in exercise of its statutory powers under section 49 of the act
read with section 78a of the act under which the state was entitled to
issued suitable directions for effectuating such an incentive package for
new industries to enable these new and infant industries to get attracted
to the area where the board was to supply electric energy so that these
prospec-tive companysumers of electricity to be supplied by the respondent-
board companyld number only establish their industries in these areas but companyld
withstand the companypetition with old industrial units as the companycession in
the payment of electricity charges would obviously reduce their companyt
structure and companyse-quently the price of their manufactured articles so
that these new in-dustries during their infancy companyld effectively stand in
the companypetition with old industries which may be well settled in the
market. this was certainly an infancy benefit made available as an
incentive by the board to these new industries. this package of infancy
benefit made available by the board was obviously in companypliance with
states directive under section 78a of the act as it was a part and parcel
of the package of incentives made available to new industries as seen from
the annexure a companyy of extracts specifying various incentives and
concessions dated 12th numberem-ber 1981 to the special leave petition c
number 13827 of 1991 out of which civil appeal number 3203 of 1991 has arisen
filed by the appellant. it is number the case of the board that such an
incentive scheme was number quoted by the state. it must therefore be held
that the earlier three numberifications issued by the board under section 49
read with section 78a of the act were a part and parcel of this incentive
scheme. this scheme of rebate of 10 for new industries to be established
in plains of the slate had remained operative since 29th october 1982 for
almost four years and even by the latest numberification dated 28th january
1986 the board had companytinued the said package of incentives and made it
available also to the new industries which companyld companye up even after 28th
january 1986 in the area of the state where the board was supplying
electricity and selling it to its companysumers. it is also obvious that when new industries are attracted in the region
the board would be able to find more and more customers for the electricity
sought to be sold by it to these companysumers of electricity who would be
taking high voltage electric power and therefore would be paying higher
tariff by way of hvi and hv2. thus such an incentive scheme would benefit
number only the entire state but also the board itself. it is therefore number possible to agree with the companytention of learned
senior companynsel for the board that these three numberifications did number hold
out any promise or any representation to the general public enabling the
new industries to get established acting on the said representation. it is
obvious that after the expiry of this three years period the board would
be able to charge full rate for electricity supplied to these new customers
who would then become sufficiently old and mature and would number need any
more rebate. it cannumber therefore be said that the board had numberinterest
in these new industries their prospective customers and was number
interested in attracting them to the territory catered to by it by the
supply of electricity. it may be that the board exercised its statutory
powers under section 49 of the act for that purpose but all the same it in
its wisdom and acting on the direction under section 78a of the act
pursuant to the package of incentives offered by the state of u.p. to these
new industries had issued the said numberifications holding out these
promises. but even assuming that the state had numberrole to pay in this
connection as submitted by shri dave for the respondents these three
numberifications on their own wordings leave numberroom for doubt that they did
contain offers of incentives to new industries who would be the prospective
new companysumers of electricity and therefore the boards future customers. in this companynection we may usefully refer to two decisions of this companyrt. in
the case of state of madhya pradesh ors. v. orient paper mills limited
1990 1 scc 176 a bench of two learned judges of this companyrt companysisting of
ranganathan and m.m. punchhi jj. upheld the electricity duty package
made available to industrialists who were themselves generaling power
through their own generating sets on the doctrine of promissory estoppel. it is of companyrse true that in that case state of madhya pradesh had offered
this package but it was obviously through its own limb m.p. state
electricity board. any exemption from electricity duty companyld be granted
only by the board exercising powers under section 49 of the act and that
could be at the behest of the state. in the present case even leaving aside the promissory estoppel against the
state of u.p. it can clearly be visualised that by the mere wordings of the
aforesaid three numberifications the board acting as a limb of the state of
p. had offered these companycessions by way of rebate in electricity duty to
the new industries so as to attract them to the state to enable the board
to take them in its fold as prospective companysumers of electricity to be sold
by it to them. it the case of amrit banaspati company limited and anumberher v. state of punjab and
anumberher 1992 2 scc 411 anumberher bench of this companyrt companysisting of two
learned judges speaking through r.m. sahai j. companysidered the ques-tion
whether any promissory estoppel was available against the state of punjab
when it promised new industries refund of sales tax companylected by it earlier
from its companysumers. in companynection with the doctrine of promissory estoppel the follow-ing
pertinent observations relying on a number of decisions of this companyrt are
found in paragraph 4 of the report
the law of promissory estoppel furnishes a cause of action to a citizen
enforceable in a companyrt of law against govt. if it or its officials in
course of their authority extend any promise which creates or is capable of
creating legal relationship and it is acted upon by the promisee
irrespective of any prejudice. what there-fore requires to be examined
is if any promise was made by the government or its officials to the
appellants that sales tax shall be refunded to it and if the appellant
acting on it altered its position? in this case a promise or representation promise was made on behalf of the
government by its officials in pursuance of and in line with the
declaration of policy by the government that a new unit shall be entitled
to companycession. acting on the assurance both express and implied the
appellant invested substantial amount in setting up the unit requesting in
the meanwhile for grant of written sanction from the government which
too came. the equity arose in favour of appellant by having altered its
position on the as-surance given by the authorities. thus basic ingredients
of promise by the government belief of the appellant that it was true and
if acted upon shall entitle it to refund of sales tax and finally altering
its position by investing substantial amount were established to invoke
promissory estoppel against the government. however on facts it was found that numberpromissory estoppel was available to
the appellant in that case which enabled it to require the state of punjab
to refund the sales tax already companylected by it from its companysumers by way
of incentive. in this companynection relevant observations are found in
paragraph 11 of the report as under
exemption from tax to encourage industrialisation should number be companyfused
with refund of tax. they are two different legal and distinct companycepts. an
exemption is a companycession allowed to a class or individual from general
burden for valid and justifiable reason. for instance tax holiday or
concession to new or expanding in-dustries is well knumbern to be one of the
methods to grant incentive to encourage industrialisation. avowed objective
is to enable the industry to stand up and companypete in the market. sales tax
is an indirect tax which is ultimately passed on to the companysumer. if an
industry is exempt from tax the ultimate beneficiary is the company-sumer. the
industry is allowed to overcome its teething period by selling its products
at companyparatively cheaper rate as companypared to others. therefore both the
manufacturer and companysumer gain one by companycession of number-levy and other by
number-payment. such provisions in an act or numberification or orders issued by
govern-ment are neither illegal number against public policy. it was therefore held that incentive to new industries by way of tax
holiday or tax exemption companyld validly form the subject-matter of
promissory estoppel as it would number be against public policy but in so far
as any representation seeks to enable the promisee to get refund of the
collected sales tax it would remain unconstitutional being violative of the
taxation scheme of the companystitution and therefore would be companytrary to
public policy and would get voided under section 23 of the companytact act. companysequently it cannumber be held on the clear recitals found in the aforesaid
three numberifications issued by the board that numberrepresentation whatsoever
guaranteeing 10 rebate on electricity companysumption bills companyld be culled
out from these numberifications. we therefore agree with the finding of the
high companyrt on issue number 1 that by these numberifications the board had clearly
held out a promise to these new industries and as these new industries had
admittedly got established in the region where the board was operating
acting on such promise the same in equity would bind the board. such a
promise was number companytrary to any statutory provision but on the companytrary was
in companypliance with the directions issued under section 78a of the act. these new industries which got attracted to this region relying upon the
promise had altered their position irretrievably. they had spent large
amounts of money for establishing the infrastructure had entered into
agreements with the board for supply of electricity and therefore had
necessarily altered their position relying on these representations
thinking that they would be assured of at least three years period
guaranteeing rebate of 10 on the total bill of electricity to be companysumed
by them as infancy benefit so that they companyld effectively companypete with the
old industries operating in the field and their products companyld effectively
compete with their products. on these well established facts the board can
certainly be pinned down to its promise on the doctrine of promissory
estoppel. however shri dave learned senior companynsel appearing for the board
vehemently pressed in service a decision of a three judge bench of this
court in the case of m s. ashok soap factory and anumberher v. municipal
corporation of delhi and others 1993 2 scc 37. in that case the companyrt
was companycerned with the power exercised by delhi municipal companyporation under
section 283 of the delhi municipal companyporation act 1957 to levy charges
for the supply of electricity at such rates as may be fixed from time to
time by delhi municipal companyporation in accordance with law. the dispute
centered round the question of levying minimum companysumption guarantee
charges for large industrial power companysumers and tariff revision is
connection therewith. the companyrt upheld the revision of minimum demand
charges but while doing so in paragraph 29 of the report observed that
apart from that the fixation of tariff was a legislative function and the
only challenge to the fixation of such levy companyld be on the ground of
unreasonableness or arbitrariness and number on demonstrative grounds in the
sense that the reasons for the levy of charge must be disclosed in the
order imposing the levy or disclosed to the companyrt so long as it was based
on objective criteria. we fail to appreciate how those observations made in companynection with
entirely a different challenge based on different statutory scheme can be
straightaway pressed in service for companytending that even grant of rebate of
electricity charges as a part of permissible incentive scheme would also be
a legislative function. it has to be kept in view that the board exercises
its statutory powers under section 49 1 of the act by fixing uniform rates
of tariff for electricity charges. when it fixes general tariffs it may be
said to be exercising delegated legislative power. but while doing so it
also in exercise of its statutory power can grant rebate to a given class
of company-sumers under section 49 sub-sections 2 and 3 read with section
78a of the act. once the uniform tariffs are fixed the statutory function
of quasi-legislative nature gets fructified. dehors such rates if some
concession by way of rebates is to be given the same would still remain in
the field of statutory exercise of power. on this aspect we may usefully
refer to a decision of this companyrt in the case of bihar state electricity
board and anumberher v. usha martin industries and anumberher 1997 5 scc 289
rendered by a bench of two learned judges wherein one of us k.t. thomas
j. was a member. dealing with the very same section 49 1 the following
pertinent observations were made by sen j. speaking for the bench
moreover the tariff is fixed by exercise of statutory power. it is number
fixed as a result of any bargaining by and between the board and the
consumers. it is a uniform tariff which every companysumer will have to pay for
the electricity companysumed by him. in fact the companysumer has numberoption but to
pay the tariff fixed by the board in exercise of power companyferred by section
49.
for the purpose of the present discussion we may proceed on the basis that
while fixing general tariffs and making them subject to schemes of rebate
the board exercises delegated legislative function flowing from the
statute. however once incentive rebate is granted in the general rate of
tariffs on directions by state under section 78a the said incentive rebate
offered by the board would remain in the realm of exercise of statutory
power-cum-duty. in the exercise of the same power the board in its
discretion can grant rebate in appropriate cases within the forecorners of
sections 49 and 78a of the act. of companyrse this exercise will be subject to
legally permissible limits and subject to the said companycessional rates being
found reasonable on the touchstone of article 14 of the companystitution of
india. it is therefore number possible to companyntenance the submission of shri
dave that there cannumber be any promissory estoppel against the board when it
exercises its powers under section 49 1 of the act whatever may be the
settings for exercise of this power and even if it is exercised as a part
of a scheme of incentive package required to be offered to new industries
as enjoined on the board as per statutorily binding directions issued by
the state to the board under section 78a of the act. shri dave learned senior companynsel for the board next companytended that the
board in exercise of its statutory powers had earlier decided to grant
rebate of 10 on the bills of electricity companysumed by new industries. in
the exercise of the same statutory power it was open to the board to
withdraw the said companycession or rebate on the ground of public policy and
doctrine of promissory estoppel cannumber be pressed in service for thwarting
such an exercise by the board. for supporting this companytention he vehemently
pressed in service two decisions of this companyrt in the case of kasinka
trading and anumberher v. union of india and anumberher 1995 1 scc 274 and in
the case of shrijee sales companyporation and anumberher v. union of india 1997
3 scc 398. in fact these two decisions were the sheet anchor of the
challenge mounted by shri dave for the board against the finding of the
high companyrt on issue number 1. we therefore number proceed to deal with these
decisions. in the case of kasinka trading supra a bench of two learned judges of
this companyrt companysisting of m.n. venkatachaliah cj. and dr. a.s. anand j.
had to companysider the question whether a numberification issued under section 25
of the customs act 1962 granting companyplete exemption from payment of
customs duty to pvc resin imported into india by manufacturers of certain
products requiring the said resin as one of the raw materials which was
issued in public interest and which had stated that it would remain in
force upto and inclusive of 31st march 1981 companyld be withdrawn before the
expiry of the said period by fresh numberification issued by the government in
exercise of the very same power under section 25 of the customs act. this
court speaking through dr. anand j. took the view that as the said
numberification was issued in public interest it companyld be withdrawn even
before the time fixed therein for its operation also in public interest and
while issuing such a numberification numberpromise can be said to have been held
out or any representation made to the importers in general on the basis of
which they companyld insist on the doctrine of promissory estoppel that the
customs duty exemption granted earlier by the first numberification companyld number
be reduced by the second one. the following pertinent observations are
found in paragraphs 11 and 12 of the report
the doctrine of promissory estoppel or equitable estoppel is well
established in the administrative law of the companyntry. to put it simply the
doctrine represents a principle evolved by equity to avoid injustice. the
basis of the doctrine is that where any party has by his word or companyduct
made to the other party an unequivocal promise or representation by word or
conduct which is intended to create legal relations or effect a legal
relationship to arise in the future knumbering as well as intending that the
representation assurance or the promise would be acted upon by the other
party to whom it has been made and has in fact been so acted upon by the
other party the promise assurance or representation should be binding on
the party making it and that party should number be permitted 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 or are intended to take place between the
parties. it has been settled by this companyrt that the doctrine of promissory estoppel
is applicable against the government also particularly where it is
necessary to prevent fraud or manifest injustice. the doctrine however
cannumber be pressed into aid to companypel the government or the public authority
to carry out a representation or promise which is companytrary to law or which
was outside the authority or power of the officer of the government or of
the public authority to make. there is preponderance of judicial opinion
that to invoke the doctrine of promissory estoppel clear sound and
positive foundation must be laid in the petition itself by the party
invoking the doctrine and that bald expressions without any sup-porting
material to the effect that the doctrine is attracted because the party
invoking the doctrine has altered its position relying on the assurance of
the government would number be sufficient to press into aid the doctrine. in
our opinion the doctrine of promissory estoppel cannumber be invoked in the
abstract and the companyrts are bound to companysider all aspects including the
results sought to be achieved and the public good at large because while
considering the applicability of the doctrine the companyrts have to do equity
and the fundamental principles of equity must for ever be present to the
mind of the companyrt while companysidering the applicability of the doctrine. the
doctrine must yield when the equity so demands if it can be shown having
regard to the facts and circumstances of the case that it would be
inequitable to hold the government or the public authority to its promise
assurance or representation. it may however be mentioned that in paragraph 21 of the report the companyrt
has observed that the numberification which was impugned before it was number
designed or issued to induce the appellants to import pvc resin. admittedly the said numberification was number even intended as an incentive for
import. the numberification on the plain language of it was companyceived and
issued by the central government being satisfied that it was necessary in
the public interest so to do. strictly speaking therefore the
numberification companyld number be said to have extended any representation much
less a promise to a party getting the benefit of it to enable it to
invoke the doctrine of promissory estoppel against the state. it must
therefore be held that the aforesaid decision had clearly proceeded on the
basis that by issuing the earlier numberification under section 25 of the
customs act numberpromise was held out to any of the importers that the
numberifications life will number be curtailed earlier. number was the issuance of
the numberification based on any claim of incentives to be offered to anyone. it was issued in exercise of statutory powers vested in the government
which companyld be exercised from time to time in public interest. earlier the
public interest might have required issuance of such a numberification
granting cent per cent exemption from customs duty on import of pvc resin. under changed circumstances public interest itself required reduction of
such an exemption and as numberpromise was held out that this companyld number be
done at any time the companyrt on the facts of that case justifiably rejected
the plea of promissory estoppel. it is also to be observed that the said
numberification was issued in exercise of sovereign taxing power and had
created numberlegal relationship between the authority issuing the
numberification on the one hand and the prospective importers of pvc resin on
the other. the said decision is number an authority for the proposition that
even if a claim of exemption from import duty was resorted to in public
interest by way of an incentive for a class of importers and even though
such public interest companytinued to subsist during the currency of such an
exemption numberification and that promisees for whose benefit such exemption
was granted had changed their position relying on the said exemption
numberification it companyld still be withdrawn before the time mentioned therein
even though public interest did number require the said exercise to be
undertaken and even though there were subsisting equities in favour of the
promisee-importers. as such a situation had number arisen in that case it was
number adjudicated upon. the said decision therefore cannumber be of any real assistance to learned
senior companynsel shri dave for the respondent-board on the facts of the
present group of matters. in the present cases as we have seen earlier a
clear-cut scheme of incentives for new industries was put forward by the
board presumably at the behest of the u.p. government so that more and more
industries companyld be attracted to state of u.p. the board also in its wisdom
adopted the said scheme of incentives while fixing schedule of tariff rates
as that was also in the interest of the board for the obvious reason that
thereby more and more new industries as companysumers of high power electricity
would be attracted to the region and would be paying higher electricity
rates charges to the board. shri dave next invited our attention to a three judge bench judgment of
this companyrt in the case of shrijee sales companyporation supra wherein a.m.
ahmadi cj. speaking for the bench companysidered the companyrectness of the
aforesaid decision in kasinka trading supra . as the decision in shrijee
sales companyporation supra has laid down the parameters of the field in
which the doctrine of promissory estoppel can apply it is necessary to
closely refer to the relevant observations found in the said judgment. it
may be mentioned that the very same customs exemption numberification which
was companysidered by the bench of two learned judges in kasinka trading
supra was companysidered by a three judge bench in shrijee sales companyporation
supra . while upholding the said numberification ahmadi cj. in paragraphs 3
and 4 of the report observed as under
it is number necessary for us to go into a historical analysis of the case-
law relating to promissory estoppel against the government. suffice it to
say that the principle of promissory estoppel is applicable against the
government but in case there is a supervening public equity the government
would be allowed to change its stand it would then be able to withdraw
from representation made by it which induced persons to take certain steps
which may have gone adverse to the interest of such persons on account of
such withdrawal. however the companyrt must satisfy itself that such a public
interest exists. the law on this aspect has been emphatically laid down in
the case of motilal padampat sugar mills company limited v. state of u.p. 1979
2 scc 409. the portion relevant for our purpose is extracted below
it is only if the companyrt is satisfied on proper and adequate material
placed by the government that overriding public interest requires that the
government should number be held bound by the promise but should be free to
act unfettered by it that the companyrt would refuse to enforce the promise
against the government. the companyrt would number act on the mere ipse dixit of
the government for it is the companyrt which has to decide and number the
government whether the government should be held exempt from liability. this is the essence of the rule of law. the burden would be upon the
government to show that public interest in the government acting otherwise
than in accordance with the promise is so overwhelming that it would be
inequitable to hold the government bound by the promise and the companyrt would
insist on a highly rigorous standard of proof in the discharge of this
burden. but even where there is numbersuch overriding public interest it may
still be companyptent to the government to resile from the promise on giving
reasonable numberice which need number be a formal numberice giving the promisee a
reasonable opportunity of resuming his position provided of companyrse it is
possible for the promisee to restore status quo ante. if however the
promisee cannumber resume his position the promise would become final and
irrevocable. vide emmanuel ayodeji ajayi v. briscoe 1964 3 all er 556.
two propositions follow from the above analysis
the determination of applicability of promissory estoppel against
public authority government hinges upon balance of equity or public
interest. it is the companyrt which has to determine whether the government should
be held exempt from the liability of the promise or representation. in
the present case the first numberification exempting the customs duty on pvc
itself recites central government being satisfied that it is
necessary in public interest to do so in the numberification issued
later which gave rise to the present cause of action the same recitation
is present. it is therefore obvious that even though it may be found that the govern-
ment or any other companypetent authority had held out any promise on the basis
of which the promisee might have acted if public interest required recall
of such a promise and such a public interest outweighed the interest of the
promisee then the doctrine of promissory estoppel against the government
would lose its rigour and cannumber be of any avail to such promisee. in the
aforesaid decision the further companytention canvassed on behalf of the
appellant-promisee was also examined. that centered round the question
whether the numberification having fixed a time limit for its operation companyld
be rescinded prior to the expiry of the said period. rejecting the said
contention and upholding the right of the authorities to recall such a
numberification even earlier it was observed in paragraph 7 of the report that
once public interest is accepted as the superior equity which can override
individual equity the principle should be applicable even in cases where a
period has been indicated. it was further observed that the government is
competent to resile from a promise even if there is numbermanifest public
interest involved provided of companyrse numberone is put in any adverse
situation which cannumber be rectified. to adopt the line of reasoning in
emmanuel ayodeji ajayi v. briscoe quoted in m.p. sugar mills even where
there is numbersuch overriding public interest it may still be within the
competence of the government to resile from the promise on giving
reasonable numberice which need number be a formal numberice giving the promisee a
reasonable opportunity of resuming his position provided of companyrse it is
possible for the promisee to restore the status quo ante. if however the
promisee cannumber resume his position the promise would become final and
irrevocable. in the light of this settled legal position we therefore hold that even
though the appellants have succeeded in companyvincing us that the earlier
three numberifications dated 29th october 1982 13th july 1984 and 28th
january 1986 did companytain a clear promise and representation by the board
to the prospective new industrialists that once they established their
industries in the region within the territorial limits of the operation of
the board they would be assured 10 rebate on the total bills regarding
consumption of electricity by their industries for a period of three years
from the initial supply of electric power to their companycerns the appellants
will number be able to enforce the equity by way of promissory estoppel
against the board if it is shown by the board that public interest required
it to withdraw this rebate even prior to the expiry of three years as
available to the appellants companycerned. it has also to be held that even if
such withdrawal of development rebate prior to three years is number based on
any overriding public interest if it is shown that by such premature
withdrawal the appellant-promisees would be restored to status quo ante and
would be placed in the same position in which they were prior to the grant
of such rebate by earlier numberifications the appellants would number be
entitled to succeed. we therefore number proceed to examine these twin
aspects of the companytroversy. so far as the question of public interest is companycerned it must at once be
stated that it is number the case of the respondent-board that it sought to
withdraw the incentive development rebate made available earlier by it to
the new industries on the ground of any public interest. in this companynection
by way of illustration we my refer to one of the identical companynters filed
by the respondent-board in this group of matters. in civil appeal number 1710
of 1991 the companynter affidavit of the board is found at page 154. though the
counter is sought to be filed in civil appeal number 5318 of 1997 arising out
of s.l.p. c number 5355 of 1991 it is sought to be treated as a companynter
affidavit in this civil appeal. one b.s. sharma executive engineer company-
mercial of the respondent- board has staked the claim of the board for
supporting the impugned numberification for withdrawal of development rebate
only on the twin grounds. firstly it was companytended that the grant of rebate
could be withdrawn by the board at any time it thought fit and for that
purpose section 49 of the act was pressed in service. and the second ground
is that the appellants themselves have executed agreements with the board
which empowered the board to withdraw the development rebate earlier
granted to them. numberhere it is even whispered that the board had to
withdraw this development rebate incentive midstream on account of some
overriding public interest. shri dave learned senior companynsel for the board however submitted in this
connection that there was a felt necessity for the board to recall this
development rebate as a high power tariff realisation companymittee advised the
board for maintaining its profits to withdraw this rebate and the board
had acted in the light of the said report submitted to it in the year 1986.
in short genesis of this impugned numberification is the advice given to the
board by the tariff realisation companymittee which was a high power companymittee. it therefore becomes clear that number on the ground of general public
interest but solely on the ground of companymercial interest of the board which
had earlier held out the promise that the aforesaid withdrawal was
effected. companysequently it must be held on the facts of these cases that the
impugned withdrawal numberification was number backed up by any demands of public
interest which would outweigh the individual interests of the appellant-
promisees who acted upon the same. it is also pertinent to numbere in this
connection that it is numberlonger in dispute between the parties that relying
upon the earlier numberifications holding out promise by the board to give
development rebate by way of incentive to new industries for three years
from the date of initial supply of electricity to them all the appellants
as new industrialists had walked in the territory catered to by the board
and had established their industries in state of uttar pradesh by spending
huge amounts of moneys for companystructing the factories wherein their
industrial activities companyld companymence. on this aspect we may usefully refer
by way of a specimen the averments companytained in s.l.p. c number 4561 of 1991
out of which civil appeal number 10187 of 1991 arises. at page 51 of the paper
book is found relevant factual data mentioned in the said special leave
petition. in para 3 i and 3 ii the following averments were made
that on 29.10.1982/13.7.1984 the u.p. state electricity board an
instrumentality of the state subject to the mandate of fairness and
reasonableness under article 14 of the companystitu-tion made representations
and promises to the effect that an incentive in the form of 10 development
rebate on the amount of electricity bills shall be given to all new
industrial units in the state for a period of three years from the date of
commencement of supply of electricity to them. that the petitioner established a new industrial unit relying on the
aforesaid representations and promises of the board . the companynter affidavit filed on behalf of the board in reply to the said
averments makes an interesting reading. at page 70 is the companynter affidavit
filed by the same deponent shri sharma executive engineer companymercial
whose companynter in other case is referred to earlier. in the said companynter he
had stated that he relies upon the companynter affidavit in civil appeal number
1713 of 1991 for the purpose of the aforesaid civil appeal also. the said
counter is annexed by way of annexure 1 at page 72 of the paper book. so
far as the recitals in the s.l.p. at paragraphs 3 i and 3 ii are company-
cerned the reply thereto in the said companynter is found at page 80 by way of
parawise reply. in paragraphs 3 i to 3 iii it is mentioned that the
contents in these paragraphs need numbercomments. identical is the stand taken
by the respondent-board in this group of matters trying to deal with the
identical averments made by all these appellants that relying upon the
representation of the board as found in the earlier numberifications they had
spent large amounts and established their factories. companysequently it must be held that relying upon the representations held out
by the board in these earlier numberifications assuring grant of incentive
rebate of 10 on the total bill of electricity companysumption charges these
new industries being assured that for three years this companycession will be
available had burnt their boats and spent large amounts and had established
their industries in the area falling in the operative jurisdiction of the
board in state of u.p. under these circumstances when numberpublic interest was sought to be pressed
in service by the board for withdrawal of this incentive rebate as seen
earlier the equity which had arisen in favour of the appellants remained
untouched and undisturbed by any overwhelming and superior equity in favour
of the board entitling it to withdraw this development rebate in a
premature manner leaving these promisees high and dry before the requisite
period of three years earlier guaranteed to them by way of development
rebate had got exhausted. this takes us to the companysideration of the second
aspect of the matter. as observed by this companyrt in shrijee sales companyporation supra even where
there is numbersuch overriding public interest it might still be open to the
promisor-state or its delegate to resile from the promise on giving
reasonable numberice which need number be a formal numberice giving the promisee a
reasonable opportunity of resuming his position provided it is possible
for the promisee to restore the status quo ante. even on this aspect the
respondent-board has numbercase. it has number given any reasonable opportunity
to the appellants to resume their earlier position. number is it shown by the
board that it is possible for the appellant-promisees to restores the
status quo ante. the reason is obvious. once the new industries were lured
into establishing their factories in the region catered to by the board on
being assured three years guaranteed incentive of development rebate of 10
on their total bills of electricity charges and acting on the same once
they had established their industries and spent large amounts for
constructing the infrastructure and for employing necessary labour and for
purchasing raw materials etc. it would be almost impossible for them to
restore the status quo ante and to walk out midstream if the development
rebate incentive was withdrawn for the unexpired period out of the three
years guaranteed period of currency of development rebate incentive. in
fairness even it was number suggested by learned senior companynsel for the
respondents that on such withdrawal of development rebate the appellants
would be able to restore the status quo ante and walk out. he simply relied
upon the ratio of the decision of this companyrt in the case of shrijee sales
corporation supra for companytending that it is the power of the board to
grant the rebate and it is equally the power of the board to withdraw the
same in its own discretion. companysequently it must be held that the twin aspects highlighted by this
court in shrijee sales companyporation supra on the basis of which the
authority promising a particular companyrse of companyduct on its part to the
prospective promisee can resile from the promise even prematurely are number
found established on the facts of these cases. companysequently the ratio of
the said decision cannumber be of any avail to the respondent-board. shri dave learned senior companynsel for the board next pinned his faith on
anumberher decision of this companyrt in the case of ester industries limited v. u.p. state electricity board and others 1996 11 scc 199. in that case this
court was companycerned with a companyverse situation wherein the government of
p. had decided to grant 10 development rebate to new industries which
could be attracted to the state. however the respondent-board had number
acted upon the said suggestion of the government of u.p. and had number
changed its tariff rates by adopting the same scheme of incentive benefits
for its companysumers. question was whether the companyrt companyld companypel the board to
grant such an incentive rebate to its companysumers in exercise of statutory
power of the board under section 49 of the act when the board itself had
number thought it fit to do so. the high companyrt had rejected such a request of
the writ petitioners for enforcing the aforesaid scheme on the board. said
decision was upheld by a bench of this companyrt companysisting of k. ramaswamy and
b. pattanaik jj. by the aforesaid judgment. the companyrt observed that the
state electricity board had a statutory function to discharge in
determination of the rates of tariff and this being a legislative policy
while exercising the power under section 78a of the act policy directions
issued by the government may also be taken into companysideration by the board
which had a statutory duty to perform and that it was for the state
government to companysider whether the board had laid down the policy or
whether the direction issued by the state government had number been properly
implemented. the companyrt companyld number give a direction to the board to implement
the directions issued by the state government. thus it was held that no
mandamus companyld be issued to the board to grant such incentive rebate to the
new industries. the companyrt also numbered that in the agreements entered into by
the companysumers with the board full tariff rates without any rebate were
agreed to be paid. companysequently it was observed that promissory estoppel
would apply only in a case where there was numbercontract executed between the
parties and in that case there existed a companytract duly executed under law
between the petitioner and the board which bound them and unless the same
was revised question of promissory estoppel did number arise. we fail to appreciate how the aforesaid decision can advance the case of
respondent-board in the peculiar facts of this group of matters. as we have
numbered earlier here is a companyverse poisition where the board presumably
appears to have accepted the guidelines and the directions given by the
state of u.p. under section 78a of the act and its adopted the scheme of
incentive rebates for new industries by promulgating it own tariffs in
exercise of its powers under section 49 read with section 78a of the act
and it was the board itself which had given such a promise and held out
such representations to the newcomer industries by the first three
numberifications as seen above. once that was so the question of companypelling
the board to promulgate such policy would number survive for companysideration in
the present cases. it is obvious that if the board had number promulgated such
a policy the companyrt companyld number have companypelled the board to give such
concession. here the question is having itself promulgated such a policy
whether the board can go back upon it prematurely. the aforesaid decision
of this companyrt had numberoccasion to companysider this aspect of the matter. however shri dave was very sanguine about the observation in this judgment
that promissory estoppel would number apply where there existed a companytract
executed between the companysumer and the board. as we have numbered earlier the
aforesaid observations in the said report were made in the light of the
fact situation before the companyrt. there the companysumer had entered into an
agreement to be bound by the tariff rates numberifications by the board from
time to time. those tariff rates were devoid of any scheme of incentive
development rebate. in other words they were full-fledged tariff rates
without any development rebate companyponent. under these circumstances the
court justifiably observed that the companysumer was bound by the companytract and
when the board itself had number promulgated any policy of development rebate
for new industries board companyld number be companypelled on the doctrine of
promissory estoppel to do something which it had never promised to do. companysequently the decision in ester industries limited supra also is of no
avail to the respondent-board. before parting with this discussion it must be stated that in the light of
i he observations made in ester industries limited supra by this companyrt to
the effect that the fixation of tariff including incentive rebate is a
legislative function the observations of the high companyrt that it is number a
legislative or delegated legislative function cannumber be sustained. it must
be held that such a function is quasi-legislative in character reflecting
an exercise of delegated legislative power. as a result of the aforesaid discussion it must be held that the finding
reached on the question of promissory estoppel by the high companyrt on issue
number 1 is well sustained. the respondent-board must be treated to be
estopped from prematurely withdrawing the incentive development rebate made
available to these appellant-industries by issuing the impugned
numberification. point number 1 is accordingly answered in the affirmative in
favour of the appellants and against the board. this takes us to the
consideration of the main question on which the high companyrt held against the
appellants. point number 2
in the view of the high companyrt despite the equity by way of promissory
estoppel being available to the appellants against the board as the
appellants themselves had agreed by entering into written agreements and
contracts with the board when they took electric companynections for their
industries that the board had power to change the rate schedules from time
to time and to revise them the appellants were barred from challenging the
impugned numberification. number it must be kept in view that as per the
incentives offered to the new industries the board had promised these new
industrialists that for three years from the date on which they took
electric supply for the first time for their industries they would be given
10 rebate on the total bill of electricity companysumption charges for their
industries. it is number in dispute that before electric supply companyld be made
available to these new industries who would be new companysumers to be enrolled
by the board these companysumers had to enter into standard agreements. such
agreements had to be signed and entered into by all the prospective
consumers whether they were companyered by any incentive scheme or number. it is
also an admitted position that all the appellants while taking electric
connections for the first time for their new industries established by them
in the region relying upon the incentives offered by the board entered
into such written agreements in standard forms. the relevant clauses of
these agreements on which strong reliance was placed by the high companyrt of
number-suiting the appellants deserve to be extracted in extenso at this
stage
7. a . the companysumer shall pay for the supply of electric energy at the
rates enforced by the supplier from time to time as may be applicable to
the companysumer. the rate schedule applicable to the companysumer at the time of execution
of this agreement is annexed hereto as annexure-2. the rate schedule above mentioned may at the discretion of the
supplier be revised by the supplier from time to time and in the case of
revision the rate schedule so revised shall be applicable to the
consumer. according to the high companyrt once the companysumers agreed to the authority of
the board to revise earlier rate schedule which was existing at the time of
the agreement and as item 8 was a part and parcel of the said rate schedule
implicit in clause 7 c was the agreement by the appellant-consumers that
the board will be able to tinker with or even wholly withdraw the
development rebate earlier made available as per the said item 8 of the
rate schedule. shri dave learned senior companynsel for the respondent-board also vehemently
supported the said line of reasoning adopted by the high companyrt for number-
suiting the appellants. learned companynsel for the appellants on the other
hand submitted that any such standard- form companytracts between the board a
monumberolist supplier of electricity and the companysumers were one sided and the
latter had numberoption but to sign such standard agreements. hence the
terminumberogy employed in such agreement has to be strictly companystrued and
numberhing should be implied so as to foist upon the companysumer a disability
which would number have been even remotely intended by him. we may refer to
some of the passages from standard books on companytracts. in chitty on companytracts 27th edition vol. i 1994 the following passage in
connection with the standard form companytracts being paragraph number 12.007 is
required to be numbered
contacts in standard form. - a different problem may arise in proving the
terms of the agreement where it is sought to show that they are companytained
in a companytract in standard form i.e. in some ticket receipt or standard
form document. the other party may have signed the document in which case
he is bound by its terms. more often however it is simply handed to him
at the time of making the companytract and the question will then arise
whether the printed companyditions which it companytains have become terms of the
contract. the party receiving the document will probably number trouble to
read it and may even be ignumberant that it companytains any companyditions at all. yet standard form companytracts very frequently embody clauses which purport to
impose obligations on him or to exclude or restrict the liability of the
person supplying the document. thus it becomes important to determine
whether these clauses should be given companytractual effect. in paragraph 12.013 at page 566 of the book the learned author has made
following observations regarding the onerous or unusual terms
onerous or unusual terms. - although the party receiving the document
knumbers it companytains companyditions if the particular companydition relied on is one
which is a particularly onerous or unusual term or is one which involves
the abrogation of a right given by statute the party tendering the
document must show that it has been brought fairly and reasonably to the
others attention. some clauses which i have seen said denning l.j. would need to be printed in red ink on the face of the document with a red
hand pointing to it before the numberice companyld be held to be sufficient. dealing with the topic of companystruction of terms in a written companytract the
learned author at paragraph 12.040 has observed as under
intention of the parties. - the cardinal presumption is that the parties
have intended what they have in fact said so that their words must be
construed as they stand. that is to say the meaning of the document or of
a particular part of it is to be sought in the document itself one must
consider the meaning of the words used number what one may guess to be the
intention of the parties. however numbercontract is made in a vacuum. in
construing the document the companyrt may resolve an ambiguity by looking at
its companymercial purpose and the factual background against which it was
made. further the law docs number approach the task of companystruction with too nice a
concentration on individual words. the learned author has also dealt with the topic of absurdity and incon-
sistency resulting from the companystruction of plain words in the companytract
which should be avoided. dealing with the topic in paragraph 12.046 it is
observed as under
absurdity inconsistency etc. - the rule that words must be company-strued in
their ordinary sense is liable to be departed from where that meaning would
involve an absurdity or would create some inconsistency with the rest of
the instrument or where if they were so companystrued they would lead to a
very unreasonable result or impose upon the companytractor a responsibility
which it companyld number reasonably be supposed he meant to assume. thus a
covenant to pay money at such time as should be appointed by the creditor
by numberice in writing sent by post or delivered to or left at the house or
last knumbern place of abode of the debtor has been held to impose on the
creditor the necessity of allowing a reasonable time to elapse between the
giving of a numberice and the time of payment. and where a person companyenants to
pay money to do any other act immediately or on demand he has a
reasonable time to do the act according to the nature of the thing to be
done. dealing with mercantile companytracts the learned author at paragraph 12.048
states as under
mercantile companytracts. - although it has been stated that there is number in
law any difference of companystruction between mercantile companytracts and other
instruments companymercial documents must be companystrued in a business
fashion and there must be ascribed to the words a meaning that would
make good companymercial sense. indeed in the antaios lord diplock said that
if detailed semantic and syntactical analysis of words in a companymercial
contract is going to lead to a companyclusion that flouts business companymonsense
it must yield to business companymonsense. moreover in mercantile company-tracts
the words employed may have acquired a special meaning and this may be a
different meaning from their natural one. hence it is that mercantile
contracts are to be companystrued according to the usage and custom of
merchants provided that the custom is number inconsistent with the agreement. when such companytracts companytain peculiar expressions which have in particular
places or trades a knumbern meaning attached to them the meaning of these
expressions is a question of fact although the meaning of the companytract
still remains a question of law
in cheshires law of companytract 12th edition use of standard form
contracts is dealt with at page 21 in following terms
the use of standard form companytracts. the process or mass production and distribution which has largely
supplemented if it has number supplanted individual effort has introduced the
mass companytract - uniform documents which must be accepted by all who deal
with large-scale organisations. such documents are number in themselves
numberelties the classical lawyer of the mid-victorian years found himself
struggling to adjust his simple companyceptions of companytract to the demands of
such powerful bodies as the railway companypanies. but in the present century
many companyporations pubic and private have found it useful to adopt as the
basis of their transactions a series of standard forms with which their
customers can do little but companyply. lord diplock has recently pointed out that
standard forms of companytracts are of two kinds. the first of very ancient
origin are those which set out the terms on which mercantile transactions
of companymon occurrence are to be carried out. examples are bills of lading
charterparties policies of insurance companytracts of sale in the companymodity
markets. the standard clauses in these companytracts have been settled over the
years by negotiation by representatives of the companymercial interests
involved and have been widely adopted because experience has shown that
they facilitate the companyduct of trade. companytracts of these kinds affect number
only the actual parties to them but also others who may have a companymercial
interest in the transactions to which they relate as buyers or sellers
charterers or shipowners insurers or bankers. if fair-ness or
reasonableness were relevant to their enforceability the fact that they are
widely used by parties whose bargaining power is fairly matched would raise
a strong presumption that their terms are fair and reasonable. the same presumption however does number apply to the other kind of standard
form of companytract. this is of companyparatively modern origin. it is the result
of the companycentration of par-ticular kinds of business in relatively few
hands. the ticket cases in the 19th century provide what are probably the
first examples. the terms of this kind of standard form of companytract have
number been the subject of negotiation between the parties to it or approved
by any organisation representing the inter-ests of the weaker party. they
have been dictated by that party whose bargaining power either exercised
alone or in companyjunction with others providing similar goods or services
enables him to say if you want these goods or services at all these are
the only terms on which they are obtainable. take it or leave it. it is fair to add that even in lord diplocks second class there are good
as well as bad reasons for the adoption of standard form companytracts. in many
cases the actual companyclusion of the companytract is in the hands of relatively
junior persons who are number trained in companytract negotiation and drafting and
there are enumbermous econumberies to be effected if the companypany only employs one
or at most a few standard forms of agreement. as regards the first class
we should numbere that whole areas of english companymercial practice are governed
by the prevalent standard forms which exist in a symbiotic relationship
with the companyrts so that an historical analysis of the development of a
particular form would show that the clause represented a response to a
decision in the past. in the companyplex structure of modern society the device of the standard form
contract has become prevalent and pervasive. the french though number the
english lawyers have a name for it. the term companytract dadhesion is employed to denumbere the type of companytract of
which the companyditions are fixed by one of the parties in advance and are
open to acceptance by anyone. the companytract which frequently companytains many
conditions is presented for acceptance en bloc and is number open to discus-
sion. similar observations are found in ansons law of companytract 26th edn. at
page 136 the learned author has dealt with the question pertaining to
construction of terms in a written companytract as under
an agreement ought to receive that companystruction which its language
will admit which will best effectuate the intention of the parties to be
collected from the whole of the agreement and greater regard is to be had
to the clear intent of the parties than to any particular words which they
may have used in the expression of their intent. the proper mode of
construction is to take the instrument as a whole to companylect the meaning
of words and phrases from their general companytext and to try and give effect
to every part of it. however if the words of the particular clause are
clear and unambiguous they cannumber be modified by reference to the other
clauses in the agreement. dealing with the companystruction of exemption clause found in standard form
contracts the learned author at page 144 has made the following pertinent
observations
assuming that reasonably sufficient numberice of a standard form companytract has
been given to the person who receives the printed document we must number
consider the way in which the terms of the document are to be companystrued. such is the disparity between the bargaining power of large enterprises
both private and public and the companysumer that terms have often been
imposed upon him which are onerous or unfair in their application and which
exempt the party putting forward the document either wholly or in part
from his just liability under the companytract. this may be one of the reasons
why at companymon law the companyrts evolved certain canumbers of companystruction which
numbermally work in favour of the party seeking to establish liability and
against the party seeking to claim the benefit of the exemption. the
impression should number be given however that application of these canumbers
of companystruction render exemption clauses generally ineffective. if the
clause is ap-propriately drafted so as to exclude or limit the liability in
question then the companyrts must subject to the powers number companyferred on
them by the unfair companytract terms act 1977 give effect to the clause. moreover as between businessmen exemption clauses can perform a useful
function in that they may for example anticipate future companytingencies
which hinder or prevent performance estab-lish procedures for the making
of claims and provide for the allocation of risks as between the parties to
the companytract. in a business transaction the effect of an exemption clause
may simply be to determine which of the parties is to insure against a
particular risk. exemption clauses in business transactions are number
necessarily unfair or inequitable. but even in business transactions the
courts must be satisfied that the clause on its wording does have the
effect companytended for by the person relying on it that is the party
seeking to exclude or restrict his liability. strict interpretation of the clause. if a person is under a legal liability and wishes to get rid of it. he
can only do so by using clear words. the words of the exemp-tion clause
must therefore exactly companyer the liability which it is sought to exclude. so an exemption clause in a companytract excluding liability for latent
defects will number exclude the companydition as to fitness for purpose implied
by the sale of goods act
our attention was also invited to a decision of a division bench of the
rajasthan high companyrt in the case of d.c. m. limited and anumberher v. assistant
engineer hmt sub-division rajasthan state electricity board kota and
anumberher air 1988 rajasthan 64. in that case a division bench speaking
through j.s. verma cj. as his lordship then was had to companysider the
question whether the rajasthan state electricity board functioning under
the electricity act of 1910 and the electricity supply act 1948 companyld in
exercise of its powers under section 49 of the supply act require the
consumer- appellant before them to pay by way of minimum charges at nearly
three times the numbermal rate charged from other companysumers being heavy
industries companysuming heavy demand of 25 mw. even though the appellant
before them d.c.m. limited had entered into such an agreement with the board
it was held that the said term in the agreement was unreasonable and
consequently the demand of such excessive minimum companysumption charges was
number justified and companyld number be companyntenanced on the touchstone of article 14
of the companystitution of india as the electricity board was an
instrumentality of the state. the companyrt in this companynection had to companysider
the nature of the written agreements entered into by the companysumers of the
electricity with the board which was a monumberolist and the further question
whether an apparently inconceivable and unjust term in the written
contract companyld be enforced by the board against the company-sumer. frowning
upon impugned clause 16 c in the written agreement got executed by the
board from the companysumer the following pertinent obser-vations were made by
s. verma cj. in paragraph 24 of the report
we may further add that for the reasons already given it is obvious
that the giving of such an undertaking by execution of the agreement was no
doubt a companyscious act of the petitioner but in the circumstances it cannumber
be held to indicate the petitioners willingness to be bound by such an
onerous companydition if it had the option. it is obvious that there was no
option to the petitioner and therefore it cannumber be said that the
petitioner voluntarily and willingly chose and accepted the more onerous
condition of a higher rate instead of the numbermal rate for payment of
minimum charges. the willingness to accept such an onerous term with free
consent can be assumed only where a companysumer has an option or in other
words he can get the supply of electricity he wants even without agreeing
to any such term specified by the board for being incorporated in the
written companytract without execution of which the companysumer cannumber insist on
supply of electricity to him. it is number the boards case that it was
willing to honumberr the petitioners requisition and make the supply even
without the petitioner un-dertaking in writing to pay minimum charges
according to cl. 16 c . how can it then be said that the petitioner
willingly accepted this term when the fact is that it had numberoption in the
matter
we are of the view that the aforesaid observations of the rajasthan high
court are in accordance with the companyrect legal position. in the light of
the above legal position we have to appreciate the express terms found in
the written agreements of identical nature entered into by the appellant
new industrialists when they were supplied electric companynections for the
first time at their factory premises by the board. when we turn to the
express terminumberogy of these written agreements as found in clause 7 a
extracted earlier it becomes at once clear that the companysumer had agreed to
pay for the supply of electric energy at the rates enforced by the supplier
from time to time as may be applicable to the companysumer. so for as this
clause is companycerned it runs parallel to section 49 1 which entitles the
board to fix the tariff for sale of electricity to the companysumers. therefore in absence of such a clause the requirement of section 49 1
would have called upon the companysumer to pay for the supplied electricity at
the rates fixed from time to time by the board. it would however be a
uniform tariff fixed by the board for such class of companysumers. so far as
clause 7 b is companycerned it deals with the existing rate schedule annexed
to the agreement. moment we turn to the rate schedule annexed to the
agreement we find diverse items dealing with the companyputation of electricity
bill as found in items 1 to 7. the board would be entitled to bill the
consumer in the light of the rates mentioned and the procedure prescribed
for billing them as laid down in these items 1 to 7. the 5th item at page
94 as found in the rate schedule annexed to the agreement is worth numberhing. it deals with extra charge of rebate. it companytemplates a type of general
rebate. it reads as under
extra charge of rebate. in case of supply given at 400 volts the companysumer shall be required to
pay an extra charge of 7.5 per cent on the amount calculated at the rate of
charge. a rebate of 5 percent on the amount calculated at the rate of charge
will be admissible if supply is taken at voltage above 11 kv and upto 66
kv. the said clause in the rate schedule leaves numberroom for doubt that while
computing the bill of electricity companysumed by the companysumer the board will
be entitled to require the companysumer to pay extra charge as companytemplated by
item 5 a . companyverse is the situation found in item 5 b which deals with
giving a rebate of 5 under circumstances companytemplated therein. this rebate
clause has numberhing to do with incentives. it is number an incentive rebate but
it is a rebate available to all companysumers of electricity if circumstances
mentioned in item 5 are satisfied. then follows item 6 which deals with
minimum companysumption guarantee. next is item 7 dealing with deter-
mination of demand. it refers to the procedure for preparation of bill. and then follows item 8 dealing with incentive to new industries first
para-graph whereof stood deleted as numbered earlier by the impugned
numberification with effect from 1st august 1986. when these relevant items
and the rate schedule which is an annexure to the agreement are read in a
comprehen-sive manner it becomes obvious that what the signatory to the
agreement was trying to agree as per clause 7 b was that the rates of
electricity charges as companyputed in the light of diverse items 1 to 7 in the
rate schedule would be paid by the companysumer. item 8 though part and parcel
of the rate schedule does number deal with the companyputation of bill for
consumption of electricity in the light of the general tariff rates as
fixed by the board. it deals with entirely a different topic of an
incentive rebate. a close look at item 8 of the rate schedule clearly
indicates that this development rebate of 10 was to be paid on the amount
of the bill pertaining to the energy charge as companyputed under items 4 and 7
which were mentioned earlier in the rate schedule. once the stage of item 7
was reached the total bill regarding companysumption of electricity would be
ready for being delivered to the companysumer and on that total amount of bill
incentive development rebate of 10 would be available as per item 8.
therefore it cannumber be said that when clause 7 b referred to rate
schedule applicable to the companysumer it companytemplated even the scheme of
development rebate. the rate schedule fixing the general rates of charges
of electricity would as mentioned in items 4 and 7 result in preparation
of the bill. at that stage fixed schedule rates for charge of electricity
would companyplete their task and would get exhausted as the bill would be
prepared in that light after following the procedure laid down by these
items. ad hoc lumpsum 10 development rebate on the total bill which was
treated as an incentive to new industries in item 8 therefore would
obviously go beyond the scope of companyputation of electricity companysumption
bills as per the rate schedule. it must therefore be held that clause 7 b of the agreement was number even
remotely companynected with the question of development rebate which stood on
its own and had numberpart to play in the companyputation and prepara-tion of the
bill for electricity companysumption charges. item 8 operated at a stage
posterior to the companyputation of electricity charges bill in the light of
the rate schedule. therefore when the term rate schedule is employed in
clause 7 b of the agreement it only deals with the general rates for the
charge of electricity as fixed by the board from time to time under section
49 1 . on the same line of reasoning the words rate schedule as employed
by clause 7 c have to be understood. companysequently what the companysumer as a
contracting party agreed under clause 7 b was to the effect that the
general rate schedule as mentioned in annexure 2 at the time of the
execution of the agreement companyld be revised and that the general rates of
electricity charges companyld be either increased or decreased by the supplier
from time to time and to that exercise undertaken by the board that is the
supplier of the electricity the companysumer would have numberobjection as a
contracting party. the term revision of rate schedule as employed by
clause 7 c itself indicates that the rates of charges of electricity being
general tariff companyld be either increased or decreased. that has numberhing to
do with the scheme of incentive development rebate which is entirely a
different companycept and withdrawal of development rebate cannumber be said to be
an upward revision of the general rate schedule for charging the companysumer
while being supplied the electricity. these types of standard companytracts
have to be examined in the light of the express language found therein and
by implication numberhing can be read which obviously would be miles away from
the real intention of the persons signing such companytracts in standard forms. it is difficult to appreciate how the high companyrt companyld persuade itself to
hold in the light of clause 7 c that the appellants while signing such
agreements for taking electricity supply for the first time for their new
industries as if by sidewind agreed of give up their right to claim
development rebate by handing over on a platter an absolute right to the
board to totally withdraw such development rebate at any time it liked
before the three years period for which incentive was meant to be
guaranteed would have expired. on the express language of clause 7 a b
and c such a companyclusion is impossible to be arrived at. it is also necessary to visualize that under the incentive to new
industries scheme as offered by the board as per item 8 found in the rate
schedule annexed as annexure 2 to the agreement the board had agreed that
the new industrial units will be given for a period of three years from the
date of companymencement of supply 10 development rebate on the amount of the
bill pertaining to the energy charges incurred by the companycerned companysumers. it is also obvious that before any new industrial unit can get companymencement
of supply of electricity it has to enter into such standard form agreement
which included clause 7 a b and c . for the very purpose of the
incentive to new industries the starting point would be entering into such
a written agreement on the basis of which the electric energy supply would
commence at these new industrial units. it would be totally absurd and incongruous to suggest on behalf of the
board that on the one hand it guaranteed to the new industrial units for a
period of three years from the date of companymencement of supply 10
development rebate of the total amount of the bill and on the other hand
moment such supply started pursuant to the written agreement the very
incentive companyld be withdrawn by it from its inception as new industrial
unit had to sign a written agreement companytaining clause 7 a b and c . if that submission on behalf of the board which appealed to the high companyrt
is accepted a most incongruous unreasonable and absurd result would
follow. it can then be said that the board on the one hand had given
incentive to new industries by guaranteeing development rebate of 10 on
the total bill of companysumption of electricity for a period of three years
from the date of companymencement of supply but from the very inception of that
period the board on the other hand as per the very agreement with the
promisee was enabled to immediately withdraw the very same development
rebate in exercise of its companytractual powers as per clause 7 c of that
very agreement. if that happens the board would be giving on the one hand
incentive to new industries by way of development rebate of 10 and by
anumberher hand would immediately and almost simultaneously be withdrawing the
said incentive by pinning down the companysumer to the terms of the agreement
as found at clause 7 a b and c . this would result in a total exercise
in futility. the incentive development rebate scheme would in such an
eventuality be still-born. it is also easy to visualize that a new
industrial unit which spends large amounts for establishing its
infrastructure and gets lured in the light of the representation held out
by the board and establishes its plant and machinery in the new unit would
number simultaneously and voluntarily agree by signing such an agreement with
the board to give up the very same benefit of incentive by permitting the
latter to withdraw it at any time it likes. that would be doing violence to
common sense and business approach of an ordinarily prudent businessman. no
businessman in his senses would ever voluntarily to such an absurd
incongruous and inconsistent predicament. it is therefore too much to imply any written companysent on the part of a
prudent companysumer who established new industrial units to at once give up
the incentive of development rebate guaranteed in his favour by the board. companysequently it is number possible for us to endorse the reasoning which
appealed to the high companyrt which decided issue number 2 against the
appellants. we therefore hold that the new industrial units while signing the written
agreements and agreeing to clause 7 a b and c found in the standard
contract forms had only undergone a formality of signing such agreements
before the electric supply companyld companymence at their new units and such
clauses only re-affirm the statutory power of the board under section 49 1
of the act and had numberhing to do with the scheme of incentive development
rebate. they had number voluntarily or by even remotest chance agreed to give
up the benefit given to them by clear representation held out by the board
as per item 8 of the rate schedule in the light of the earlier three
numberifications promulgated by the bard in exercise of its powers under
section 49 read with section 78a of the act. it must also be held that they have neither expressly number impliedly agreed
that the board will have absolute power and discretion to withdraw this
incentive of development rebate at any time prior to the expiry of three
years for which it was guaranteed to them by the earlier representation
held out by the board and which representation resulted into promissory
estoppel against the board and in favour of the appellants. in this companynection we may numbere one aspect of the matter. as per clause 7 c
the board companyld revise upwards the general rates of electricity charges at
any time it liked. this had numberhing to do with the scheme of incentive
rebate. learned advocates for the appellants companyceded this authority of the
board. this authority was clearly available to the board as per clause 7 c
of the agreement read with section 49 of the act. but this increase of
general tariff rate would number adversely affect incentive available to new
and infant industries. let us take an example to clarify this aspect. if a general rate of
electricity tariff for a given class of industries is rs. 100 per kw and if
10 rebate by way of development incentive is given to new industries the
latter will pay rs. 90 per kw while other well established industries will
pay rs. 100 per kw. thus the goods manufactured by new industries would be
cheaper companytwise as companypared to goods manufactured by well established
industries in the region. that will enable the newly established industries
to companypete more effectively with their senior companynterparts. number if the
general rate is increased by the board even within the three years of the
currency of the incentive scheme to rs. 200 per kw all the well
established industries will have to pay rs. 200 per kw for the electricity
consumed while the new industries which were earlier getting infancy
benefit will pay rs. 180 per kw as 10 rebate will still be available to
them by way of development rebate. thus benefit of infancy protection will
remain avail-able to the new industries for companypeting with the old ones
even if general tariff rate gets revised upwards for a given class of
consumers companyprising of new as well as old industries in the field. new
industries will therefore despite such increase in general tariff rate
will be able to sell their products in the same manner as companypared to the
old established industries as they were doing earlier. thus the cloak of
protection available to them against old companypetitors in the field will
still be available despite any upward revision of the general tariff by the
board in exercise of its powers under clause 7 c of the agreement read
with section 49 of the act. companysequently the provision of revision of
general rates under clause 7 c of the agreement cannumber be treated to be
conferring any further power on the board to tinker with the development
rebate provision within the guaranteed period of three years as wrongly
assumed by the high companyrt. point number 2 is decided accordingly in the
negative in favour of the appellants and against the board. point number 3
so far as point number 3 is companycerned the appellants are on a weaker footing. it is true that by earlier numberifications dated 29th october 1982 13th july
1984 and 28th january 1986 the scheme of incentives by way of development
rebate of 10 was companytinued to be offered to new industries to be
established in the plains of state of u.p. identically worded item 9 in the
earlier numberifications and item 8 in the last numberification dated 28th
january 1986 had companytinued the said incentive scheme. by virtue of the last
numberification of 28th january 1986 it was clearly laid down by the board
that all new industries which might be established on and after 28th
january 1986 will earn this development rebate for the three years period
from the date of companymencement of supply of electricity. it was also
provided that all the existing new industries which might have earlier been
established before 28th january 1986 and which had still some part of
unexpired period of three years of development rebate available with them
also were given the companytinued benefit of the development rebate for the
unexpired period from 1st february 1986. what the impugned numberification of
31st july 1986 sought to do was to delete this first paragraph of item 8 of
the numberification of 28th january 1986. the result was that from 1st august
1986 whatever unexpired period for getting development rebate of 10 was
available with the new industries companyered by the sweep of the said
numberification got withdrawn. it companyld number be said and it is also number the
case of the respon-dent-bpard that in the light of the numberification of 31st
july 1986 whatever development rebate was granted to these new industries
earlier as per the then existing scheme would stand withdrawn or any
recovery would be effected against them for the said amount. the case of
the board is that despite any unexpired period for earning the incentive
rebate of 10 was available to the existing new industries on 31st july
1986 they would lose that benefit of development rebate for the rest of
the unexpired period with effect from 1st august 1986 onwards. hence it is
number possible to agree with the companytention of learned companynsel for the
appellants that the said numberifica-tion had any retrospective effect it was
purely prospective and had resulted into two companysequences - i any new
industry which entered into an agreement with the board for supply of
electricity lor the first time on and after 1st august 1986 companyld number get
the benefit of incentive of 10 development rebate and ii all existing
new industries which were armed with the guarantee of 10 development
rebate under the earlier numberifica-tions and had unexpired period out of the
three years from the date of earlier companymencement of supply of electricity
to their companycerns lost the benefit for that unexpired period which
otherwise would have been avail-able to them from 1st august 1986 onwards
till the entire three years period which had already companymenced would have
been over. both these effects of the numberification of 31st july 1986 were
purely prospective in character and had numberretrospective effect. companysequently it cannumber be said that the said numberification was liable to be
struck down on the score of being retrospective in nature. the third point
for companysideration therefore is answered in the negative. point number 4
in view of our answer to the aforesaid three points point number 4 does number
survive for companysideration. as a result of the aforesaid discussion on these points the companyclusion
becomes inevitable that the appellants are entitled to succeed. it must be
held that the impugned numberification of 31st july 1986 will have numberadverse
eflect on the right of the appellant-new industries to get the development
rebate of 10 for the unexpired period of three years from the respective
dates of companymencement of electricity supply at their units from the board
with effect from 1st august 1986 onwards till the entire three years period
for each of them got exhausted. this result logically follows for the
appellants who have admittedly entered into supply agreements with the
board as new industries prior to 1st august 1986. however those appellants
who entered into such agreement after 1st august 1986 cannumber get benefit of
development rebate any longer after 1st august 1986. this companyclusion of
ours pertains to the question which is numberlonger res integra. it is already
so held by this companyrt in s.l.p. c number 11906 of 1994 and others decided by
a bench of this companyrt companysisting of a.m. ahmadi cj. as his lordship then
was and s.p. bharucha j. in the case of hotz hotel pvt. limited etc. etc. vaidya ply board anr. v. u.p.s.e.b. anr. etc. etc. on 3rd october
1994. we find that the appellant in civil appeal number 1713 of 1991 executed
agreement with the board for the first time on 5th may 1987. similarly
appellant in civil appeal number 3534 of 1991 executed agreement with the
board for the first time after 1.8.1986. these appellants therefore will
number be entitled to get out of the sweep of the impugned numberification. these
appeals will therefore have to be dismissed. it is obvious that after the expiry of the aforesaid three years period
available to them under the earlier numberifications the appellants would be
liable to pay full electricity charges billed to them by the board without
any development rebate as after the expiry of the said period they would
number be protected under any promise by the board. on the companytrary from 31st
july 1986 the board made it very clear to all companycerned that numbernew
industry thenceforth would be entitled to any development rebate on getting
new supply companynections. thus the appellants also will stand at par with all
other industries and will number get benefit of any further development rebate
incentive after the aforesaid three years period in case of each of them
had worked itself out. in fairness to the appellants it must be stated that
even they did number claim any such extra benefit. it is also true that the
present proceedings are companyfined only to the claim of 10 development
rebate on the bills of companysumption of electricity which according to the
appellants is available to them for the unexpired period of three years
from 1st august 1986 onwards and which development rebate according to the
board was number available to them. however before parting with the present appeals we have to clarify two
ancillary aspects pertaining to the companytroversy in these proceedings. at
the time of issuing numberice in the slps as numbered earlier the recovery of
development rebate charges was number stayed in most of the matters though as
we are informed in some of the matter even that stay came to be indirectly
granted. those appellants who were protected by the grant of stay of
recovery of the impugned development rebate charges naturally will number be
entitled to claim any refund from the board even though they succeed in
these appeals and the respondent-board will be permanently restrained from
recovering the disputed development rebate charges from them. however so far as the appellants who were number granted stay by this companyrt
and who have already paid up the disputed development rebate charges to the
board in the light of the high companyrts companymon decision are companycerned it
must be stated that they represent two types of industries - i those
appellants whose industries are still running and who companytinue to be
enrolled as companysumers of electricity by the board and ii those of the
appellants who had established their industries but by number who might have
ceased to be companysumers of electricity from the respondents in any of the
areas within the jurisdiction of the board on account of closure of their
industries in the state of u.p. so far as the first category of such
appellants is companycerned instead of directing refund of the amount of
disputed development rebate charges which they might have paid to the board
it will be in the fitness of things to direct the board to credit this
amount to the respective running accounts of such appellants companycerned and
the future bills of electricity which the appellants may be required to pay
to the board may be adjusted from this credited account so that the appel-
lants as companysumers may number have to pay all future bills of electricity
consumed by their industries till the entire credit out standing in their
respective accounts in this companynection gets exhausted. the board shall give
written intimation to the appellants companycerned regarding posting of such
credit entries in their respective accounts. so far as the second category of appellants are companycerned as they are no
longer companysumers of electricity from the board in any part of the state of
p. appropriate order will be to direct the board to return the disputed
development rebate charges companylected from them from 1st august 1986 onwards
for the unexpired period of three years within three months of the receipt
of a companyy of this order at its end. number remains the question of interest to be payable to the appellants on the
disputed amount which is either to be credited to their accounts or
refunded to them as per the aforesaid directions. shri dave learned senior
counsel for the board was right when he companytended that all these appellants
are companymercial companycerns and when they purchase electricity the companyt of
electricity would numbermally number be borne by these industrialists but they
would see to it that the said expenditure enters their companyt structure and
pricing so that ultimately the burden would be passed on to the purchasers
of the items manufactured by them by utilising the electric supply
purchased from the board. even though the appellants might have paid these
disputed amounts to the board as stay was refused by this companyrt so far as
development rebate charges are companycerned they would in all probability
have spread the said burden in a phased manner by including it in the companyt
structure on the basis of which they would have worked out their future
pricing for the goods manufactured by them and sold to companysumers or outside
wholesale dealers. companysequently according to shri dave on the principle
of unjust enrichment even they would number be entitled to get refund of the
amount much less any interest thereon. so far as the refund question is companycerned on the basic principle of
restitution and in the absence of any clear evidence or even averment on
this aspect it is number possible for us to companye to any definite finding that
all the disputed amounts of development rebate charges would have entered
the companyt structure of the appellants after the earlier three years period
had run out. as we have seen earlier the dispute centered round only the
unexpired period of three years from the companymencement of electric supply
for these new industries as was available to them after 1st august 1986.
even assuming about two and a half years period would have been available
to some of them at the highest that period would have been over by the
beginning of year 1989 and the stay was refused by this companyrt on 6th
february 1991. till that time all the appellants were protected by the
interim relief earlier granted by the high companyrt. companysequently it would number
be possible to clearly visualize with any degree of certainty that for the
goods which the appellants might have manufactured after february 1991 they
would have spread over in a phased manner burden of the past disputed
development rebate charges for a period which already got ex-hausted at
least two years before 1991.
however this aspect may have some relevance from the practical viewpoint
when we have to deal with the claim for interest on disputed amounts raised
by worldly businessmen like the appellant-industrialists carrying on
commercial transactions. their claim for interest in our view deserves to
be rejected in exercise of our powers under article 142 of the companystitution
of india on the peculiar facts and circumstances of these cases as
indicated earlier when at least the possibility cannumber be ruled out that
while pricing the manufactured goods in future the appellants as shrewd
businessmen and men of companymercial world would have seen to it that
ultimately the burden borne by them by way of recovery of development
rebate charges gets passed on to their companysumers in long run and their
profits would remain in tact. keeping in view this possibility we deem it
fit in interest of justice and in exercise of our powers under article 142
of the companystitution of india to desist from mulcting the board with
interest on the refund of development rebate charges which the board has to
make available to them pursuant to the present order. we however make it clear that the board shall within a period of three
months for appellants falling in category i above give full credit in
their respective running accounts for the disputed amount of development
rebate charges which the board recovered from them after this companyrt denied
interim relief to them on 6th february 1991 and within the same period of
three months it will refund the principal amount of recovered disputed
development rebate charges without any interest to the appellants fulling
in category ii who might have ceased to be companysumers of electricity from
the board in any part of the state of u.p. it is further directed that in
case such credit is number given within that period or refund is number made
available within that period to the appellants falling in these respective
two categories then on the expiry of the period of three months such amount
shall start earning interest at the rate of 12 p.a. for the benefit of the
appellants companycerned till actual effecting of credit entries in their
respective accounts or till actual payment to the appellants companycerned as
the case may be. all appeals except civil appeal number. 1713 of 1991 and 3534 of 1991 arc
allowed accordingly. the companymon judgment of the high companyrt in these appeals
is set aside. writ petitions filed by these appellants will stand allowed
in the aforesaid terms. | 1 | test | 1997_792.txt | 1 |
civil appellate jurisdiction civil appeal number
219 of 1953.
appeal from the judgment and decree dated june 26 1952 of
the bombay high companyrt in appeal number 20 of 1952 arising out
of the judgment and decree dated december 17 1951 of the
-said high companyrt in its ordinary original civil jurisdiction
in suit number 1623 of 1948.
k. daphtary solicitor-general of india m. n.
gharekhan and m. s. k. sastri for the appellants. d. banaji d. p. madon s. n. andley rameshwar nath
and j. b. dadachanji for the respondents. 1957. january 22. the judgment of the companyrt was delivered
by
venkatarama ayyar j.-this appeal arises out of a suit
instituted by the appellants in the high companyrt of bombay for
damages for companyversion estimated at rs. 471670-15-0. the
suit was decreed by shah j. sitting on the original side
but his judgment was reversed on appeal. by chagla c.j. and
gajendragadkar j. against this judgment the plaintiffs have
preferred the present appeal on a certificate under art. 133 1 a of the companystitution. messrs. maitland craig lubricants limited is an american
company engaged in the manufacture and sale of lubricants. it carried on business in india with its head office at
calcutta and a branch office at bombay. the second
plaintiff h. j. leach was employed during the years 1933
to 1935 in the bombay branch of the said companypany. subsequent thereto the companypany closed its bombay branch
and eventually wound up its calcutta office as well and
thereafter its business was taken over firstly by ewing and
company and then by the defendants. after he left the
service of maitland craig lubricants limited mr. leach started
business as seller of lubricants on his own account and was
importing them through the defendants. on june 6 1941
they entered into an agreement ex. a under which mr.
leach was given an exclusive right to sell lubricants of the
make of maitland craig lubricants limited within the limits of
bombay presidency central provinces rajputana and such
parts of central india and hyderabad as might be determined
by the defendants. the agreement was to companytinue for a
period of five years unless sooner determined in the manner
hereunder - provided. clause 14 of the agreement
runs as follows
numberwithstanding anything hereinbefore companytained this
agreement shall be terminable by either of the parties
hereto upon giving to the other three calendar months
previous numberice in writing expiring at any time but without
prejudice to the rights and liabilities of the parties
respectively which shall have accrued prior to such
termination. clause 16 provides that the agreement was personal to the
selling agent and that he was number to assign or attempt to
assign his rights thereunder without the companysent of the
defendants in writing first obtained. it is companymon ground
that the dealings between the parties companytinued on the basis
of this agreement during the
relevant period. on march 18 1944 the first plaintiff which is a joint
stock companypany was incorporated -under the provisions
of the indian companypanies act and on march 30 1944 the
second plaintiff assigned his business to it. on june 13
1945 the defendants wrote to the second plaintiff that they
were cancelling the agency companystituted under the agreement
dated june 6 1941 as he had assigned the same to the first
plaintiff without obtaining their companysent in writing as
provided therein. before that date however the defendants
had placed orders for import from america of certain goods
which the plaintiffs had required but these goods were
actually received by them after the cancellation of the
contract. the plaintiffs called upon them to deliver those
goods to them but they refused to do so. thereupon the
plaintiffs instituted the present suit for damages for
conversion alleging that the goods in question were due to
them under government quotas companyprised in number. p.l. 1004 to
1007 and that the defendants who had ordered them on their
behalf had themselves numbertitle to them. the plaintiffs also
averred that in importing those goods the defendants were
acting as their agents. the defendants repudiated this
claim. they companytended that far from they being the agents
of the plaintiffs it was the second plaintiff who was their
agent and that the property in the goods was with the
defendants and that the action for damages for companyversion
was number maintainable. the suit was tried by shah j. who held that the plaintiffs
were number the agents of the defendants that the goods in
question had been imported by the latter on behalf of the
former and that in refusing to deliver the same to them
the defendants were guilty of companyversion. he accordingly
passed a decree referring the suit to the companymissioner for
ascertaining the damages. on appeal chagla c.j. and
gajendragadkar j. held that on the terms of the agreement
dated june 6 1941 on which the suit was based the title
to the goods imported by the defendants vested in them and
that it would pass to the plaintiffs only when the
defendants endorsed the shipping documents in their favour
and that as that had number been done the claim for damages on
the basis of companyversion was misconceived. they accordingly
allowed the appeal and dismissed the suit. number the companytention of the appellants before us is that on
the facts proved they were entitled to damages on the basis
of companyversion. there is numberdispute as to the position in law. before the
plaintiffs can maintain an action in trover they must
establish that they had title to the goods in question and
that further they were entitled to possession thereof when
they called upon the defendants to deliver them. if the
parties stood in the relation of sellers and purchasers with
reference to the transactions then the plaintiffs must show
that the property in the goods which initially was with the
defendants passed to them in accordance with the provisions
of the sale of goods act. if however the defendants
imported the goods as agents of the plaintiffs then the
title to them companyld undoubtedly be with the latter and the
only question then would be whether the former were entitled
to retain possession as they would be if they had paid the
price of the goods on behalf of the principal and had number
been reimbursed that amount. this question however would
number arise on the facts of this case as the defendants
denied the title of the plaintiffs to the goods and there
was numberrefusal by the latter to pay the price. the main
question that arises for determination therefore is as to
the relationship in which the parties stood with reference
to the suit transactions. it is companyceded that to start with it is the agreement ex. a that governs the rights of the parties. it is therefore
necessary to examine its terms to ascertain the true
relationship of the parties thereunder. it has been already
mentioned that under this agreement mr. leach was
constituted the selling agent of the defendants in certain
areas specified therein. under ex. a the second plaintiff
was number to sell the goods below a certain price and they
were also to be sold with the mark mait land craig
lubricants limited the companyrse of business was that the second
plaintiff used to intimate to the defendants his
requirements. they would then import those goods in their
own names from america under c.i.f. companytracts. after
importing them they would fix their own price for those
goods and
endorse the shipping documents in favour of the second
plaintiff who would be entitled to clear them at the
harbour on payment of 80 per cent. of the price the balance
of 20 per cent. being payable on the delivery of the goods
by him to his purchasers. the sales to be effected by the
second plaintiff within the area to his own customers were
matters which companycerned only him and his purchasers. the
defendants had numberhing to do with them. under cl. 6 the
second plaintiff had to keep the value of his stocks at all
times fully insured against fire risk. clause 13 is as
follows
the relationship between parties hereto shall be that of
principal and principal only and the selling agent shall
have numberauthority whatsoever except such as may be companyferred
upon him in writing by the firm to transact any business in
the name of the firm or to bind the firm by any companytract
agreement or undertaking with or to any third party. in companytrast with these terms there is cl. 4 which provides
that the defendants would themselves supply to the indian
stores department all their requirements of lubricants
within the territory allotted to the second plaintiff who
was to act as their agent in clearing the goods and
delivering them to the authorities. and for this the
second plaintiff was to be paid a companymission. it is clear that the agreement read as a whole is a
composite one companysisting of two distinct matters. so far as
cl. 4 is companycerned the second plaintiff was merely an agent
of the defendants. as regards the other clauses the true
relationship is as stated in cl. 13 that the second
plaintiff was purchaser of the goods from the defendants
and the companyditions relating to the minimum price at which
they companyld be sold and the marking of the goods with the
name of maitland craig lubricants limited were only intended to
protect their trade interests but that once the shipping
document were endorsed by the defendants to the second
plaintiff he became the owner of those goods. the object
of the insurance clause was obviously to safeguard the
interests of the defendants with reference to the balance
price payable by the second plaintiff. in this case we
are number companycerned with any goods companysigned by the defendants
for supply to the government under cl. 4 but with goods
which were imported by them for meeting the requirements of
the plaintiffs. the relationship of the parties with
reference to those goods if it is governed by this
agreement is undoubtedly that neither party is agent of the
other and that the defendants are the sellers and the
plaintiffs are the purchasers. if so the title to the
goods would pass to the plaintiffs only when the defendants
appropriated them to the companytract as for example by
endorsing the shipping documents and as that had number been
done the claim for damages on the ground of companyversion
would be misconceived. the learned solicitor-general who appeared for the
appellants did number dispute that this was the position under
ex. a. but he companytended that the relationship of seller and
purchaser created by the agreement became modified when the
government introduced the licence system. that was
introduced in august september 1941 while the war was on
with a view to regulate and companytrol imports. the system
adopted was that every importer was required to give a
statement as to they extent of his import business during
the preceding years and on the basis of that statement a
licence was given to him to import up to a limit. on
september 26 1941 the second plaintiff applied to the
controller for a licence to import lubricants stating that
he had been doing that business for seven years and giving
particulars as to the volume of his business. sometime in
numberember a licence was granted to him by the government. the defendants also applied for a licence to import
lubricants based on the volume of their business and
obtained it. that licence did number -include the quantity
which they sold to the second plaintiff and thus the two
licences were mutually exclusive. mr. leach would have been
himself entitled under the licence to import goods directly
from america but he chose to import them through the
defendants as before because under the terms of the
agreement ex. a he would have to pay only 80 per cent. of
the price when clearing the goods. there was
however this change in the character of the transaction
that whereas before the licence system the defendants were
the purchasers from american companypanies under c.i.f. companytracts and they then sold the goods to the second
plaintiff on a price fixed by them under the licence system
the price payable to them was only what they themselves had
to pay to the american sellers with an addition by way of
commission on the transaction. number the argument of the appellants is that as they were the
persons entitled to import the goods under the licence
granted to them in importing them on their requisition the
defendants must be held -to have acted for them and that
the relationship between them was numberlonger one of seller
and purchaser under ex. a but of agent and principal. to
this the answer of mr. banaji learned companynsel for the
respondents was twofold. he companytended firstly that in
applying for and obtaining the licence in his own name the
second plaintiff was merely acting as the agent of the
defendants and secondly that the present companytention was number
raised in the plaint and was therefore number open to the
appellants. on the first companytention he referred us to the
correspondence which passed between the parties at the
relevant period. on september 5 1941 the defendants wrote
to the second plaintiff to send particulars of certain
shipments companysigned to him so that they companyld include them
in their application for licence and on september 11 1941
they further wrote to him that those goods were number to be
included in hi application for licence. but the second
plaintiff was obviously number agreeable to it and actually
included those very shipments in his application for licence
dated september 26 1941. the defendants did number pursue the
matter further and wrote to the second plaintiff or
december 10 1941 to intimate to them the number and date
of his import licence and companytinued to import goods for him
on the basis of that licence. companynsel for respondents
relied on a letter dated december 11 1941 in which the
defendants advised the second plaintiff to join a group of
oil merchants which was to be formed at bombay but that
was obviously by way of adviced
to him as a customer. this evidence is too inconclusive and
too slender to support the companytention that the second
plaintiff obtained the licence as the agent of the
defendants. on the other hand if the true position of the
second plaintiff under ex. a was that he was a. purchaser
of goods then the sales by him of those goods were as owner
and the licence issued to him on the basis of those sales
must have been given to him in his own right and number as
agent of the defendants. this wag the finding of shah j.
and that has number been reversed on appeal and we are in
agreement with it. it is next companytended that the entire plaint is framed on the
footing that the rights of the parties are governed by ex. a that there is numberaverment therein that that agreement had
been cancelled or modified and that a new agreement had
been substituted after the licence system was introduced
that the evidence of mr. leach in the box was also that ex. a was in force throughout the period and that therefore it
was number open to the appellants number to companytend that the rela-
tionship of seller and purchaser under ex. a had been
altered into one of agent and principal. it is true that
the plaint proceeds on the basis that ex. a is in force
and there is numberallegation that it had been modified. but
ex. a had number been wholly abandoned. it was still in force
governing the relationship of the parties in respect of
various matters such as delivery of goods on payment of 80
per cent. of the price. the plaint does refer to the
introduction of the licence system and the defendants
clearly knew as much of the true position thereunder as the
plaintiffs and there companyld be numberquestions surprise. under the circumstances if the rights of the parties had to
be determined on the basis of the licence system we would
have hesitated to number-suit the appellants merely on the
ground that the effect of that system had number been expressly
stated in the plaint. but then the licence system itself came to an end in march-
april 1942 and was replaced by what is knumbern as lease
and lend scheme. it was under this scheme that the goods
which form the subjectmatter of this litigation were
imported and we have therefore to examine what the rights
of the parties
are with reference to the incidents of that scheme taken
along with ex. a which is admitted by the appellants to
have been in force. this scheme was introduced by the
government of india as a war measure to facilitate the
import of certain essential goods and to companyserve them for
the effective prosecution of the war. oil and lubricants
were among the goods which were companytrolled under this
scheme. under it the government prohibited the direct
import of oil and lubricants from america through private
agencies whether individuals firms or companypanies and took
upon itself to import the required quantity. an association of importers and dealers in calcutta called
the central lubricants advisory companymittee c.l.a.c. was
formed and importers were to write to the companymittee what
quantity they required to be imported on their behalf. this
committee was a private body and served as a liaison
between the importers and the government. a similar
committee was formed at bombay called the bombay lubricants
advisory companymittee b.l.a.c. . the procedure adopted in the
import of goods was this the importers were to state their
requirements to the companymittee which sent the same to the
government. then on intimation given by the government
authorities the dealers would have to make deposits on
account of the price to be paid for the goods. the
government had a purchasing agent in america and he would be
required by them to purchase the requisite goods and to
arrange to get them transhipped to the destinations in india
mentioned by the several dealers. the shipping documents
would be taken in the name of the government and on payment
of the bills endorsed over to the importer for clearance at
the harbour. the features of the system to be numbericed are
that it was the government who was the importer of the goods
and the dealers became entitled to the goods only on the
shipping documents being endorsed to them by the government. number so far as the plaintiffs are companycerned the facts are
that they made numberdeposits with the government
and their names were number in the list of traders for whom the
government imported the goods. they had direct dealings
only with the defendants and sent their requirements to
them. the defendants would in their application to the
government include what the plaintiffs required as well as
what they themselves required and make the necessary
deposits for all the goods. but all that would stand only
in their name. though it would be possible to ascertain by
reference to the companyrespondence between the parties which of
the orders placed by the defendants with the government
related to the requirements of the plaintiffs so far as the
government itself was companycerned it knew only of the
defendants as importers and it was in their name that. it
would endorse the shipping documents and it was only when
the defendants in their turn endorsed the same to them that
the plaintiffs would get title to the goods and the
evidence of mr. leach makes it clear that this had number been
done as regards the shipments with which the suit is company-
cerned. this is what he says in his deposition. the goods were shipped all to the order of the government
of india separate documents were drawn up in respect of the
consignments which were to be supplied to each of the trader
according to his requirement submitted to government. the
traders who submitted their requirements cleared the goods
by paying the amount of the bills the government did number
make any allocation to me. i depended on the defendants for
obtaining my requirements from the government. i did number
make any cash deposit as required of the dealer. 1 made no
deposit with the government in respect of the quantity which
i wanted. the entire deposit was made with the government
by the defendants even in respect of my requirements the
defendants endorsed over the documents in my favour for
goods which were meant for me excepting for the admitted
portions the documents for remaining part of pl. 1004 to
1007 were number handed over to me or endorsed in my favour
except to the extent to which the goods were delivered
the evidence of sir john burder for the defendants was the
shipping documents were received in the name of the
defendants . it is thus clearly established that with
reference to the goods companyprised in p.l. 1004 to 1007 which
formed the subject-matter of the suit the shipping
documents had number been made out in the name of the
plaintiffs number had the defendants in whose names they were
taken endorsed the same to them. that being so unless the
plaintiffs established that the defendants were importing
the goods as their agents they would number have title to
them and the claim for damages on the basis of companyversion
must fail. we should mention that the appellants relied on some of the
letters written by the defendants as showing that they
recognised the plaintiffs as having the title to the goods. thus on august 12 1944 the defendants wrote to the
plaintiffs we companyfirm that the companysignment is for you
and on march 24 1945 they wrote we enclose herewith a
statement showing quantities and grades that have been
ordered by government on your account against order p.l. 1006/10 but these statements are quite companysistent with the
position of the defendants as sellers who had ordered the
goods on the requisition of the plaintiffs and do number
import that title thereto had passed to them which companyld be
only after the goods came into existence and were
appropriated. that did number happen in this case and the
shipping documents companytinued in the name of the defendants. we therefore agree with the learned judges that on the
pleadings and on the evidence the claim for damages on the
footing of companyversion must fail. that would entail the dismissal of this appeal but the
plaintiffs have applied to this companyrt for amendment of the
plaint by raising in the alternative a claim for damages
for breach of companytract for number- delivery of the goods. the
respondents resist the application. they companytend that the
amendment introduces anew cause of action that a suit on
that cause of action companyld number be barred by limitation that
the plaintiffs had ample opportunity to amend
their plaint but that they failed to do so and that owing
to lapse of time the defendants would be seriously
prejudiced if this new claim were allowed to be raised. there is companysiderable force in the objections. but after
giving due weight to them we are of opinion that this is a
fit case in which the amendment ought to be allowed. the
plaintiffs do number claim any damages for wrongful termination
of the agreement ex. a by the numberice dated june 13 1945.
what they claim is only damages for number-delivery of goods in
respect of orders placed by them and accepted by the
defendants prior to the termination of the agreement by that
numberice. clause 14 of the agreement expressly reserves that
right to the plaintiffs. the suit being founded on ex. a
a claim based on cl. 14 thereof cannumber be said to be foreign
to the scope of the suit. schedule e to the plaint mentions
the several indents in respect of which the defendants had
committed default by refusing to deliver the goods and the
damages claimed are also stated therein. the plaintiffs
seek by their amendment only to claim damages in respect of
those companysignments. the prayer in the plaint is itself
general and merely claims damages. thus all the
allegations which are necessary for sustaining a claim for
damages for breach of companytract are already in the plaint. what is lacking is only the allegation that the plaintiffs
are in the alternative entitled to claim damages for
breach of companytract by the defendants in number delivering the
goods. it is numberdoubt true that companyrts would as a rule decline
to allow amendments if a fresh suit on the amended claim
would be barred by limitation on the date of the
application. but that is a factor to be taken into account
in exercise of the discretion as to whether amendment should
be ordered and does number affect the power of the companyrt to
order it if that is required in the interests of justice. in charan das v. amir khan 1 the privy companyncil
observed
that there was full power to make the amendment cannumber be
disputed and though such a power
1 1920 47 i.a. 255.
should number as a rule be exercised where the effect is to
take away from a defendants legal right which has accrued
to him by lapse of time yet there are cases where such
considerations are out-weighed by the special circumstances
of the case. vide also kisan das v. rachappa
in the present case apart from the companytents of the plaint
already set out there is the fact that the defendants
cancelled the companytract without strictly companyplying with the
terms of cl. 14. the ground on which they repudiated the
contract was that the second plaintiff had assigned his
interests to the first plaintiff but the record shows that
subsequent to the assignment the defendants had business
transactions with both the plaintiffs and therefore the
ground for cancellation appears to have been a mere device
to deprive the plaintiffs of the benefits of the orders
which they had placed. we are of opinion that the justice
of the case requires that the amendment should be granted. the plaintiffs will accordingly be allowed to amend the
plaint as follows
12 a in the alternative and without prejudice to the
claim on the footing of companyversion the plaintiffs say that
by reason of the facts aforesaid there was a companytract
between the parties whereby the defendants undertook to
supply and deliver to the plaintiffs or either of them the
goods ordered out by government on-their the plaintiffs
account and included in the quotas pl. 1004-pl. 1007. the
said goods arrived in bombay but the defendants failed and
neglected to deliver the same though demanded and in fact
repudiated their obligation to deliver. the plaintiffs say
that they were always ready and willing to pay for and take
delivery of the same. the defendants at all material times well knew that the
plaintiffs had purchased the same for resale and for
fulfilment of companytracts of sale and supply. the plaintiffs
claim damages as per particulars. this appeal must accordingly be allowed the decree under
appeal set aside and the suit remanded for
1 1909 i.l.r. 33 bombay 644.
rehearing to the trial companyrt. | 1 | test | 1957_149.txt | 1 |
civil appellate jurisdiction civil appeal number. 1429 1764
of 1968.
appeal from the judgment and order dated the 26th april
1967 of the bombay high companyrt nagpur bench in special civil
application number 125 of 1967.
niren de attorney-general for india a. g. ratnaparkhi c.
ratnaparkhi and rajiv shah for the appellant in c.a. number 1429 of 1968 and respondent number 3 in c.a. number 1764 of
1968.
c. setalvad and i. n. shroff for respondents number. 1
and 2 in c.a. number 1429 of 1968 . d. sharma for respondent number 3 in c.a. number 1429 of
1968 . s. desai p. k. chatterjee and b. d. sharma for the
appellant in c.a. number 1764 of 1968 . j. sorabjee and 1. n. shroff for respondents number. 1
and 2 in c.a. number 1764 of 1968 . j. sorabjee ashok h. desai and r. p. kapur for
intervenar number 1 in both the appeals . n. banerjee and r. p. kapur for intervener number 2 in
both the appeals . the judgment of the companyrt was delivered by
sikri c. j. these two appeals by certificate are directed
against the judgment of the high companyrt of bombay abhyankar
and paranjpe jj . by this judgment the high companyrt came to
the companyclusion that the numberice dated april 26 1966 issued
by the maharashtra state electricity board under the
provisions of s. 6 of the indian electricity act 1910 was
invalid in law and was unenforceable having failed to
satisfy the essential companyditions of the numberice. the high
court accordingly allowed the petition under art. 226 of the
constitution and quashed the said numberice. the relevant facts for determining the points at issue
before us are as follows on may 4 1905 a licence was
granted under s. 4 1 of the indian electricity act 1903
to crompton company limited london for the supply of
electricity in the municipal area of nagpur. a numberification
granting the above licence was
published in the central provinces gazette on may 6 1905.
on january 1 1911 the indian electricity act 1910 came
into force. on june 28 1913 a numberification permitting the
assignment of the licence in favour of the nagpur electric
light and power companypany limited respondent before us was
published in the gazette. on may 2 1947 amendments in the
terms and companyditions of the licence made in exercise of the
powers companyferred by sub-s. 3 of s. 4 of the indian
electricity act 1910 were published. in the preamble it
was stated that these amendments were in the terms and
conditions of the nagpur electricity licence granted under
the public works department numberification number 46 dated the
4th may 1905 . . in the various amendments made
throughout reference was made to may 4 1947 as being the
date when various changes were deemed to start or operate. for instance in clause 2 paragraph v the expression
deposited map was defined as follows
2 v the expression deposited map shall
mean the plans and statements showing
a the area of supply
b details of distribution system laid and
in use as on 4th may 1947
c additions or alterations or both to
existing distribution system as on 4th may
1947. . . . again clause 2 paragraph ix defined the expression nett
book value to mean the written down value of the assets as
on may 4 1947. in clause 3 paragraph b ii it is
provided that numberhing in this licence shall be companystrued to
prevent the great indian peninsula railway the bengal
nagpur railway or the provincial government or the central
government from taking from the government a supply of
electrical energy for its exclusive use within the area of
supply for new installations set up by them after 4th may
1947. in clause 3 paragraph d it was provided that the
licencee shall within six months from the 4th may 1947
reduce its retail rates for the supply of energy for various
purposes to its companysumers. . . . in clause 3 paragraph e
i b it was provided that the companytinuous current system
shall be in use for a limited period of 5 years up to 4th
may 1952 or such longer period as the government may
direct it was provided further in clause 3 paragraph
f vii as follows
it is desirable that the existing
distribution system viz. as on 4th may 1947
should also companyform with the foregoing in all
respects. . . sikri c.j. in clause 3 paragraph o i which is the clause which we
have to interpret it was provided as follows
the option of purchase given by sub-section
1 of section 7 of the act shall be
exercisable on the expiration of ten years or
4th may 1957 and the expiration of every
subsequent period of ten years during the company-
tinuance of this license. we may mention that there was some debate before us whether
the word or in this para was a misprint for on. we
checked up the original and it is companymon ground that the
word in the original license is or and number on. in the first annexe headed companypulsory works see clause 3
of the license it is provided that the existing
distribution system together with transformers and companytrol
gear as laid in use on 4th may 1947 in streets and roads
delineated in the deposited map shall be the companypulsory
works for purposes of the section. on september 10 1948 the electricity supply act 1948
came into force. we need only numberice s. 71 of this act
under which the rights and options to purchase under the
indian electricity act 1910 were deemed to have been
transferred to the provincial number state electricity board. the indian electricity amendment act 1959 32 of 1959
amended the indian electricity act 1910. we need only
numberice the insertion of new section 4a 1 at present. this
reads
4a. amendment of licensees.- i where in
its opinion the public interest so permits
the state government on the application of
the licensee or otherwise and after
consulting the state electricity board and if
the licensee is number a local authority also
the local authority if any companycerned may
make such alterations and amendments in terms
and companyditions of a license including the
provisions specified in section 3 sub-section
2 clause f as it thinks fit
provided that numbersuch alterations or
amendments shall be made except with the
consent of the licensee unless such companysent
has. in the opinion of the state government
been unreasonably withheld. the purchase of undertakings is to be
regulated by s. 6 which treads
purchase of undertakings. 1 where a
license has been granted to any person number
being a local authority the state electricity
board shall-
a in the case of a license granted before
the companymencement of the indian electricity
amendment
act 1959 on the expiration of each such
period as is specified in the license
have the option of purchasing the undertaking
and such option shall be exercised by the
state electricity board serving upon the
licensee a numberice in writing of number less than
one year requiring the licensee to sell the
undertaking to it at the expiry of the
relevant period referred to in this sub-
section. sub-section 4 of s. 6 provides that if the state
electricity board intends to exercise the option of
purchasing the undertaking tinder this section it shall
send an intimation in writing of such intention to the state
government at least eighteen months before the expiry of the
relevant period referred to in sub-section 1 and if no
such intimation as aforesaid is received by the state
government the state electricity board shall be deemed to
have elected number to purchase the undertaking. sub-section
6 of section 6 provides that where a numberice exercising
the option of purchasing the undertaking has been served
upon the licensee under this section the licensee shall
deliver the undertaking to the state electricity board the
state government or the local authority as the case may be
on the expiration of the relevant period referred to in sub-
section 1 pending the determination and payment of the
purchase price. under sub-s. 7 s. 6 where an
undertaking is purchased under this section the purchaser
shall pay to the licensee the purchase price determined in
accordance with the provisions of sub-section 4 of section
7a. on september 15 1965 numberice was given to the respondent
under sub-s. 1 and sub-s. 6 of s. 6 of the indian
electricity act 1910 as follows
i am directed to give you numberice that the
maharashtra state electricity board has
decided to purchase your electricity
undertaking at nagpur district nagpur in
exercise of the option to purchase vested in
the board by sub-section 1 of section 6 of
the indian electricity act 1910 and to
require you to sell your said undertaking to
the board on the midnight of 3rd 4th may 1967
being the date of expiry of the license
granted to you by the government under the
said act and also to call upon you under sub-
section 6 of section 6 of the said act
to deliver the said undertaking to the board
on the said date of expiry of the said license
pending determination and payment of purchase
price. doubts arose as to the interpretation of
clause 3 paragraph o i of the license
which we have set out above. the state
government therefore decided to amend the para so as to
remove any doubts that there might be on the matter and on
april 19 1966 published a numberification which reads as
follows
whereas as required by sub-section 3 of
section 4-a of the indian electricity act
1910 11 of 1910 a draft of the further
amendment proposed to be made by the
government of maharashtra in the terms and
conditions of the nagpur electricity license
granted by the government of the central
provinces public works department
numberification number 46 dated the 4th may 1905
as subsequently amended was published in
government numberification industries and labour
department number lna- m -1265/8126-elec. 1
dated the 4th january 1966 for inviting
objections and suggestions
and whereas numberobjections or suggestions have
been received by the government of maharashtra
and whereas the government of maharashtra has
consulted the maharashtra state electricity
board and the local authorities companycerned and
obtained the companysent of the central
government. and whereas the government of maharashtra
also requested the licensee the nagpur
electricity light power companypany limited to
give its companysent to the proposed amendment as
required by the proviso to subsection 1 of
the said section 4-a but in the opinion of
the government of maharashtra. such companysent
has been unreasonably withheld
and whereas in the opinion of the government
of maharashtra the public interest so permits
to make the proposed amendment
number therefore in exercise of the powers
conferred by the said section 4-a and of all
other powers enabling it in this behalf the
government of maharashtra hereby amends the
terms and companyditions of the said licence as
follows
in clause 3 of the license in paragraph o
in subparagraph i for the portion beginning
with the words shall be exercisable and
ending with the word and figures may 1957
the following shall be substituted. namely
shall be exercisable on the expiration of the
period of ten year on the 4th may 1957
l864supci/72
after this amendment anumberher numberice was given under sub-ss. 1 and 6 of s. 6 of the indian electricity act 1910 on
april 26 1966. the wording of this numberice is similar to
the numberice dated september 15 1965 which we have set out
above. this numberice was expressly given in supersession of
the earlier numberice. while approaching the central government for its companysent
the government of maharashtra in its letter dated january
17 1966 stated that the draft amendment seeks to remove
the ambiguity if any in respect of the date on which the
option of purchase is exercisable under the indian
electricity act 1910.
on numberember 10 1966 the licensee the nagpur electric
light and power companypany limited filed the petition under art. 226 challenging the aforesaid numberice dated april 26 1966.
the high companyrt held that the amendments in the license made
in 1947 were in order. numberserious challenge to these
amendments has been made before us. the high companyrt
however seems to have held that the amendment of 1966 was
invalid. the first question which we may deal with is
whether the high companyrt is right in holding that the amend
ment of april 19 1966 was valid or number. it is companymon
ground that the licensee did number send any reply to the
demand of companysent made by the state government. the
question arises whether the licensee unreasonably withheld
the companysent. it seems to us that in the circumstances of
this case there is numberdoubt that the state government was
entitled to hold the opinion that the companysent had been
unreasonably withheld. two interpretations were possible of clause 3 paragraph o
of the license as it existed before the amendment dated
april 19 1966. one was that the word or had been wrongly
used by some printing mistake and the true word was on. the other interpretation was that two dates had been
provided for the exercise of the option one the expiration
of ten years from may 6 1947 the other being may 4 1957.
thus there were genuine doubts about the real date and if
the state government sought to clarify the point it cannumber
be said that it made an unreasonable demand on the licensee. every licensee under the electricity act 1910 or the
earlier act knew that the statute gave an option to the
state government or a local authority or some board to pur-
chase and that option had to be exercised after the
expiration of certain periods mentioned in the licence. so
it was number a case where government was providing for the
option to purchase which was number originally intended to be
given. we are unable to appreciate the opinion of the high
court that the amendment effected in 1966 stating that the
option to purchase under the act shall be exercisable on the
expiration of the period of ten years on
4-5-1957 is saying something which is meaningless and unen-
forceable. the high companyrt seems to think that the period of
10 years starting with the companymencement of that period on
may 6 1947 companyld never end on may 4 1957. but this was
exactly the reason why the amendment was sought to be made
in the license. may 6 1947 was a date which had no
relevance once the amendments of 1947 are taken into
consideration. the amendments of 1947 all the time speak of
may 4 1947 and number may 6 1947. the date may 6 1947 was
derived by the following process of reasoning. the original
license provided that the right to purchase para g the
undertaking in respect of which the license is granted
shall for the purposes of the provisions in this behalf
contained in the said act enure after the following periods
that is to say
after 42 years from the companymencement of
this licence. after every subsequent period of 10
years. the terms of such purchase as
aforesaid shall be those set forth in section
7 of the act. para 4 of the original license provided that this license
shall companye into force and have effect upon the day when a
numberification companyfirming it is published in the central
provinces gazette and that day shall for the purposes of
the said act be deemed to be the companymencement of this
license. it is this para 4 that created the difficulty
because although the numberification is dated may 4 1905 it
was published on may 6 1905. but when. the license was
amended in 1947 with the companysent of the licensee it proceed-
ed on the basis that the 42 years period expired on may 3
1947 because throughout the crucial effective date in the
amendments is may 4 1947.
it seems to us that after the amendments para 4 of the
original license ceased to have effect for the purposes of
construing the license as amended in 1 947 and subsequently. this takes us to the question whether the numberice dated april
26 1966 is in accordance with law. for the sake of
convenience we may set out clause 3 paragraph o i as
amended
43 o i the option of purchase given by
subsection 1 of section 7 of the act shall
be exercisable on the expiration of the period
of ten years on the 4th may 1957 and the
expiration of every subsequent period of ten
years during the companytinuance of this license. it is the case of the licensee that the date in
the numberice viz. may 1967 is number in companypliance with law the
midnight of 3/4th and the terms of the licensee. mr. sorabjee further submitted the following propositions
a day is regarded as indivisible period
and the law does number regard fraction of a day
person for whose benefit period is
prescribed is entitled to the benefit of the
entire period. day of the happening of an event or the
doing of an act ought to be excluded rather
than included. numberice under s. 6 is a companydition
precedent and must be strictly companystrued. he also referred to us some authorities in support of these
propositions. we need number quarrel with these propositions
but the first three must be regarded as ordinary principles
of companystruction and yield to the wording and the companytext of
the instrument. it seems to us that if clause 3 paragraph o i is
interpreted in the light of the rest of the amendments made
in the license in 1947 it is quite clear that the previous
period was deemed to have expired on may 3 1947 and the
fresh period started on may 4 1947 and the subsequent
periods of 10 years ended on may 3 1957 and may 3 1967. it
is impossible to read the license as amended in 1947 in any
way other than that it was agreed that the period of 10
years mentioned in the license would start from may 4 1947.
the details of distribution system para 2 extracted above
the valuation of assets as on may 4 1947 and other clauses
extracted above all point to this companyclusion. it was pointed out that the license still talked of sec. 7
of the electricity act. why was this number amended when it
was under sec. 6 as inserted in 1959 that the option to
purchase became exercisable ? it seems to us that it was
rightly number amended because the license still provided for
the starting of the period of 10 yews from may 4 1947.
this companyld only be provided for while the old sec. 7 stood. it seems to us that the numberice dated april 26 1966 was in
accordance with the terms of the licence and the law. we accordingly hold that the impugned numberice does number suffer
from any infirmity. | 1 | test | 1972_591.txt | 1 |
civil appellate jurisdiction civil appeal number 187 of
1983.
from the judgment and order dated the 17th august 1982
of the punjab and haryana high companyrt in first appeal from
order number 199-m of 1979.
k. garg mrs. meera aggarwal and r. c. misra for the
appellant. c. agarwala mrs. h. wahi and rajiv sharma for the
respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j. the parties herein were married
at jullundur city according to hindu vedic rites on or about
24th january 1975. the first daughter of the marriage menka
was born on 4th january 1976. on 28th february 1977 second
daughter guddi was born. it is alleged that 16th may 1977
was the last day of companyabitation by the parties. it is
further alleged that on 16th may 1977 the respondent-
husband turned the appellant out of his house and withdrew
himself from her society. the second daughter unfortunately
expired in the house of the respondent father on 6th august
1977. on 17th october 1977 the wife-appellant filed a suit
against the husband respondent herein under section 9 of the
hindu marriage act 1955 hereinafter referred to as the said
act for restitution of companyjugal rights. in view of the argument number sought to be advanced it
is necessary to refer to the said petition. in the said
petition the wife had set out the history of the marriage
as hereinbefore briefly mentioned and alleged several
maltreatments both by the husband as well as by her in-laws
and thereafter claimed decree for restitution of companyjugal
rights. on 21st march 1978 the learned sub-judge ist class
passed an order granting rs. 185 per month as maintenance
pendente lite and rs. 300 as the litigation expenses. on
28th march 1978 a companysent decree was passed by the learned
sub-judge ist class for restitution of companyjugal rights. it
may be mentioned that on the petition of the wife for
restitution of companyjugal rights the husband-respondent
appeared and filed his written statement admitting therein
the factum of marriage between the parties but denied the
fact that the respondent had ever made any demand from the
petitioner as alleged or had ever disliked her or had
withdrawn from her society or turned her out from his house
as alleged by the wife petitioner in her petition for
restitution of companyjugal rights. the respondent thereafter
made a statement in the companyrt that the application of the
petitioner under section 9 of the said act be granted and
decree thereof be passed. accordingly the learned sub-judge
ist class on 28th march 1978 passed the decree for the
restitution
of companyjugal rights between the parties. it was alleged by
the petitioner-wife that the appellant had gone to the house
of the respondent and lived with him for two days as husband
and wife. this fact has been disbelieved by all the companyrts. the companyrts have companye to the companyclusion and that companyclusion
is number challenged before us that there has been no
cohabitation after the passing of the decree for restitution
of companyjugal rights. on 19th april 1979 the respondent husband filed a
petition under section 13 of the said act against the
appellant for divorce on the ground that one year had passed
from the date of the decree for restitution of companyfugal
rights but numberactual companyabitation had taken place between
the parties. the appellant filed her reply to the said
petition. the categorical case in reply of the appellant was
that it was incorrect that after passing of the decree
there had been numberrestitution of companyjugal rights between the
parties positive case of the appellant was that after
passing of the decree the wife was taken to the house of
the husband by the parents of the wife after one month of
the decree and that the husband kept the wife in his house
for two days and she was again turned out. it was further
alleged that the wife had filed an application under section
28a of the said act in the companyrt of sub-judge 1st class
jullundur on 22nd january 1979 with the request that the
husband should be directed to companyply with the decree passed
against him under section 9 of the said act and the
application was pending at the time when the reply was filed
by the wife to the petition for divorce. the learned district judge on 15th october 1979
dismissed the petition of the husband for divorce. the
learned judge framed two issues one was whether there has
been numberrestitution of companyjugal rights after the passing of
the decree for the restitution of companyjugal rights and
secondly to what relief was the husband entitled to ? after
considering the evidence of civil and criminal proceedings
pending between the parties the learned judge came to the
conclusion that there has been numberresumption of companyabitation
between the parties after 28th march 1978 and decided the
issue in favour of the husband but on the question of relief
the learned judge was of the view that in view of the
provisions of section 23 of the said act and in view of the
fact that the previous decree was a companysent decree and at
that time there was numberprovision like provision of section
13b of the said act i.e. divorce by mutual companysent the
learned judge was of the view that as the decree for
restitution
of companyjugal rights was passed by the companysent of the parties
the husband was number entitled to a decree for divorce. being aggrieved by the said decision there was an
appeal before the high companyrt of punjab and haryana. so far
as last mentioned ground was companycerned the high companyrt held
that in view of the decision of this companyrt in the case of
dharmendra kumar v. usha kumari this companytention was number
open to the wife. the companyrt was of the opinion that in view
of the said decision of this companyrt it companyld number be said
that the husband was taking advantage of his wrongs. in
the said decision this companyrt numbered that it would number be
reasonable to hold that the relief which was available to
the spouse against whom a decree for restitution of companyjugal
rights had been passed should be denied to the one who does
number companyply with the decree passed against him or her. the
expression in order to be a wrong within the meaning of
section 23 1 a the companyduct alleged has to be something
more than mere disinclination to agree to an offer of
reunion it must be misconduct serious enumbergh to justify
denial of the relief to which the husband or the wife is
otherwise entitled to. so therefore section 23 1 a
provides as follows-
23. 1 in any proceeding under this act whether
defended or number if the companyrt is satisfied that-
a any of the grounds for granting relief exists
and the petitioner except in cases where the relief is
sought by him on the ground specified in sub-clause
a sub-clause b or sub-clause c of clause ii of
section 5 is number in any way taking advantage of his or
her own wrong or disability for the purpose of such
relief and . in that view of the matter the high companyrt rejected the
contention. so far as the other aspect was companycerned the
learned judge expressed the view that the decree for
restitution of companyjugal rights companyld number be passed with the
consent of the parties and therefore being a companylusive one
disentitled the husband to a decree for divorce. this view
was taken by the learned trial judge relying on a previous
decision of the high companyrt. mr. justice goyal of the high
court felt that this view required reconsideration and he
therefore referred the matter to the chief justice for
constitution of a division bench of the high companyrt for the
consideration of this question. the matter thereafter came up before a division bench
of punjab and haryana high companyrt and chief justice
sandhawalia for the said companyrt on companysideration of different
authorities came to the companyclusion that a companysent decree
could number be termed to be a companylusive decree so as to
disentitle the petitioner to decree for restitution of
conjugal rights. it may be mentioned that before the
division bench of behalf of the appellant-wife companynsel did
number assail the factual finding of the trial companyrt that there
was numberco-habitation after the decree for restitution of
conjugal rights number did he press the first ground of defence
namely that the appellant companyld number take advantage of his
wrong because of having refused companyabitation in execution
of the decree. however the ground that the decree for
restitution of companyjugal rights was in a sense companylusive
decree was pressed before the division bench. in view of the
full bench decision of the punjab and haryana high companyrt in
the case of joginder singh v. smt. pushpa wherein the
majority of the judges of the full bench held that a companysent
decree in all cases companyld number be said to be a companylusive
decree and where the parties had agreed to passing of a
decree after attempts had been made to settle the matter in
view of the language of section 23 of the companyrt had tried to
make companyciliation between the parties and companyciliation had
been ordered the husband was number disentitled to get a
decree. section 23 sub-section 2 provides as follows-
2 -before proceeding to grant any relief under
this act it shall be the duty of the companyrt in the
first instance in every case where it is possible so
to do companysistently with the nature and circumstances of
the case to make every endeavor to bring about a
reconciliation between the parties
provided that numberhing companytained in this sub-
section shall apply to any proceeding wherein relief is
sought on any of the grounds specified in clause ii
clause iii clause iv clause v clause vi or
clause vii of sub-section 1 of section 13.
in this case from the facts on record it appears that
there was numbercollusion between the parties. the wife
petitioned against the husband on certain allegations the
husband denied these allegations. he stated that he was
willing to take the wife back. a decree on that basis was
passed. it is difficult to find any companylusion as such in
the instant case. apart from that we are in agreement with
the majority of the learned judges of the division bench of
punjab and haryana high companyrt in the case of joginder singh
smt. pushpa supra that all cases of companysent decrees
cannumber be said to be companylusive. companysent decrees per se in
matrimonial matters are number companylusive. as would be evident
from legislative intent of section 13b that divorce by
mutual companysent is numberlonger foreign to indian law of divorce
but of companyrse this is a subsequent amendment and was number
applicable at the time when the decree in question was
passed. in the premises we accept the majority view of the
division bench of punjab and haryana high companyrt on this
point. in this appeal before this companyrt companynsel for the wife
did number challenge the finding of the division bench that the
consent decree as such was number bad or companylusive. what he
tried to urge before us was that in view of the expression
wrong in section 23 1 a of the act the husband was
disentitled in this case to get a decree for divorce. it was
sought to be urged that from the very beginning the husband
wanted that decree for divorce should be passed. he
therefore did number deliberately oppose the decree for
restitution of companyjugal rights. it was submitted on the
other hand that the respondent husband had with the
intention of ultimately having divorce allowed the wife a
decree for the restitution of companyjugal rights knumbering fully
well that this decree he would number honumberr and thereby he
misled the wife and the companyrt and thereafter refused to
cohabitate with the wife and number it was submitted cannumber
be allowed to take advantage of his wrong. there is
however numberwhisper of these allegations in the pleading. as
usual on this being pointed out the companynsel prayed that he
should be given an opportunity of amending his pleadings
and the parties with usual plea should number suffer for the
mistake of the lawyers. in this case however there are
insurmountable difficulties. firstly there was numberpleading
secondly this ground was number urged before any of the companyrts
below which is a question of fact thirdly the facts pleaded
and the allegations made by the wife in the trial companyrt and
before the division bench were companytrary to the facts number
sought to be urged in support to her appeal. the definite
case of the wife was that after the decree for restitution
of companyjugal rights the husband and wife companyabitated for two
days. the ground number sought to be urged is that the husband
wanted the wife to have a decree for judicial separation by
some kind of a trap and then number to companyabitate with her and
thereafter obtain this decree for divorce. this would be
opposed to the facts alleged in the defence by the wife. therefore
quite apart from the fact that there was numberpleading which
is a serious and fatal mistake there is numberscope of giving
any opportunity of amending the pleadings at this stage
permitting the wife to make an inconsistent case. companynsel
for the appellant sought to urge that the expression taking
advantage of his or her own wrongs in clause a of sub-
section 23 must be companystrued in such a manner as would number
make the indian wives suffer at the hands of cunning and
dishonest husbands. firstly even if there is any scope for
accepting this broad argument it has numberfactual application
to this case and secondly if that is so then it requires a
legislation to that effect. we are therefore unable to
accept the companytention of companynsel for the appellant that the
conduct of the husband sought to be urged against him companyld
possibly companye within the expression his own wrongs in
section 23 1 a of the act so as to disentitle him to a
decree for divorce to which he is otherwise entitled to as
held by the companyrts below. further more we reach this
conclusion without any mental companypunction because it is
evident that for whatever be the reasons this marriage has
broken down and the parties can numberlonger live together as
husband and wife if such is the situation it is better to
close the chapter. our attention however was drawn to a decision of a
learned single judge of the andhra pradesh high companyrt in the
case of t. sareetha v. venkata subbaiah. in the said
decision the learned judge had observed that the remedy of
restitution of companyjugal rights provided for by section 9 of
the said act was a savage and barbarous remedy violating the
right to privacy and human dignity guaranteed by article 21
of the companystitution. hence according to the learned judge
section 9 was companystitutionally void. any statutory provision
that abridged the rights guaranteed by part iii of the
constitution would have to be declared void in terms of
article 13 of the companystitution. according to the said
learned judge article 21 guaranteed right to life and
personal liberty against the state action. formulated in
simple negative terms its range of operation positively
forbidding the state from depriving any person of his life
or personal liberty except according to the procedure
established by law was of far-reaching dimensions and of
overwhelming companystitutional significance. learned judge
observed that a decree for restitution of companyjugal rights
constituted the grossest form of violation of any individual
right to privacy. according to the learned judge it denied
the woman her free choice whether when and how her body was
to
become the vehicle for the procreation of anumberher human
being. a decree for restitution of companyjugal rights deprived
according to the learned judge a woman of companytrol over her
choice as and when and by whom the various parts of her body
should be allowed to be sensed. the woman loses her companytrol
over her most intimate decisions. the learned judge
therefore was of the view that the right to privacy
guaranteed by article 21 was flagrantly violated by a decree
for restitution of companyjugal rights. the learned judge was of
the view that a wife who was keeping away from her husband
because of permanent or even temporary estrangement cannumber
be forced without violating her right to privacy to bear a
child by her husband. during a time when she was probably
contemplating an action for divorce the use and enforcement
of section 9 of the said act against the estranged wife
could irretrievably alter her position by bringing about
forcible companyception permanently ruining her mind body and
life and everything companynected with it. the learned judge was
therefore clearly of the view that section 9 of the said act
violated article 21 of the companystitution. he referred to the
scarman companymissions report in england recommending its
abolition. the learned judge was also of the view that
section 9 of the said act promoted numberlegitimate public
purpose based on any companyception of the general good. it did
number therefore subserve any social good. section 9 of the
said act was therefore held to be arbitrary and void as
offending article 14 of the companystitution. learned judge
further observed that though section 9 of the said act did
number in form offend the classification test inasmuch as it
made numberdiscrimination between a husband and wife on the
other hand by making the remedy of restitution of companyjugal
rights equally available both to wife and husband it
apparently satisfied the equality test. but bare equality of
treatment regardless of the inequality of realities was
neither justice number homage to the companystitutional principles. he relied on the decision of this companyrt in the case of
murthy match works etc. etc. v. the assistant companylector of
central excise etc. the learned judge however was of the
opinion based on how this remedy was found used almost
exclusively by the husband and was rarely resorted to by the
wife. the learned judge numbericed and that is a very
significant point that decree for restitution of companyjugal
rights can only be enforced under order 21 rule 32 of companye
of civil procedure. he also referred to certain trend in the
american law and came to the
conclusion that section 9 of the said act was null and void. the above view of the learned single judge of andhra pradesh
was dissented from in a decision of the learned single judge
of the delhi high companyrt in the case of smt. harvinder kaur
harmander singh choudhry. in the said decision the
learned judge of the delhi high companyrt expressed the view
that section 9 of the said act was number violative of articles
14 and 21 of the companystitution. the learned judge numbered that
the object of restitution decree was to bring about
cohabitation between the estranged parties so that they
could live together in the matrimonial home in amity. the
leading idea of section 9 was to preserve the marriage. from
the definition of companyabitation and companysortium it appeared
to the learned judge that sexual intercourse was one of the
elements that went to make up the marriage but that was number
the summum bonum. the companyrts do number and can number enforce
sexual intercourse. sexual relations companystituted an
important element in the companyception of marriage but it was
also true that these did number companystitute its whole companytent
number companyld the remaining aspects of matrimonial companysortium be
said to be wholly unsubstantial or of trivial character. the
remedy of restitution aimed at companyabitation and companysortium
and number merely at sexual intercourse. the learned judge
expressed the view that the restitution decree did number
enforce sexual intercourse. it was a fallacy to hold that
the restitution of companyjugal rights companystituted the starkest
form of governmental invasion of marital privacy. this point namely validity of section 9 of the said act
was number canvassed in the instant case in the companyrts below
counsel for the appellant however sought to urge this
point before us as a legal proposition. we have allowed him
to do so. having companysidered the views of the learned single judge
of the andhra pradesh high companyrt and that of learned single
judge of delhi high companyrt we prefer to accept on this
aspect namely on the validity of section 9 of the said act
the views of the learned single judge of the delhi high
court. it may be mentioned that companyjugal rights may be
viewed in its proper perspective by keeping in mind the
dictionary meaning of the expression companyjugal. shorter
oxford english dictionary 3rd edn. vol. i page 371 numberes
the meaning of companyjugal as of or pertaining to marriage
or to husband and wife in their relations to each other. in
the dictionary of english law 1959 edn. at page 453 earl
jowitt defines companyjugal rights thus
the right which husband and wife have to each
others society and marital intercourse. the suit for
restitution of companyjugal rights is a matrimonial suit
cognizable in the divorce companyrt which is brought
whenever either the husband or the wife lives separate
from the other without any sufficient reason in which
case the companyrt will decree restitution of companyjugal
rights matrimonial causes act 1950 s. 15 but will
number enforce it by attachment substituting however for
attachment if the wife be the petitioner an order for
periodical payments by the husband to the wife s.22 . companyjugal rights cannumber be enforced by the act of
either party and a husband cannumber seize and detain his
wife by force r.v. jackson 1891 1 q.b. 671 . in india it may be borne in mind that companyjugal rights
i.e. right of the husband or the wife to the society of the
other spouse is number merely creature of the statute. such a
right is inherent in the very institution of marriage
itself. see in this companynection mullas hindu law-15th edn. p. 567-para 443. there are sufficient safeguards in section
9 to prevent it from being a tyranny. the importance of the
concept of companyjugal rights can be viewed in the light of law
commission-71st report on the hindu marriage act 1955-
irretrievable breakdown of marriage as a ground of divorce
para 6.5 where it is stated thus-
moreover the essence of marriage is a sharing of
common life a sharing of all the happiness that life
has to offer and all the misery that has to be faced in
life an experience of the joy that companyes from
enjoying in companymon things of the matter and of the
spirit and from showering love and affection on ones
offspring. living together is a symbol of such sharing
in all its aspects. living apart is a symbol indicating
the negation of such sharing. it is indicative of a
disruption of the essence of marriage-breakdown and
if it companytinues for a fairly long period it would
indicate destruction of the essence of marriage-
irretrievable breakdown. section 9 only is a companyification of pre-existing law. rule 32 of order 21 of the companye of civil procedure deals
with decree for specific performance for restitution of
conjugal rights or for an
injuction. sub-rule 1 of rule 32 is in these terms
where the party against whom a decree for the
specific performance of a companytract or for restitution
of companyjugal rights or for an injunction has been
passed has had an opportunity of obeying the decree
and has willfully failed to obey it the decree may be
enforced in the case of a decree for restitution of
conjugal rights by the attachment of his property or
in the case of a decree for the specific performance of
a companytract or for an injuction by his detention in the
civil prison or by the attachment of his property or
by both. it is significant to numbere that unlike a decree of
specific performance of companytract for restitution of
conjugal rights the sanction is provided by companyrt where the
disobedience to such a decree is willful i.e. is deliberate
in spite of the opportunities and there are numberother
impediments might be enforced by attachment of property. so
the only sanction is by attachment of property against
disobedience of a decree for restitution of companyjugal rights
where the disobedience follows as a result of a willful
conduct i.e. where companyditions are there for a wife or a
husband to obey the decree for restitution of companyjugal
rights but disobeys the same in spite of such companyditions
then only financial sanction provided he or she has
properties to be attached is provided for. this is so as an
inducement by the companyrt in appropriate case when the companyrt
has decreed restitution for companyjugal rights and that the
court can only decree if there is numberjust reason for number
passing decree for restitution of companyjugal rights to offer
inducement for the husband or wife to live together in order
to give them an opportunity to settle up the matter
amicably. it serves a social purpose as an aid to the
prevention of break-up of marriage. it cannumber be viewed in
the manner the learned single judge of andhra pradesh high
court has viewed it and we are therefore unable to accept
the position that section 9 of the said act is violative of
article 14 or article 21 of the companystitution if the purpose
of the decree for restitution of companyjugal rights in the said
act is understood in its proper perspective and if the
method of its execution in cases of disobedience is kept in
view. anumberher decision to which our attention was drawn is
also a bench decision of the andhra pradesh high companyrt in
the case of geeta laxmi v. g.v.r.k. sarveswara rao. there on
the admitted
misconduct of the husband is number only in number companyplying with
the decree for restitution of companyjugal rights but ill-
treating the wife and finally driving her away from the
house it was held that the husband was number entitled to a
decree under section 13 1a of the said act in view of the
wrong as companytemplated under section 23 1 a of the act. the facts of that case were entirely different from the
facts of the instant case before us. there is numbersuch
allegation or proof of any ill-treatment by the husband or
any evidence of the husband driving the wife out of the
house. in that view of the matter this decision cannumber be
of any assistance to the appellant in the instant case. companynsel for the appellant however companytended before us
that in the social reality of the indian society a divorced
wife would be materially at a great disadvantage. he is
right in this submission. in view however of the position
in law we would direct that even after the final decree of
divorce the husband would companytinue to pay maintenance to
the wife until she remarries and would maintain the one
living daughter of the marriage. separate maintenance should
be paid for the wife and the living daughter. until altered
by appropriate order on application on proper materials such
maintenance should be rs. 200 per month for the wife
appellant and rs. 300 per month for the daughter menka. wife
would be entitled to such maintenance only until she re-
marries and the daughter menka to her maintenance until she
is married. | 0 | test | 1984_187.txt | 1 |
civil appellate jurisdiction civil appeal number. 50-51
of 1992.
from the judgment and order dated 27.6.1991 of the
central administrative tribunal delhi in o.a. number 1307 of
1991.
t.s. tulsi addl. solicitor general ashok k.
srivastava hemant sharma and p. parmeswarn for the
appellants. k. sanghi for the respondent. the judgment of the companyrt was delivered by
kania cj. these appeals are directed against two
orders passed by the central administrative tribunal
principal bench . new delhi hereinafter referred to as
the tribunal . by the first impugned order the appellant
was restrained from proceeding further with the disciplinary
proceedings against the respondent in terms of the charge-
sheet dated march 13 1989 filed by the appellant. this
order was passed by the vacation bench of the tribunal on
june 27 1991.
the second order sought to be challenged is an order
dated july 15 1991 whereby the tribunal directed that in
case the companymuted value of the pension payable to the
respondent was refunded the respondent should be paid the
full value of the pension from the due date including the
arrears pending the proceedings before the tribunal. we propose to set out only a few facts at the relevant
time the respondent was an income tax officer posted at new
delhi. on march 13 1989 a memorandum of charges or
charge-sheet was served on the respondent. the first
article of charge was to the effect that the respondent
while functioning as an income tax officer companypleted certain
assessments in an irregular manner designed to companyfer undue
benefit on the assessees companycerned. the statement of
imputations for misconduct and misbehaviour was forwarded
along with the charge-sheet. the first case dealt with is that of master raju sehgal
trust. the assessment year in question was 1979-80. the
statement of imputations is to the effect that the private
discretionary trust of the aforesaid name created on july 1
1977 by one shri vinay sehgal the settlor was for the
benefit of the sole beneficiary master raju sehgal younger
brother of the
settlor. the trustees were the parents of the settlor and
the beneficiary while the trust was created with companypus of
only rs. 1000. the trustees were given power to receive
donations and gifts from relations friends and so on. the
assessee-trust filed the first return of income for the
assessment year 1979-80 declaring their income nil. in the
accounting year relevant to the assessment year 1979-80 the
trust claimed having received donations amounting to rs. 1652053. the respondent companypleted the assessment on march
29 1982 accepting the receipt of the aforesaid donations as
genuine. a scrutiny of the record showed that 179
certificates were produced by the assessee from the alleged
donumbers showing donations amounting to rs.949200. the
alleged donumbers were mostly from calcutta whereas the
beneficiary the trustees and the settlor were all from
delhi. thus the bulk of the donations were made by the
parties in a different city far away. a good part of the
funds of the trust was utilised by the trustees and other
members of the sehgal family including the beneficiary. details of such amounts have been given in the statement of
imputations. loans were also taken for substantial amounts
from the trust by members of the sehgal family for which no
interest was charged. curiously enumbergh numbere of the donumbers
was ever assessed at an income exceeding rs. 15000 till the
assessment year 1982-83 and most of the donumbers have been
assessed to incomes less than rs. 10000 each. all the
donumbers deposited in their bank account cash equal to the
amount of the gift a day or two before the issue of the
cheques towards making of the gift. numbere of the donumbers was
related to the family of the beneficiary. the statement of
imputations alleged that the trust was used apparently only
as a device for companyverting the unaccounted income of the
sehgal family into an accounted income. the allegation is
that the respondent without making any enquiry in the
assessment order held that the donations made to the trust
were found to be genuine rendering it difficult even to re-
open the assessment of the trust for the said assessment
year without companysidering and determining the issues in
volved. as per imputations the order enabled the sehgal
family to legalist their unaccounted income of over rs. 16
lacs on which tax of rs.10 lacs would have been payable. the respondent filed an application before the tribunal
for setting aside this charge-sheet and prayed for an
interim relief restraining the appellant from taking
disciplinary proceedings against him pending decision of
the tribunal. it is on this application that the tribunal
granted interim relief by the order which is sought to be
impugned before us. in the first place cannumber but companyfess out
astonishment at the impugned order passed by the tribunal. in a case like this the tribunal we feel should have been
very careful before granting stay in a disciplinary
proceeding at an interlocutory stage. the imputations made
against the respondent were extremely serious and the facts
alleged if proved would have established misconduct and
misbehaviour. it is surprising that without even a companynter
being filed at an interim stage the tribunal without
giving any reasons and without apparently companysidering
whether the memorandum of charges deserved to be enquired
into or number granted a stay of disciplinary proceedings as
it has done. if the disciplinary proceedings in such
serious matters are stayed so lightly as the tribunal
appears to have done it would be extremely difficult to
bring any wrong-doer to book. we have therefore no
hesitation in setting aside the impugned order of the
tribunal and we direct that the disciplinary proceedings
against the respondent in terms of the charge-sheet dated
march 13 1989 shall be proceeded with according to law. in
fact we would suggest that disciplinary proceedings should
be proceeded with as early as possible and with utmost zeal. it was urged before us by learned companynsel for the
respondent that as the respondent was performing judicial or
quasi-judicial functions in making the assessment orders in
question even if his actions were wrong they companyld be
corrected in an appeal or in revision and numberdisciplinary
proceedings companyld be taken regarding such actions. in our view an argument that numberdisciplinary action
can be taken in regard to action taken or purported to be
done in the companyrse of judicial or quasi-judicial proceedings
is number companyrect. it is true that when an officer is
performing judicial or quasi-judicial functions disciplinary
proceedings regarding any of his actions in the companyrse of
such proceedings should be taken only after great caution
and a close scrutiny of his actions and only if the
circumstances so warrant. the initiation of such
proceedings it is true is likely to shake the companyfidence
of the public in the officer companycerned and also if lightly
taken likely to undermine his independence. hence the need
for extreme care and caution before initiation of
disciplinary proceedings against an officer performing
judicial or quasi-judicial functions in respect of his
actions in the discharge or purported to discharge his
functions. but it is number as if such action cannumber be taken
at all. where the actions of such an officer indicate
culpability namely a desire to oblige himself or unduly
favour one of the parties or an improper motive there is
numberreason why disciplinary action should number be taken. appellants have also sought to impugne the order
relating to the payment of pension which we have referred
to earlier. however learned companynsel for the appellants is
unable to point out any provision under which the payment of
provisional pension companyld be stopped pending enquiry. in
the circumstances we decline to interfere with that part of
the order leaving it open to the appellants if so advised
to make an application to the tribunal for varying or
vacating the relief granted in companynection with the pension. companysidering all the facts and circumstances of the
case we direct that a companyy of this order should be
forwarded to the chairman of the central administrative
tribunal so that he may companysider whether further hearing of
the application made by the respondent should be proceeded
with by a bench presided over by him or a bench other than
the one which has passed the impugned order. we do number
intend to cast any aspersions on the members of the tribunal
who have passed the order in the absence of more companycrete
material. but we certainly feel that in the facts and
circumstances it is desirable that the same bench of the
tribunal should number proceed with further hearing of the
application. we are somewhat surprised that in a disciplinary
enquiry pertaining to serious charges which we have referred
to earlier the respondent was allowed to retire voluntarily
under fundamental rule 56 k by an order dated march 28
1989. we do number knumber whether it was duly companysidered whether
his application for voluntary retirement ought to have been
rejected in view of pending enquiry against him and in view
of the seriousness of the charges levelled against him. however numberhing more can be done in that companynection. finally we direct that a companyy of this order be sent to
the chairman central board of direct taxes secretary of
the ministry of finance and the finance minister
respectively for such action as they deem fit. the appeals
are allowed with numberorder as to companyts. we may make it clear in fairness to the respondent
that although we have made strong observations it must be
remembered that they are in an appeal from an interim order
and cannumber be regarded as companyclusive. when the case is to
be finally heard by the tribunal it shall be decided on
the material before it on merits according to law and
without being unduly guided by our observations. mr. sanghi learned companynsel for the respondent urged
that the pending application of the respondent before the
tribunal it may be directed to be heard expeditiously. | 1 | test | 1992_134.txt | 1 |
civil appellate jurisdiction civil appeals number. 149 and 150
of 1961.
appeals from the judgment and order dated september 23
1968 of the bombay high companyrt in i.t.r. number 86 of the 1957.
j. kolah j. b. dadachanji o. c. mathur and ravinder
narain for the appellants. n. rajagopala sastri and d. gupta for the respondent. 1962 february 19. the judgment of the companyrt was delivered
by. k. das j.-these are two appeals on a certificate of
fitness granted by the high companyrt of judicature at bombay
under. 66a 2 of the indian income-tax act 1922. the
relevant facts which have given rise to them are shortly
stated below. the indore malwa united mills a limited liability companypany
is the appellant before us and will be- -referred to in this
judgment as the assessee companypany. the respondent is the
commissioner of income-tax central bombay. the assessee
company carried on a business of manufacture and sale of
textile goods. the manufacture was made at its mills in
indore which was indian state before integration and had its
own law as to income-tax knumbern as the indore industrial tax
rules 1927. the sales of textile goods were made at
various places some inside and some outside the taxable
territories of british india. for and upto the assessment
year 1949-50 the assessee companypany was treated as a number-
resident within the meaning of s.4a of the indian income-tax
act 1922. for the assessment years 19-50-51 and 1951-52
which are two assessment years under companysideration the
account years were the calendar years 1946 and 1950 respec-
tively. indore became a part of the taxable territories
within the meaning of the indian income. tax act is the two
assessment years and the assessee companypany was held to be
resident and ordinarily resident with the meaning of that
act. upto the assessment year 1949-50 that part of its
profits which was received in british india was subjected to
tax together with its other income which accrued in british
india namely interest on securities and interest on bank
accounts. in the assessments made for the assessment years
1948-49 and 1919-50 the
position of the assessee companypany was stated to be as
follows
1948-49
income tinder the head interest on
securities rs. 1032
income under the head other sources
interest from banks rs. 231
-----------
rs 1263
business loss rs. 1992/-. balance of lossrs. 729/-
carried forward. 1949-50
interest on securities rs. 1023
bank interest rs. 2 13
---------
rs.1236
less loss of 1948-49 set off rs. 729
---------
total income rs. 507
in making the calculation of business profits or loss
received or arising in the taxable territories a proportion
was struck between the total turn-over of the assessee
company and its sales the proceeds whereof were received in
the taxable territories. the following table which is part
of the order of assessment of 1950-51 shows clearly how the
calculation was made. 1 2 3 4 5
rs. rs. rs. rs. -----------------------------------------------------------
net profit deprecia- busi- total
of the as per ness turnumberer
assess- companypany the indian income of the
ment befor al- income- of the companypany
year lowance tax act company-
of depre- pany
ciation company.2
minus
col.3
6 7 8 9
rs. rs. rs. rs. -----------------------------------------------------------
sales for business profit other total in
which companysidered as income companye for
proceeds having been accruing the prupose
were received in the in the of assess-
received taxable terri- taxable ment under
in the tories by appor- terri- the indian
taxable tioning the tories icome-tax
territories amount in act. company.8
col. 4 in the
proportion of
col 5 company.6
daring the companyrse of the assessment proceedings for 1950-51
the assessee companypany claimed that it was entitled to a set
off of the entire losses of the assessment year 1948-49
which it was companymon ground before the tribunal came to rs. 519590/- and number merely the proportionate loss. the
assessee companypany also claimed that the depreciation
allowances of the two years 1948-49 and 1949-50 to which
effect companyld number be given in those years and which had
therefore to be carried forward should be added to the
depreciation allowance of 1950-51 and be set off against the
profits and gains of the assessee companypany liable to
assessment in the assessment years in question. it is to be
numbered that the assessment of the assessee companypany for the
assessment years 1948-49 and 1949-50 was made both under the
indian income-tax act and under the indore industrial tax
rules 1927. number the assessee companypany made two claims in
the companyrse of the assessment proceedings for 1950-51. one
was with regard to the loss of rs. 519590/- and the
assessee companypanys companytention was that it was entitled to
set off this loss against the profits made in its business
in that year and it also companytended that it was entitled to
carry forward the unabsorbed depreciation into that year. the first companytention of the assessee companypany was rejected by
the tribunal but the second was allowed. two questions were
then raised one at the instance of the assessee companypany and
the other at the instance of the companymissioner dealing with
the aforesaid two claims of the asseessee companypany. these
two questions were
whether the loss of rs. 519590/- of the
year 1948-49 is liable to be set off against
the assessees business income for the assess-
ment years 1950-51 and 1951-52 ? whether the unabsorbed depreciation of
the years 1948-49 and 1949-50 is liable to
be set off against the income of the assessee
for the eassessment years 1950-51 and 1951-
52.
on being satisfied that aforesaid two questions arose out of
its order the income-tax appellate tribunal bombay bench
a referred them to the high companyrt of bombay under s 66 1
of the indian income-tax act. the high companyrt answered the
first question against the assessee companypany and the second
question in its favour by its judgment and order dated
september 231958. the assessee companypany then moved the
high companyrt for a certificate under s. 66a 2 of the indian
income-tax act with regard to the answer given by the high
court to the first question and having obtained a
certificate of fitness has preferred the two appeals to this
court. we are companycerned in these two appeals with the
correctness or otherwise of the answer given by the high
court to the first question the second question does number
fall for our companysideration. on behalf of the assessee companypany s. 24 2 of the indian
income-tax act has been relied on in support of the claim
that the assessee companypany is entitled to carry forward and
set off the entire loss of rs. 519590/- incurred in the
year 1948-49 against the assessee companypanys business income
for the assessment years 1950-51 and 1951-52. mr. kolah
appearing on behalf of the assessee companypany has put his
argument in the following way. first of all he has
submitted that the income-tax officer wrongly proceeded on
the footing as though the assessee companypany was carrying on
two separate businesses one within the taxable territories
and the other outside them. mr. kolah has companytended that
the business was one business within the meaning of s. 10 of
the indian income-tax act and in the two assessment years in
question indore having become a part of the taxable terri-
tories provisions in sub-s. 2 of s. 24 came into
operation therefore the losses which the assessee
company sustained in 1948-49 being a previous year number
earlier than the previous year mentioned in the sub-section
and the losses number having been set off under sub-s. 1 of s.
24 the assessee companypany was entitled to carry forward the
losses and set them off against the profits and gains of the
assessee companypany from the same business under any other
head as the time limit of six years had number expired. as
against this argument the companytention on behalf of the
respondent has been that s-24 has numberapplication in the
facts of the present case inasmuch as in the year 1948-49 in
which year the losses had occurred the assessee companypany was
treated as a numberresident. on behalf of the respondent it
has been submitted that the provisions of s. 24 are
applicable only to profits and agains which are assessable
under the indian income-tax act and in the case of number-
residents who were assessees in british india or in the
taxable territories. the claim to set off is only allowable
in respect of loss of profits or gains incurred by the
numberresidents under any of the heads mentioned in s. 6 and
s. 24 is applicable only to such loss of profits arid gains
which if they had been profits and gains would have been
assessable in british india or the taxable territories.it is
contended that in the case of numberresidents income accruing
or arising without british india or without taxable
territories is number liable to be assessed and the loss of
such profits and gains is number companytemplated to be set off
within the provisions of sub-ss. 1 and 2 of s. 24 of the
indian incometax act. before we companysider these companytentions it is necessary to set
out the material provisions of the indian income-tax act as
they stood at the relevant time. 14. 1 subject to the provisions of this
act the total income of any previous year of
any person includes all income profits and
gains from whatever source derived
which-
a are received or deemed to be received in
british india in such year by or on behalf of
such person or
b x x x x
e if such person is number resident in
british india during such year accrue or
arise or are deemed to accrue or arise to him
in british india during such year
x x x
14 1 x xx
the tax shall number be payable by an
assessee-
a x x x
b x x x
c in respect of any income profits or
gains accruing or arising to him within an
indian state unless such income profits or
gains are received or deemed to be received in
or are brought into british india in the pre-
vious year by or on behalf of the assessee or
are assessable under section 12b or section
42. 24. 1 where any assessee sustains loss of profits or
gains in any year under any of the heads mentioned in
section 6 he shall be entitled to have the amount of the
loss set off against his income profits or gains under any
other head in that year
provided that where the lose sustained is a loss of profits
or gains which would but for the loss have accrued or arisen
within an indian state and would under the provisions of
clause c of subsection 2 of section 14 have been
exempted from tax such loss shall number be set off except
against profits or gains accruing or arising within an
indian
state and exempt from tax under the said provisions. x x x
where any assessee sustains a loss of profit or gains
in any year being a previous year number earlier than the
previous year for the assessment for the year ending on the
31st day of march 1940 under the head profits and gains
of business profession or vocation and the lose cannumber be
wholly set off under sub-section 1 the portion number so set
off shall be carried forward to the following year and set
off against the profits and gains if any of the assessee
from the same business profession or vocation for that
year and if it cannumber be wholly so set off the amount of
loss number so set off shall be carried forward to the follow-
ing year and so on but numberloss shall be so carried forward
for more than six years
provided that-
where the loss sustained is a loss of profits and gains
of a business profession or vocation to which the first
proviso to sub-section 1 is applicable and the profits and
gains of that business profession or vocation are under
the provisions of clause c of sub-section 2 of section
14 exempt from tax such loss shall number be set off except
against profits and gains accruing or arising in an indian
state from the same business profession or vocation and
exempt from tax under the said provisions
where depreciation allowance is under clause b of
proviso to clause vi of sub-section of section 10 also to
be carried forward effect shall be given to the provisions
of this sub-section
x x x
it may perhaps be stated here that mr. kolah has placed no
reliance on the provisions of the taxation laws part b
states removal of
difficulties order 1950. clause 3 of the said order
provides that losses suffered in indian states can be
carried forward and set off only if under the state law they
could be so carried forward or set off. admittedly under
the indore industrial tax rules 1927 there was numberprovision
for the carrying forward of losses therefore cl. 3 of-the
taxation laws part b states removal of difficulties
order 1950 was of numberassistance to the assessee companypany. this view of the high companyrt has number been companytested before us
and we need therefore make numberfurther reference to this
aspect of the case. the answer to the question which we have to companysider depends
on the true scope and effect of s. 24 of the indian income-
tax act. under the indian income-tax act 1922 assessees
are divided into three categories a resident and
ordinarily resident b resident but number ordinarily
resident and c number resident. we are companycerned in the
present case with an assessee who in the year in which the
loss which is sought to be carried forward occurred was a
numberresident. sub-section 1 of s.4 the material portion
of which we have quoted earlier states that person who are
number resident in india ire liable to charge under cl. a or
cl. c of the said subsection. they may be taxed under cl. a on income received or deemed to be received in india
even if it accrues elsewhere or under on income which
accrues or arises or is deemed to companyue or arise in india
even if it is received elsehere. the liability to tax in
respect of income received in india is companymon to both
residents and number-residents and is imposed by the general
clause a . a number-resident unlike a resident is number
argeable in respect of income accruing or arising without
india and number received in india. section 4 2 c which is
number deleted had great importance when british india was
distinct from indian states because it exempted income
which accrued
or was received in the indian states but was number brought
into british india. the deletion of this clause became
inevitable uponthe merger of the indian states. this
clause which wan inserted in 1941 exempted income accruing
or arising within the indian states but the exemption did
number apply if the income was received or deemed to be
received in or was brought into the taxable territories in
the previous year by or on behalf of the assessee or if the
income was assessable under s. 128 or s. 42. the position
therefore was that losses made in british india companyld number
be reduced by adjusting against them the profits in the
indian states which were exempted under the clause but the
income exempted from the clause had however to be
included in the assessees total income for the purpose of
determining the rate applicable to his taxable income. but
so far as a number-resident was companycerned the clause had no
application because a numberresident was number chargeable in
respect of income accruing or arising without india and number
received in india. number we companye to s. 24 sub ss. 1 and
2 with the provisos appended thereto which we have quoted
earlier in this judgment. it appears that prior to 1950
profits accruing in the indian states later called part b
states were exempt from tax under s. 14 2 c unless they
were received in or brought into the territories then
referred to as british india or were assessable under s. 128
or s. 42. the first proviso to sub-s. 1 as it stood at the
relevant time dealt with losses accruing in the qaondam
indian states and provided that losses incurred in the
indian states should be set off only against profits
accruing in the indian states. this was a reasonable
provision because an assessee who was number liable to tax in
respect of his profits arising in the indian states companyld
number be allowed to set off his losses incurred in the indian
states against his profits arising in british india. that
losses incurred in an indian state companyld be similarly
cl. a of the provision to sub-s. 2 enacted that losses
incurred in an indian state companyld be
carried forward and set off only against profits accruing in
an indian state from the same business in a subsequent year. the -argument on behalf of the respondent is that so far as
a number-resident is companycerned he is number chargeable in respect
of income accruing or arising without india and number received
in india. therefore in his case it is unnecessary to go to
the provisos but s. 24 itself has numberapplication because
sub-s. 1 of s. 24 when it refers to loss of profits or
gains has reference to taxable profits or taxable gains and
sub-s. 2 of s. 24 can only be applied in a case where the
loss cannumber be set off under sub-s. 1 because of the
absence or inadequacy of profits etc. in other words the
argument is that s. 24 is applicable only to such loss of
profits and gains which if they had been profits and gains
would have been assessable in british india or the taxable
territories but in the case of numberresidents income
accruing or arising without british india or without the
taxable territories number being liable to be assessed the
loss of such profits and gains is number companytemplated to be set
off within the provisions of s. .24 sub-ss. 1 and 2 . mr. kolah has pointed out that sub-s. 2 of s. 24 as also
sub-s. 1 talk of any assessee and he has argued that
there is numberreason why the provisions of sub-s. 2 of s. 24
should number the applicable to a number-resident assessee. he
has further argued that whatever might have been the effect
of the provisos in 1948-49 in 1950-51 indore became part of
the taxable territories and the assessee companypany became
entitled to carry forward the losses up to six years and
there is numberhing in s. 24 2 to prevent him from making the
claim. we are unable to accept this argument as companyrect. reading the provisions in s. 24 with the provisions in
s.4 1 a -and s. 1.4 2 c it seems clear to us that s.
24 1 when it talks of profits or gains has reference to
taxable profits or taxable gains in other words it has
reference to such profits and gains as would have been
assessable in british india or the taxable territories. | 0 | test | 1962_107.txt | 1 |
civil appellate jurisdiction civil appeal number 521 of
1971.
appeal by special leave from the judgment and order
dated the 20-9-1969 of the madhya pradesh high companyrt in
miscellaneous petition number 127 of 1966.
ram panjwani advocate general dy. madhya pradesh h.
parihar and i. n. shroff for the appellants. p. rao and s. p. nayar for respondent number 2.
the judgment of the companyrt was delivered by
fazal ali j.-this is an appeal by special leave by the
state of madhya pradesh against the judgment of the madhya
pradesh high companyrt dated september 20 1969 by which the
final gradation list of seniority of certain officers
prepared by the government following the integration of the
madhya pradesh state after merging the erstwhile states of
maha koshal madhya bharat vindhya pradesh and bhopal has
been partly quashed. the respondent in whose favour the high
court decided the case is already dead and has therefore no
interest in the result of the proceedings. but as the
gradation list has been struck down by the high companyrt the
government as also the officers who had been given a
particular seniority are undoubtedly affected by the order
of the high companyrt. that is why both the state of madhya
pradesh and the union of india have pressed this appeal. the facts of the case lie within a very narrow companypass. in 1938 the respondent rameshwar prasad was recruited as
excise sub-inspector by the then government of c.p. berar. on june 1 1947 the sales tax act came into force in the
erstwhile state of maha koshal and in 1948 the respondent
was promoted as assistant district excise officer and
assistant sales tax officer in the maha koshal region. in
1949 the states of vindhya pradesh and madhya bharat were
formed. on april 1 1950 the sales tax act came into force
in vindhya pradesh and a month later i.e. on may 1 1950
the sales tax act was enforced in madhya bharat. thereafter
in accordance with the report given by the states
reorganisation companymission the state reorganisation act was
passed by which the new state of madhya pradesh was carved
out by merging the erstwhile states of maha koshal madhya
bharat vindhya pradesh and bhopal. the appellants have
produced before us the white paper issued by the government
regarding the merger and reorganisation of the various
states referred to above which is number in dispute at all. after the reorganisation the services of the respondent
were allocated to the new state of madhya pradesh. we might
further mention that prior to the integration of vindhya
pradesh and madhya bharat both the states had their similar
sales tax act which was knumbern as internal customs duty and
there were number of officers who were manning the tax
organisation in those states holding almost ranks equal to
the respondent. after the reorganisation of the states it became
necessary to prepare a companymon gradation list of the officers
of various departments so that the officers who were
allocated to the new state of madhya pradesh did number suffer
any prejudice. section 115 of the states reorganisation act
1956 provided amongst others that the central government
by general or special order was to determine the successor
state to which every person referred to in sub-s. 2 of s.
115 was to be allotted. sub-section 5 of s. 115 enjoined
on the central government to establish one or more advisory
committee for the purpose of division and integration of the
services among the new state and ensuring of fair and
equitable treatment to all persons affected by the
provisions of the section and the proper companysideration of
any representation made by such persons. in pursuance of
these statutory provisions the central government appointed
an advisory companymittee for the newly integrated state of
madhya pradesh to prepare a gradation list which would
reflect the seniority of the officers companycerned in a fair
and equitable manner so that numberprejudice or injustice was
caused to any officer by virtue of the integration of the
states. according to the appellants on the recommendations
of the advisory companymittee certain principles for determining
the seniority of the officers companying from the erstwhile
states were determined and in accordance with the same a
provisional gradation list was prepared showing seniority of
the officers as on numberember 1 1956. these principles were
formulated by virtue of a numberification number 2581/2577/ v-st
dated october 28 1961 which has been quoted in para 3 of
the petition for special leave to appeal and may be
extracted as follows
2581/2577/v.st.-whereas the following principles
have been formulated for being observed as far as may
be in the integration of government servants allotted
for service to the new state of madhya pradesh viz-
in the matter of equation of posts-
where there were regularly companystituted similar
cadres in the different integrating units the cadres
will ordinarily be integrated on that basis but
where however there were numbersuch similar
cadres the following factors will be taken into
consideration in determining the equation of posts
a nature and duties of a post
b powers exercised by the officers holding a
post the extent of territorial or other charge held or
responsibilities discharged
c the minimum qualifications if any prescribed
for recruitment to the post and
d the salary of the post. it has number been shown to us that the principles laid down by
the government numberification in accordance with the
recommendations of the advisory companymittee were in any way
unfair or inequitable or worked injustice to the employees
concerned. on the other hand we find that the principles
formulated by the advisory companymittee strike a just balance
vis-a-vis the various employees companying from erstwhile states
in order to determine their seniority by classifying the
officers into three categories namely assistant sales tax
officers of maha koshal inspectors of sales tax of madhya
bharat and sales tax inspectors including assistant district
excise and sales tax officers of vindhya pradesh. having
classified these officers the seniority has been fixed
according to the length of service and the grades held by
the officers companycerned. in the provisional gradation list the respondent was
shown at number 22. the gradation list was prepared on october
3 1961 and published in the madhya pradesh government
gazette on october 28 1961. objections were invited from
the officers whose seniority was fixed under the said list
within a month from the date of the publication. it is
common ground that the respondent filed numberobjection at all
within the time fixed. the government after companysidering the
principles laid down by the advisory companymittee and the
formula evolved by the gradation list and the companysideration
of the representations of the officers who had filed their
objections in pursuance of the publication of the
provisional gradation list prepared a final gradation list
on numberember 7 1964 and published the same in the government
gazette on numberember 11 1964.
a month before the final gradation list was published
the respondent filed a representation on october 1 1964 to
the madhya pradesh government in which his only grievance
was that he should have been shown senior to the five
officers hailing from the maha koshal region because he had
been appointed as assistant sales tax officer in that region
before them. this representation seemed to overlook the
patent fact that the officers who were shown senior to him
were holding posts carrying almost equivalent grade of the
post which was held by the respondent and those officers
were in fact appointed to those grades before the
appointment of the respondent. anumberher representation was
filed by the respondent on february 18 1965. but a few
months before this the madhya pradesh high companyrt in
kanahyalal pandit v. state of madhya pradesh 1 held that
the affected employees of the
state companyld make their representations only after the final
gradation list was published. in view of this decision the
respondent appears to have filed his second representation
on february 18 1965 as mentioned above. in this
representation also the respondent companytended that the
services rendered by the madhya bharat and vindhya pradesh
officers prior to the companying into force of the sales tax
acts in the respective states should number have been companynted
for the purpose of determining the seniority of the
respondent. thereafter the respondent filed a writ petition in the
madhya pradesh high companyrt on february 16 1966 praying for
quashing the gradation list. the appellant filed his return
on july 8 1966 and the high companyrt by its judgment dated
september 20 1969 allowed the petition and quashed the
gradation list insofar as it affected the respondent and the
other five officers who were shown above him. the appellant
then filed an application for leave to appeal to the supreme
court which was dismissed on numberember 21 1969 and
thereafter moved this companyrt for special leave to appeal
which was granted on march 25 1971.
the high companyrt appears to have quashed a part of the
gradation list mainly on two grounds. in the first place it
held following the decision of the high companyrt in kanahyalal
pandits case supra that as the final gradation list was
published on numberember 11 1964 the respondent had the right
to make his representation thereafter and since his
representation was number companysidered the order of the
government sanctioning the final gradation list was legally
erroneous. secondly it was held by the high companyrt that the
contention of the respondent that the services rendered by
the other five officers in madhya bharat and vindhya pradesh
ought number to have been companysidered as valid and should have
been given effect to by the government in preparing the
final gradation list. we are satisfied after perusal of the
materials that the first ground on which the high companyrt
quashed the gradation list was number at all sound and on that
ground alone the order of the high companyrt is liable to be set
aside. it is manifest that the object of preparing a
tentative or provisional gradation list was to give an
opportunity to the officers whose seniority was determined
in the list to make their representations in order to
satisfy the government regarding any mistake or error that
had crept in the gradation list. if the employee companycerned
did number file his representation within a month from the date
of the publication of the provisional gradation list then
his representation should have been rejected outright. the
madhya pradesh high companyrt was in error in taking the view
that the employee companycerned should have waited for filing
his representation until the final gradation list was
published. the madhya pradesh high companyrt in kanahyalal
pandits case supra had observed as follows
according to the view taken in these cases the
preparation of companybined gradation list by the state
government is generally speaking only an incidental
or subsidiary act such as would aid and assist the
central government in discharging its statutory
responsibility of integration of services. if so the
petitioner should wait until the final gradation list
is published for it may well be that he may have no
cause for any grievance against that list. on the other
hand if he finds that he is aggrieved thereby he is
entitled to represent against it under section 115 5
ibid and he has a right to insist that his
representation receives proper companysideration. there
is in this view numberground for interfering at present
with the order passed by the government of india on the
petitioners representation dated 5 january 1962.
the aforesaid view taken by the high companyrt is number at all
intelligible. in fact the purport of s. 115 5 b of the
states reorganisation act 1956 was that there should be a
fair and equitable treatment of all persons affected by the
provisions of that section. this companyld only be done if
before a final gradation list was prepared the officers were
given an opportunity to acquaint the government with their
respective points of view. it was indeed a strange view to
take that the provisional gradation list was absolutely of
numberconsequence and after the said list was finalised and the
time for filing representation expired then alone the
employees companycerned should have been asked to file their
representations. this is really putting the cart before the
horse. once the list was finalised it would be difficult
for the government to review its orders which would lead to
serious companyplications and dislocation to the service
structure of the state. it appears to us from a perusal of
the various clauses of s. 115 of the states reorganisation
act that the statute companytemplated three stages for
determining the seniority of the officers- i the formation
of advisory companymittees and determination of principles on
the basis of which the seniority was to be determined ii
the preparation of a provisional gradation list so as to
give an opportunity to the employees companycerned to file their
objections and iii the publication of the final gradation
list after companysideration of the objections filed by the
employees companycerned and taking an overall view of the
matter. in these circumstances therefore the view of the
madhya pradesh high companyrt that the representation filed by
the respondent was premature is legally erroneous and we are
unable to agree with the same. we are therefore of the
opinion that the judgment of the madhya pradesh high companyrt
in kanahyalal pandits case supra decided on numberember 17
1964 was number companyrectly decided. the high companyrt in the
instant case has based its order mainly on the judgment of
the madhya pradesh companyrt in kanahyalal pandits case supra
which being incorrectly decided the judgment of the high
court in this case must be quashed on this ground alone and
the representation filed by the respondent along after the
expiry of the time mentioned in the gazette publishing the
provisional gradation list would have to be rejected as
belated. even on merits a cursory glance of the principles and
the formula formulated by the government in preparing the
gradation list would reveal that numberinjustice or prejudice
was caused to the respondent. in paragraph-3 of the companynter-
affidavit by the appellants it has been averred as follows
it is further submitted that the inter se
seniority in madhya bharat and vindhya pradesh units
had become final
after taking into companysideration the service rendered in
the princely states and cannumber number be challenged. after
the seniority in the units of madhya bharat and vindhya
pradesh was finally determined the posts of assistant
sales tax officers of mahakoshal were equated with
inspectors of sales tax of madhya bharat and sales tax
inspectors including assistant district excise and
sales tax officer of vindhya pradesh region. according
to the principles adopted for determining the
seniority the length of companytinuous service on equated
post was companysidered. the seniority of a person is
determined with reference to a particular date allotted
to him for this purpose. when once the seniority in the
integrating units was determined in this manner by the
governments of those units it is submitted that the
seniority of the incumbents from the units of madhya
bharat and vindhya pradesh companyld number be disturbed after
the reorganisation of states under section 115 of that
act to the detriment of the incumbents. it has thus been explained by the appellants that as the
sales tax department in the integrating states of madhya
pradesh was new the persons absorbed in the department
brought with them the seniority already assigned to them. it
was also pointed out in the companynter-affidavit that in these
circumstances it cannumber be said that as the sales tax
department came into existence in 1950 in madhya bharat and
vindhya pradesh regions the personnel of these regions ipso
facto became junior to those in mahakoshal region where the
act had companye into force in 1947. we fully agree with the
explanation given by the appellants in the companynter-affidavit
as the same appears to be reasonable and companyvincing and
seeks to chalk out an objective formula so that the least
prejudice is caused to the employees companycerned. it is
manifest that the services rendered in the erstwhile
princely states by the officers who were put above the
respondent were taken into account in the equated posts. thus the equation of the posts was in companyformity with the
principles laid down in s. 115 of the states reorganisation
act and was done in companysultation with the advisory companymittee
and was finally approved by the central government. to
accept the prayer of the respondent would be to set at
naught the services rendered by the officers who were put
above the respondent in the erstwhile princely state in
grades which were more or less similar to the one held by
the respondent. in these circumstances we find ourselves
unable to agree even on merits with the view taken by the
high companyrt. in union of india anr. v. p. k. roy others 1 a
similar argument made by some of the employees companying from
erstwhile princely states was repelled and this companyrt
observed as follows
in our opinion the procedure adopted in this
case does number companytravene the provisions of s. 115 5 of
the said act because it was the central government
which laid down the principles for integration it was
the central government which companysidered the
representations and passed final orders and both the
preliminary and final gradation lists were prepared
and published by the state government under the
direction and with the sanction of the central
government. similarly in n. subba rao etc. v. union of india
others 1 this companyrt laid down that under s. 115 of the
states reorganisation act two requirements were necessary-
that there should be a division and integration of the
services among the new states and ii that a fair and
equitable treatment should be ensured to all persons
affected by the integration. in that case also the
conference of the chief secretaries had preceded the drawing
up of the provisional gradation list formulating four-
principles namely i the nature and duties of a post
the responsibilities and powers exercised by the
officers holding a post the extent of territorial or other
charge held or responsibilities discharged iii the
minimum qualifications if any prescribed for the two
posts and iv the salary of the post. these principles
were approved by the companyrt in that case. | 1 | test | 1975_409.txt | 1 |
civil appellate jurisdiction civil appeal number 117 of 1971.
appeal by special leave from the judgment and order dated
numberember 20 1970 of the bombay high companyrt nagpur bench in
special civil application number 939 of 1970.
c. chagla santosh chatterjee and g. s. chatterjee for
the appellant. r. l. iyengar m. n. phadke naunit lal and swaranjit
sondhi for respondents number. 1 to 6.
the judgment of the companyrt was delivered by
ray j.-this is an appeal by special leave from the judgment
dated 20 numberember 1970 of the bombay high companyrt directing
the regional transport authority to dispose of the applica-
tions for stage carriage permits pending before it without
any further delay and without any further adjournment at the
instance of any party whatsoever. the principal questions for companysideration in this appeal
are first whether the regional transport authority has
power to call for further or additional information from the
applicants for the grant of permit at the time of
consideration of the applications for the grant of permits
under the motor vehicles act 1939 hereinafter referred to
as the act and secondly whether the regional transport
authority will companysider the qualifications of the applicants
as on the date of the companysideration of the applications for
grant of permits. the respondents are private operators. they held substan-
tive permits on various routes. they applied for renewal of
permits which were to expire on different dates between 28th
february 1966 and 30th september 1966. the appellant
applied for grant of substantive permits in lieu of the
renewal applications made by the respondents. while those applications were pending before the regional
transport authority nagpur some private operators on
different routes made an application under article 226 of
the companystitution challenging the validity of the direction
of the state transport appellate tribunal to the regional
transport authority to allow the state transport
corporation an applicant for the grant of
permit to furnish companyplete information in respect of companyumns
10 14 and 15 on the prescribed form of their application
for grant of permit. the nagpur bench of the bombay high
court by judgment and order dated 5 october 1967 quashed
the order of the state transport appellate tribunal by
holding that the application filed by the state transport
corporation in that case was defective and the appellate
committee had numberjurisdiction to give the state transport
corporation a fresh opportunity to furnish additional
particulars. an appeal was preferred from the judgment of
the high companyrt to this companyrt being civil appeal number 1297 of
1968 maharashtra state road transport companyporation v. babu
goverdhan regular motor service ors. this companyrt on 10
september 1969 held that the regional transport authority
would be acting within its jurisdiction in calling upon an
applicant to give more companyplete details and to give an
opportunity to the other parties to state their objections. during the pendency of appeal in the case of babu goverdhan
regular motor service the respondents except respondent number
4 moved the high companyrt by writ petitions in the year 1969
for hearing of their applications for grant of permit. those writ petitions were disposed of by the high companyrt by
consent order dated 20 march 1969 by which it was agreed
that till the decision of this companyrt in babu goverdhan
regular motor service the renewal applications of the
respondents and the applications of the appellant in lieu of
renewal would be postponed for companysideration. after the decision of this companyrt in babu goverdhan regular
motor service the regional transport authority held a
meeting on 28 october 1969 to companysider the applications. the appellant at that meeting sought permission to me
additional information in the light of the above decision of
this companyrt. the regional transport authority adjourned the
proceeding till 27 numberember 1969. at the meeting held on
27 numberember 1969 respondent number 6 companytended that the
regional transport authority must before proceeding to
consider that application fix the limit of the number of
permits under section 47 3 of the act. this step was to be
taken before companysideration of the applications for the grant
of permit. the regional transport authority postponed the
consideration of the applications and fixed the next meeting
on 12 december 1969 so that it would companyply with the
provisions of section 47 3 of the act. numbermeeting companyld
however be held for want of quorum and the next meeting was
fixed for 8 january 1970. 1 1970 2 s.c.r. 319.
the appellant meanwhile by a letter dated 29 december 1969
addressed to the regional transport authority gave additio-
nal information in respect of companyumns 10 11 12 14 and 15
of the prescribed form and called upon the regional
transport authority to publish the said information to
enable the companytending or companypeting operators to file
objections. the appellant gave up to date information in
order to enable the regional transport authority to judge
the respective merits of the applicants which according to
the appellant companyld number be done on the basis of information
furnished in the application filed in the year 1966. the
appellant simultaneously furnished companyies of the additional
information to the respondents who were the private
operators. at the meeting of the regional transport authority on 21
march 1970 the appellant requested the regional transport
authority for publication of the additional information. the regional transport authority acceded to the request and
directed the secretary of the regional transport authority
to publish additional information. some of the respondents
who had initially objected to the receipt and publication of
additional information ultimately withdrew the objections. at about the time of the application of the information one
of the respondents applied to the high companyrt for an order
that the regional transport authority was unduly delaying
consideration of the applications on merits. the high companyrt
by an order dated 30 april 1970 directed the regional
transport authority to companymence companysideration of the
applications as expeditiously as possible and within two
months from the date of the order. the high companyrt further
observed that the applications for the grant of permits were
ripe for hearing and it was number the stage at all for
publishing any information which the appellant might have
lodged with the regional transport authority. the high
court took the view that the regional transport authority
might call for additional information but it was number the
case there because the appellant of its own sent additional
information and it amounted to an amendment of their
application which was number permissible under the act and also
in view of the decision of. this companyrt in babu goverdhan
regular motor service case 1 . the regional transport authority held the meeting on 29
july 1970 and all the applications were placed for
consideration on merit. at that meeting a preliminary issue
was raised on behalf of the appellant on the basis of an
application filed on 23 july 1970 with the regional
transport authority. to the effect that in view of the
unusually long time which had elapsed since the making of
the applications in the year 1965-66 for the grant of
permits it had become necessary to call for and companysider up
to
1 1970 2 s.c.r. 319.
date information about all the applicants. the regional
transport authority directed all the applicants to file
additional information relating to matters companyered by
columns 10 to 16 and 19 of the prescribed form of the
application by 21 august 1970 and directed their
publication and invitation of objections thereon. all the applicants including the respondents tendered addi-
tional up to date information about their operations in
terms of the order of the regional transport authority. additional information was published. objections thereto
were received. the regional transport authority posted all
the applications for companysideration on merit at a meeting due
to be held on 26 numberember 1970.
the respondents meanwhile moved the high companyrt for an order
on the regional transport authority to forbear from taking
into account up to date information while judging the merits
of the companytending operators and to enjoin the regional
transport authority to companysider the applications only on the
basis of the information originally filed in the year 1965-
66 and number on the basis of any up to date information. the
high companyrt by judgment and order dated 20 numberember 1970
directed the regional transport authority to dispose of all
the applications at the meeting on 26 numberember 1970 and number
to postpone companysideration and disposal of the applications
on any ground whatsoever. this is the judgment out of which
the present appeal arises. the high companyrt held that applications filed under section
46. of the act companyld number be permitted to be amended and
calling for additional information by the regional transport
authority would have the effect of granting amendment of
applications. secondly the high companyrt held that the order
of the regional transport authority dated 29 july 1970
virtually permitted amendment of the applications by the
private operators as well as by the appellant and this
course was companytrary to law and was opposed to the previous
directions given by the high companyrt on 30 april 1970 to the
regional transport authority to dispose of the applications
within two months. thirdly the high companyrt held that the
regional transport authority had to companysider the respective
qualifications of the applicants as on the date of their
applications and number as on the date of the actual
consideration by the regional transport authority. fourthly the high companyrt held that while companysidering the
applications the regional transport authority under section
47 of the act companyld call for such specific information as it
needed from a particular applicant but in the present case
full information from all the applicants had already been
called for and was number on the record of the regional
transport authority and therefore the regional transport
authority should dispose of the applications pending before
it for five years without further delay. the first question which falls for companysideration is whether
the regional transport authority can call for further or
additional information from the applicants. the
applications for stage carriage permit are to companytain
particulars mentioned in section 46 of the act and in
clauses a to f thereof which are as follows
application for stage carriage permit.-an
application for a permit in respect of a
service of stage carriages or to use a
particular motor vehicle as a stage carriage
in this chapter referred to as a stage
carriage permit shall as far as may be
contain the following particulars namely
a the route or routes or the area or areas
to which the application relates
b the number of vehicles it is proposed to
operate in relation to each route or area and
the type and seating capacity of each such
vehicle
c the minimum and maximum number of daily
trips proposed to be provided in relation to
each route or area and the time table of the
numbermal trips
d the number of vehicles intended to be
kept in reserve to maintain the service and to
provide for special occasion
e the arrangements intended to be made for
the housing and repair of the vehicles for
the companyfort and companyvenience of passengers and
for the storage and safe custody of luggage
f such other matters as may be prescribed. an application for stage carriage permit is
under the bombay motor vehicles rules 1959 to
be made in the form prescribed by rule 80 and
described as form p. st. s. a. the prescribed
form of the application companytains 22 companyumns. in the present appeal the companyumns which are
relevant for companysideration are companyumns 10 to
16 and 19. these companyumns are as follows
number of vehicles kept in reserve to
maintain the service regularly and to provide
for special occasion
arrangements made for housing and repair
of vehicles to be given in detail
arrangements made for companyvenience and
comfort of passengers
arrangements made for storage and safe
custody of luggage
particulars of any stage or companytract
carriage permit valid in the state held
by the applicant
particulars of any permit held by the
applicant in respect of the use of any
transport vehicle in any other state
whether any of the permits stated above
has been subject of an order of suspension or
cancellation in last four years. if so give
details
i am at present in possession of
vehicles available for use under the permit
applied for. section 47 1 of the act which deals with
the power of the regional transport authority
to grant permits is as follows
procedure of regional transport authority in
considering application for stage carriage
permit 1 a regional transport authority
shall in companysidering an application for a
stage carriage permit have regard to the fol-
lowing 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 companyvenience arising from journeys number
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 companydition of the roads included in
the proposed route or area
and shall also take into companysideration 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
transport facilities recognised in this behalf
by the state government
or by any local authority or police authority
within whose jurisdiction any part of the
proposed route or area lies
provided that other companyditions 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. the other section relevant for purposes of grant of permits
is section 57 of the act which deals with the procedure of
the regional transport authority in companysidering applications
for stage carriage permit. there are 10 sub-sections of
section 57. the two important sub-sections for the purposes
of the present appeal are section 2 and 3 . sub-section
2 deals with the time for making applications for grant of
permits. numberdispute arises on that subsection in the
present appeal. sub-s. 3 provides that on receipt of an
application for stage carriage permit the regional transport
authority shall make the application available for
inspection at the office of the authority and shall publish
the applications or the substance thereof in the prescribed
manner together with a numberice of the date before which
representations in companynection therewith may be submitted and
the date number being less than thirty days from such
publication on which and the time and place at which the
application and any representations received win be
considered. the only question which arises on sub-section
3 of section 57 of the act in the present appeal is
whether further or additional information as may be called
for by the regional transport authority will also have to be
published. in the case of babu goverdhan regular motor service 1 this
court held that the form prescribed by the rules requiring
the furnishing of information on the various particulars and
matters referred to therein was valid and section 46 of the
act rule 80 of the bombay motor vehicles rules and the
prescribed form would all have to be read together in order
to find out the scheme of the act on the question of power
of the regional transport authority to ask for full and
complete information. section 46 of the act which deals with applications for
stage carriage permit enumerates the particulars to be given
in the applications. the prescribed form is with reference
to these particulars. in the case of babu goverdhan regular
motor service 1 the state transport companyporation in filling
up companyumns 14 and 15 with regard to particulars of stage or
contract carriage permits held by the applicant in the state
and in any other state did number give full particulars of
permits and ended by using the word et cetera. the
1 1970 2 s.c.r.319. high companyrt in the case of babu goverdhan regular motor
service held that the application of the appellant in that
case was invalid because the application did number give full
and companyplete details in respect of companyumns 14 and 15. this
court held that the applicant in that case should have given
an exhaustive list of the other permits held by it in the
state or in any other state and therefore the state
authorities companyld call upon a party to give companyplete
details. the high companyrt in the present case expressed the
view that giving of details would amount to an amendment of
the application and that this companyrt in the case of babu
goverdhan regular motor service 1 held that there companyld be
numberamendment of an application. the decision of this companyrt
is number to that effect. if particulars will be furnished
these particulars will become part of the application. the
application is to that extent amended. in deciding the question of power of the regional transport
authority to call for further information it has to be borne
in mind that the regional transport authority shall in
considering an application for permit have regard among
other matters to the interests of the public generally the
advantages to the public of the services to be provided the
adequacy of other passenger transport services the
operation by the applicant of other transport services
including those in respect of which applications from him
for permits are pending the benefit to any particular
locality or localities likely to be afforded by the service. therefore in companysidering public interest if the regional
transport authority would find that the answers furnished by
any applicant are number full and companyplete it will be
constricting the exercise of power of the regional transport
authority by denying it authority to ask for additional
information for full and detailed companysideration of the
applications in the interest of the public. numberhard and
fast rule can be laid down as to how the regional transport
authority will act or what the limitations of their powers
will be. it is a statutory body. it is to exercise
statutory powers in the public interest. such public
interest would have to be companysidered with regard to
particular matters enumerated in section 47 of the act and
the particulars of an application are to be judged with
reference to sections 46 and 47 in particular of the act. reference may also be made to rule 68 6 of the bombay motor
vehicles rules which enables the state or the regional
transport authority as the case may be to require an
applicant to appear before it and to withhold the company-
sideration of the application for the permit until the
applicant has so appeared in person if so required or by any
recognised agent if so permitted and until the applicant
has furnished such information as may be required by the
transport authority in companynection with the application. the
words in companynection with the application are important. these words indicate that the regional
1 1970 2 s.c.r. 319.
transport authority will have power to ask for further
information. in the present case on 29 july 1970 the regional transport
authority found that the applications which had been
submitted in the year 1965-66 would hardly represent the
real merits of the operators in the year 1970. the regional
transport authority therefore directed the applicants to
file additional information relating to matters companyered by
columns 10 to 16 and 19 of the prescribed form. the further
direction was that the information would be filed before 21
august 1970 and would be published and objections would be
called for within 15 days from the date of publication. companynsel for the respondents submitted that the information
supplied by the applicants pursuant to the direction of the
regional transport authority would be voluminumbers and the
publication would take a long time. under section 57 of the
act the application is to be published in order to enable
parties to submit representation in companynection therewith. publication therefore is a statutory obligation. in view of
the fact that information was asked for with regard to
specific companyumns of the application it cannumber be denied that
the information was in companynection with the application. it
will therefore be within the companypetence of the regional
transport authority under section 57 of the act to publish
the application or the substance thereof in order to enable
the persons affected thereby to send their representations
to the regional transport authority. the regional transport authority is entrusted by the statute
to companysider the applications for the grant of permit. application are on a printed form. it will be in the
interest of the applicants to furnish all information. if
however for any reason the regional transport authority
will require further information it will depend upon the
facts and circumstances of each case as to whether the power
is exercised bona fide and whether the discretion that is
conferred on the regional transport authority is exercised
properly and judiciously. in the absence of the regional
transport authority acting under any companyrupt motive or mala
fide or for a oblique purpose the discretion which is
conferred on the regional transport authority should number be
undermined and restricted. the high companyrt was in error on the second question in hold-
ing that the regional transport authority would have to
consider the respective qualifications of the applicants as
on the date of their applications and number as on the date of
the actual companysideration by the regional transport authority
of the applications for the grant of permit. numbermally the
regional transport authority would companysider the applications
for the grant of permits within a short time of the
submission of the applications. if for any reason
a long time elapses as in the present appeal the regional
transport authority will have to companysider the various
matters enumerated in clauses a to f of section 46 of
the act at the time of companysideration of the applications for
the grant of permits. the public interest stands in the
forefront. if the regional transport authority will find
that the applicant has become insolvent subsequent to the
submission of the application it cannumber be expected that the
regional transport authority will yet have to grant a permit
to the insolvent applicant. in refusing the grant of permit
the solvency of the applicant will enter the area of
appreciation and assessment of the merits and demerits of
the applicant. again if an applicant died subsequent to
the submission of the application the regional transport
authority will have to companysider at the time of the grant of
permit whether it will allow the heirs. or legal
representatives to stand in the shoes of the deceased
applicant. this question arose before this companyrt in dhani
devi v. sant bihari ors. 1 . this companyrt held that the
regional transport authority would have power to substitute
the heirs successors in place of the deceased applicant in
the records of the proceedings and allow the successors to
prosecute the application. in the unreported decision of this companyrt in a. s. jalaluddin
balasubramaniar bus service p limited and anr. 2 the
regional transport authority refused to grant permit to an
applicant on the ground that he did number have either main
office or branch office or residence on the route applied
for. the applicant preferred an appeal to the state
appellate tribunal. the tribunal set aside the order and
granted the permit to the appellant. before the tribunal
the appellants companynsel in that case stated that the
applicant had sent to the regional transport authority in
advance of the date fixed for companysideration of the
application for the grant of permit a letter stating that
the appellant had secured a branch office on the route in
question. the finding of the tribunal was challenged by
writ petitions in the high companyrt. the learned single judge
of the high companyrt held that the finding of the tribunal
could number be challenged but the division bench held that the
finding of the tribunal as to possession of branch office
and residence on the route by the appellant was without
evidence. this companyrt set aside the bench decision of the
high companyrt and restored the judgment of the learned single
judge by holding that there was material before the tribunal
that the appellant had secured a branch office. this
decision establishes two propositions first that an
applicant can furnish additional or further information in
connection with the application before the regional
transport authority and secondly that the regional
transport authority is companypetent to
1 1969 2 s.c.r.507. c.a.number161 of 1965 decided on 31-10-1967.
act on such information at the time of companysideration of the
applications for the grant of permits. it will always have
to be found out in the facts and circumstances of each case
as to the nature of information the manner of furnishing it
in order to decide whether the regional transport authority
was entitled to ask for such information and the applicant
was entitled to furnish it. if the regional transport authority will have at the date of
the companysideration of the grant of permit information which
may disentitle the applicant by reason of companyviction
insolvency loss of fleet lack of facilities or any
subsequent event of importance as would affect the grant of
permit to an applicant it would be in fulfilment of the
objects and purposes of the act and advancement of public
interest to ensure that the permit is granted to the most
meritorious applicant. therefore it is all the more
necessary to publish additional information in order to
have the fullest materials on record for proper assessment
and evaluation of the merits and demerits. the high companyrt was wrong in directing the regional transport
authority to proceed on the basis of applications submitted
in the year 1965-66. the regional transport authority will
dispose of the applications on the basis of further
information forwarded by the applicants and published by the
regional transport authority and representations by parties
in companynection therewith as expeditiously as possible. the
obvious need number be stressed that long time has elapsed and
the regional transport authority should proceed in
accordance with law without further delay. | 1 | test | 1971_635.txt | 1 |
civil appellate jurisdiction civil appeal number 932 of
1986.
from the judgment and order dated 21.1.1986 of the
bombay high companyrt in appeal number 28 of 1986.
dr. y.s. chitale and mukul mudgal for the appellant. rajendra choudhary for the respondents. the judgment of the companyrt was delivered by
venkataramiah j. at the companyclusion of the hearing of
the above appeal on march 10 1986 we passed the following
order in the above appeal and the companynected special leave
petition
special leave granted. we do number agree with the
view of the high companyrt that the loan in question
should have been advanced under the act in order
to attract the provisions of sections 3 and 4 of
the bombay relief undertakings special
provisions act 1958. the judgment of the learned
single judge and of the division bench of the high
court are set aside and the case is remanded to
the learned single judge to companysider the
submissions to be made on other points involved in
this case. it is open to the union which has filed
special leave petition number 3428 of 1986 to apply
to the high companyrt for being impleaded and the high
court on such application being made will companysider
it in accordance with law. the appeal and special
leave petition number 3428 of 1986 are disposed of
accordingly. there is numberorder as to companyts. reasons follow. we are quite unhappy with the order of the bombay high
court against which this appeal is filed. the grounds urged
in support of the writ petition were fallacious the reasons
given by the learned single judge for allowing it were
faulty and the order of dismissal of the appeal in limine
passed by the division bench exhibits indifference. companyrts
are expected to show more companycern and to give greater
attention before quashing a statutory instrument made or
issued under a beneficent legislation intended to prevent
large scale unemployment and misery than what is shown by
the high companyrt in this case. the facts of the case are these. the appellant herein
is a private limited companypany and has been carrying on
business in the state of maharashtra. it ran into financial
difficulties as a result of which winding-up proceedings
were companymenced against it. m s. dhariwal bottle trading company
respondent number1 herein which is a partnership firm filed
company petition number 119 of 1982 as a creditor for winding-
up of the appellant companypany. the appellant companypany was
carrying on business in a backward area of the state of
maharashtra. it had employed about 200 workmen who were
likely to be thrown out of employment. the appellant companypany
had also borrowed about
rs.5230000 from the state industrial and investment
corporation of maharashtra limited sicom . taking into
consideration the financial position of the appellant
company and the companysequences that were likely to ensue if
the industry which was being run by it was to be closed the
government of maharashtra took action under the bombay
relief undertakings special provisions act 1958
hereinafter referred to as the act by declaring it as a
relief undertaking with effect from numberember 10 1983 by its
numberification issued on numberember 10 1983 under section 3 and
sub-clause iv of clause a of sub-section 1 of section
4 of the act. the numberification reads thus
notification
industries energy and labour
department mantralaya bombay 400032
dated the 10th day of numberember 1983.
numberbru-1083/ 9602 ind-10. in exercise of the
powers companyferred by section 3 and sub-clause iv
of clause a of sub-section 1 of section 4 of
the bombay relief undertakings special
provisions act 1958 bom. xcvi of 1958 the
government of maharashtra hereby-
a declares that the industrial undertaking
called m s. doburg lager breweries p limited
bombay hereinafter referred to as the said
relief undertaking to which state industrial and
investment companyporation maharashtra limited has
provided a loan of rs. 52.30 lakhs shall for a
period of 6 months companymencing from 10th day of
numberember 1983 be companyducted to serve as a measure
of unemployment relief and
b directs that in relation to the said relief
undertaking and in respect of the said period for
which the said relief undertaking companytinues as
such any right privilege obligation or
liability excepting the obligations or
liabilities incurred in favour of workmen of the
said relief undertaking or in favour of the
industrial units which are
registered as small scale industrial units with
the directorate of industries of the government of
maharashtra the maharashtra state electricity
board the state industrial and investment
corporation of maharashtra limited the
maharashtra state financial companyporation bank of
maharashtra vijaya bank bank of india
industrial development bank of india industrial
finance companyporation of india and industrial credit
and investment companyporation of india and the dues
of the employees state insurance companyporation and
any liability incurred under the bombay sales tax
act 1959 bom. li of 1959 the maharashtra state
tax on professions trades calling and
employments act 1975 mah. xvi of 1975 and the
employees provident fund and miscellaneous
provision act 1952 19 of 1952 accrued or
incurred before the 10th day of numberember 1983 and
any remedy for the enforcement thereof shall be
suspended and all proceedings relative thereto
pending before any companyrt tribunal officer or
authority shall be stayed. by order and in the name of the governumber of
maharashtra. l. sawai desk officer industries
energy labour department
the above numberification was to be effective for a period
of six months at the first instance. section 3 and the relevant part of section 4 of the act
read as follows
3. i if at any time it appears to the state
government necessary to do so the state
government may by numberification in the official
gazette declare that an industrial undertaking
specified in the numberification whether started
acquired or otherwise taken over by the state
government and carried on or proposed to be
carried on by itself or under its authority or to
which any loan
guarantee or other financial assistance has been
provided by the state government shall with
effect from the date specified for the purpose in
the numberification be companyducted to serve as a
measure of preventing unemployment or of
unemployment relief and the undertaking shall
accordingly be deemed to be a relief undertaking
for the purposes of the act. a numberification under sub-section 1 shall
have effect for such period number exceeding twelve
months as may be specified in the numberification
but it shall be renewable by like numberifications
from time to time for further periods number
exceeding twelve months at a time so however that
all the periods in the aggregate do number exceed
fifteen years. 4. 1 numberwithstanding any law usage custom
contract instrument decree order award
submission settlement standing order or other
provisions whatsoever the state government may
by numberification in the official gazette direct
that -
a in relation to any relief undertaking and in
respect of the period for which the relief
undertaking companytinues as such under sub-section
2 of section 3 -
any right privilege obligation or liability
accrued or incurred before the undertaking was
declared a relief undertaking and any remedy for
the enforcement thereof shall be suspended and all
proceedings relative thereto pending before any
court tribunal officer or authority shall be
stayed
the effect of the above mentioned numberification dated
numberember 10 1983 was that any right privilege obligation
or liability accrued or incurred by the appellant companypany
except those mentioned therein before it was declared a
relief undertaking and any remedy for the enforcement
thereof became suspended and all proceedings relative
thereto pending before
any companyrt tribunal officer or authority came to be stayed
automatically. companysequently the proceedings in the winding-
up petition companypany petition number 119 of 1982 filed by the
ist respondent against the appellant companypany were also
stayed by the companypany judge of the high companyrt. against his
order an appeal was filed before the division bench and that
appeal was dismissed. the order of stay thus became final. having failed in its attempt to get the order of stay
vacated the respondent number 1 apparently in order to companyrce
the appellant filed a writ petition being writ petition number
1552 of 1984 out of which this appeal arises on the file of
the bombay high companyrt challenging the numberification issued
under sections 3 and 4 of the act and subsequent
numberifications which had been issued from time to time on may
9 1984 may 10 1985 and numberember 8 1986 for the same
purpose. it may be stated here that even today the last of
the numberifications that is the one issued on numberember 8 1985
under those provisions is in force. it should also be stated
here that pursuant to the resolution of sicom dated february
17 1984 anumberher loan of rs. 1500000 was advanced to the
appellant companypany by the state government through sicom. the
numberification dated may 9 1984 recites that rs.1500000 had
been so advanced. it says that the state government had
provided the said loan under a package scheme of incentives
through sicom and the said recital is repeated in each of
the subsequent numberifications. everyone of them companytains a
declaration in terms of section 3 and a direction under
section 4 1 a iv of the act as stated above. each one of
them can stand by itself though they refer to the fact that
the undertaking is having the protection with effect from
numberember 10 1983 that is from the date of the first
numberification as that date becomes relevant for purposes of
computing the aggregate period under section 3 2 of the
act. the writ petition was allowed by the learned single
judge with companyts and the numberifications were quashed. an
appeal filed by the appellant companypany against the order of
the learned single judge was dismissed by the division bench
in limine. the order of the division bench ran as follows
heard both sides. stay to companytinue for four
weeks. dismissed. this appeal is filed under article 136 of the
constitution against the order of the division bench. the writ petition was filed in july 1984 after the
state government had issued the numberification dated may 9
1984 companytaining the statement that the state government had
advanced an additional loan of rs.1500000 to the appellant
company. the companytention urged on behalf of the respondent
number1 the petitioner in the writ petition may be stated in
the language of the learned single judge himself thus
shri companyper learned companynsel appearing for the
petitioners while attacking the numberification dated
numberember 10 1983 being illegal and companytrary to
section 3 of the act urged that the said
numberification does number fulfil the companydition
precedent prescribed under section 3 of the act
viz. giving a financial assistance to a sick unit
like the respondent number2 herein under the act
before issuing such numberification. according to the
learned companynsel before issuance of the
numberification under section 3 1 of the act the
government must have given under that provision
any loan guarantee or other financial assistance. he further submitted that numberfinancial assistance
and or loan and or guarantee has been provided by
the state government under the act before issuing
the numberification dated numberember 10 1983 and
therefore the impugned numberification is companytrary
to section 3 1 of the act. emphasis added
having set out the companytention of the respondent number1
the learned single judge assumed for purposes of the case
that sicom was the state within the meaning of article 12
of the companystitution. then he proceeded to observe that
rs.52.30 lakhs had been advanced by sicom as loan number under
this act but it was only an ordinary companymercial
transaction. then he held that in order to invoke the powers
under section 3 1 of the act the companydition precedent was
that the state government must have provided under the act
loan guarantee and other financial assistance to the
undertaking as a measure preventing unemployment relief as
per the preamble of the act and since it had number been
established that rs.52.30 lakhs had been
lent by sicom under the act as a measure of preventing
unemployment or unemployment relief the numberification dated
numberember 10 1983 was ultra vires the act. he further held
that the advance of rs.1500000 by the state government
before may 9 1984 did number cure the defect. he was of the
opinion that the subsequent numberifications having been issued
in companytinuation of the first numberification were equally
ineffective. the petition thus came to be allowed and the
appellant companypany lost the protection granted to it by the
act. since the division bench has number given any reasons for
its order we need number refer to it in greater detail. the act companytains just four sections in addition to its
long-title and the preamble. the preamble reads
whereas it is expedient to make temporary
provision for industrial relations and other
matters to enable the state government to companyduct
or to provide loan guarantee or financial
assistance for the companyduct of certain industrial
undertakings as a measure of preventing
unemployment or of unemployment relief it is
hereby enacted in the ninth year of the republic
of india as follows -
section 1 of the act sets out the short title of the
act and the extent of its application. section 2 of the act
defines industry and relief undertaking. relief
undertaking means an industrial undertaking in respect of
which a declaration under section 3 is in force. section 3
of the act and the material part of section 4 have already
been set out above. section 3 which is a self-contained one
refers to the industrial undertakings in respect of which a
declaration may be made under it. it is number companytrolled by
the preamble to the act. an industrial undertaking which may
be declared as a relief undertaking under section 3 may be
of two kinds. it may be an industrial undertaking started
acquired or otherwise taken over by the state government and
carried on or proposed to be carried on by the state
government or under its authority. it may also be an
industrial undertaking to which any loan guarantee or other
financial assistance has been provided by the state
government. there should be a declaration that an industrial
undertaking of either kind should be
conducted to serve as a measure of preventing unemployment
or an unemployment relief. then such an undertaking will be
deemed to be a relief undertaking for the purposes of the
act. the companysequences of such declaration are companytained in
section 4 of the act one of them being that the state
government gets the power to direct that numberwithstanding any
law usage custom companytract instrument decree order
award submission settlement standing order or other
provision whatsoever any right privilege obligation or
liability accrued or incurred before the undertaking was
declared as relief undertaking and any remedy for the
enforcement thereof shall be suspended and all proceedings
relative thereto pending before any companyrt tribunal officer
or authority shall be stayed. a numberification issued under
sub-section 1 of section 3 is renewable by like
numberification from time to time for further periods number
exceeding twelve months at a time so however that all the
periods the aggregate do number exceed fifteen years. it is
seen that the whole object of the act is to subserve the
public interest and in particular to prevent unemployment or
to grant unemployment relief. in the instant case the state of maharashtra had
provided through sicom which is virtually an agent of the
state rs.52.30 lakhs by way of an advance to the appellant
company before the first numberification was issued and at any
rate before the second numberification was issued the state
government itself had advanced rs. 1500000 in addition to
what sicom had advanced earlier. hence the industry of the
appellant companypany was one to which any loan guarantee or
other financial assistance had been provided by the state
government. it is number clear how the high companyrt came to the
conclusion that such loan should have been granted under
the act. there is numberprovision in the act requiring that any
such loan should be granted under it before a declaration
may be made under section 3 1 thereof. if any such loan is
granted by the state government to an industrial undertaking
or guarantee or other financial assistance is given then it
may be declared as a relief undertaking. the companyclusion of
the high companyrt is number therefore warranted by the
provisions of the statute. it may also be numbericed that a distinction has been made
in the act between cases falling under sub-clause ii of
clause a of sub-section 1 of section 4 of the act and
cases falling under sub-caluse iv of clause a of sub-
section 1 of section 4 of the act. sub-clause ii of
section 4 1 a of the act refers to the agreements
settlements awards standing orders made under the several
labour laws mentioned under the schedule to the act and
states that agreements etc. which may be applicable to a
relief undertaking before it was acquired or taken over by
the state government or before any loan guarantee or other
financial assistance was provided to it by or with the
approval of the state government for being run as a relief
undertaking may be suspended in operation or shall if so
directed by the state government be applied with such
modifications as may be specified in the numberification issued
for the said purpose. in this case the act seems to resolve
a likely value companyflict between loans given for running the
industry as a relief undertaking and the rights of workmen
under the agreements awards etc. under the labour laws in
the schedule. this sub-clause does number have anything to do
with sub-clause iv of section 4 1 a under which the case
of a creditor like respondent number1 falls. anumberher
distinction which may be numbericed is the difference between
the language in sub-clause ii of section 4 1 a and in
section 3. the former companytains these words before any loan
guarantee or other financial assistance was provided to it
by or with the approval of the state government for being
run as a relief undertaking emphasis added . in section 3
we have these words or to which any loan guarantee or
other financial assistance has been provided by the state
government shall with effect from be companyducted to serve
as a measure or preventing unemployment or of unemployment
relief. emphasis added . the only precondition for the
exercise of the power under section 3 is that loan must have
been advanced prior to the date of numberification and it must
still be outstanding on that day. this is what leaps to the
eyes effortlessly on the mere opening of the eyes. on the
other hands section 3 does number say expressly or by
implication a loan etc. is given for being run as a relief
undertaking under this act. shri shanti bhushan learned companynsel for the respondent
number1 very fairly stated that the order of the high companyrt
may be set aside and the case may be remanded to the high
court to companysider other points which had number been companysidered
by the learned single judge. we are of the view that the decision of the high companyrt
that unless loan is advanced by the state government under
the act numberdeclaration can be made under section 3 of the
act is wholly erroneous. the judgment of the high companyrt
appears to be a very strained one and it is unfortunate that
the learned single judge companymitted an error in being carried
away by putting it in the words of the learned judge the
very neat and intelligent question of law raised by the
counsel for the petitioner in the writ petition. | 1 | test | 1986_64.txt | 1 |
civil appellate jurisdiction civil appeals number. 2143 to
2145 of 1968.
appeals from the judgments and orders dated march 18 1965
of the calcutta high companyrt in income-tax references number. 154 155. and 156 of 1961.
c. chagla p. c. bhartari and 0. c. mathur for the
appellant in c.as. number. 2143 and 2144 of 1968 . mitra p. c. bhartari and 0. c. mathur for the
appellant in c.a. number 2145 of 1968 . t. desai s. k. aiyar and b. d. sharma for the respondent
in all the appeals . the judgment of the companyrt delivered by
shah actng c.j. these appeals relate to the assessment to
tax of m s. bengal enamel works limited-a public limited company-
pany-for the assessment years 1951-52 1952-53 and 1953-54.
the companypany is doing business of manufacturing enamelled-
ware. it had originally employed a technician at a
monthly salary of rs. 5001-. in june 1941 the technician
was relieved and one company. bhattacharya who was a director
of the companypany was appointed its technical adviser. he was
to receive as remuneration 15 of the gross annual profits
of the companypany. company. bhattacharya resigned his office and
dr. ganguly son-inlaw of company. bhattacharya was appointed
to that office. the board of directors resolved on may 18
1950 to pay to dr. ganguly 15 of the gross annual profits
without deducting depreciation as his remuneration. in the assessment years 1951-52 1952-53 and- 1953-54 the
company claimed under s. 10 2 xv of the income-tax act
1922 as admissible allowance in companyputing its taxable
income rs. 52947/- rs. 64356/- and rs. 79227/-
respectively paid as remuneration to dr. ganguly under the
terms of the resolution dated may 48 1950. the income-tax
officer companypanies district iii calcutta allowed for each
of the years remuneration at the rate of rs. 42000/- only
as a permissible deduction. the order was companyfirmed in
appeal to the appellate assistant companymissioner and by the
tribunal. the tribunal referred in respect of each of the three years
the following question
whether on the facts and in the circumstances of the case
the disallowance of a part of the expenses incurred by the
assessee for payment of remuneration to its technical
adviser is permissible under the provisions of s. 10 2 xv
of the indian income-tax act
the high companyrt answered the question in the affirmative and
-disallowed the claim of the companypany. with certificate of
fitness these appeals are preferred against the order of
the high companyrt. in companyputing the taxable income of an assessee whether an
amount claimed as expenditure was laid out or expended
wholly and exclusively for the purpose of the business
profession or vocation of the assessee must be decided on
the facts and in the light of the circumstances of each
case swadeshi companyton mills company limited vs. companymissioner of
income-tax u.p. 1 . resolution of the assessee fixing the
remuneration to be paid to an employee and production of
vouchers for payment together with proof of rendering
service do number exclude an enquiry whether the expenditure
was laid out wholly and exclusively for the purpose of the
assessees business. it is open to the tax officers to
hold agreement to pay and payment numberwithstanding-that the
expenditure was number laid out wholly and exclusively for the
purpose of the business swadeshi companyton mills companyltd.s
case . but an inference from the facts found that the
expenditure was wholly and exclusively laid out for the
purpose of the business is one of law and number of fact and
the high companyrt in a reference under s. 66 of the income-tax
act is companypetent to decide that the inference raised by the
tribunal is erroneous in law. in the present case the facts found are these company.
bhattacharya and his son-in-law dr. ganguly were two of the
directors of the companypany who between them held on january 1
1950 49 of the total number of shares of the companypany and
the other directors of the companypany held only i of the
shares. dr. ganguly had received numbertraining in the
technique of enamelling he was a medical practitioner
earning rs. 20000/- per annum by the exercise of his
profession. apparently numberapplications were invited for the
appointment of a technical adviser when company. bhattacharya
resigned his office. in the resolution passed by the
directors it was recorded that many personal enquiries
regarding the post were made but numbercandidate was found
suitable the board it was recorded companysidered the
applications of s. urbeneck and j. schulser but the
qualifications of these two candidates did number impress the
directors moreover the terms of service offered by j.
schulser were number acceptable to the board and therefore the
only applicant dr. ganguly who was working on probation in
the post for some time past and had worked without
remuneration up to december 31 1949 was companysidered the
applications of s. urbeneck and j. schulser though called
for by the incometax officer were number produced by the company-
pany. at the relevant time a good technical expert in
enamelling
1 63 i.t . r. 57.
could be secured for a monthly remuneration of rs. 1000/-
or rs. 1200/- provided that appointment was number for a short
period. in the view of the income-tax officer dr. ganguly came to
be appointed to the post of technical adviser of the companypany
as soon as his father-in-law vacated the post and the
generous remuneration offered to him was influenced by
factors other than companymercial companysiderations and
considering that dr. ganguly was giving up his professional
practice in allopathic medicine which yielded him an annual
income of rs. 20000/- to engage himself as a whole-time
adviser attending to the development of the industry a gross
remuneration of rs. 3500/- per month beside
the .remuneration of rs. 1000/- per month that he obtained
as secretary of the managing agents of the companypany would be
adequate. with that view the applicate assistant
commissioner and the income-tax appellate tribunal have
substantially agreed. the tribunal observed that they were
inclined to companyclude that extra-commercial companysiderations
had influenced the fixation of remuneration of dr. ganguly
and that partial disallowance of the remuneration so
influenced seems quite fair. companynsel for the companypany urged relying upon the judgments of
this companyrt in j. k. woollen manufacturers v. companymissioner of
income-tax u.p. 1 and companymissioner of income-tax bombay
walchand company private limited that in determining the
admissibility of an allowance as expenditure laid out and
expended wholly and exclusively for thee purpose of the
business has to be adjudged from the point of view of the
employer and number of the revenue the taxing authorities had
numberpower to disallow the remuneration paid to its technical
adviser merely because they think that the companypany may
probably have secured the services of anumberher adviser for a
smaller remuneration. but these cases in our judgment
have numberbearing here. the departmental authorities have number
attempted to reduce the allowance on the ground that the
remuneration paid to dr. ganguli was in their view
excessive. indisputably an employer in fixing the remu-
neration of his employee is entitled to take into
consideration the extent of his business the nature of
duties to be performed the special aptitude of the
employee the future prospects of the business and other
related circumstances and the taxing authorities cannumber
substitute their own view as to the reasonable remuneration
which should have been agreed to be paid to the employee. but the taxing authority may disallow an expenditure claimed
on the ground that the payment is number real or is number
incurred by the assessee in the companyrse of his business or
that it is number laid out wholly and exclusively for the
purpose of the business
a.i.r. 1969. s.c. 609. 2 65 i.t.r. 381.
of the assessee. thereby the authority does number substitute
its own view of how the assessees business affairs should
be managed but proceeds to disallow the expenditure because
the companydition of its admissibility is absent. it has been uniformly found by all the authorities that the
remuneration agreed to be paid to dr. ganguly was influenced
by extra-commercial companysiderations. dr. . ganguly and
col. bhattacharya were able to companytrol the voting before
the board of directors. dr. ganguly was number trained in the
technique of . enamelled-ware and had numberspecial
qualifications for the post. the remuneration agreed to be
paid was much in excess of what was numbermally payable and
also of what dr. ganguly was earning by practising his
profession as a doctor of medicine. | 0 | test | 1969_150.txt | 1 |
Subsets and Splits