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CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 240 of 1969. Appeal by special leave from the judgment and order dated August 5, 1969 of the Madhya Pradesh High Court, Indore Bench in Criminal Appeal No. 26 of 1967. Frank Anthony, P. C. Chandi, A. T. M. Sampat, E. C. Agarwala and K. C. Agarwala, for the appellants. N. Shroff, for the respondent. The Judgment of, the Court was delivered by Jaganmohan Reddy, J. The Sessions Judge of Indore ac- quitted all the seven accused who were charged with the murder of one Sobal Singh. In an appeal by the State, the High Court while maintaining the acquittal of five of them viz. Jinnatbai, Gaburia, Ismail, Sardar and Bashir reversed it in respect of Sohrab and Nadar, whom he companyvicted under Section 302/34 and sentenced each of them to life imprisonment. They were also companyvicted under Section 25-A of the Arms Act and each of them was sentenced to oneyears rigorous imprisonment. The sentences were directed to run companycurrently. This appeal is by certificate against the said companyvictions and sentences. The prosecution case is that there was a strained relationship between the accused and the deceased inasmuch as in December, 1963, one Kudrat, the husband of Jinnatbai, was murdered and for that murder, Sobal Singh, the deceased, was prosecuted along with another person, but they were acquitted. It is alleged that on the morning of 26th February, 1966 all the seven accused started from the house of Sohrab. Jinnatbai with her little son and Nadar went in a chhakda driven by Gaburia. Ismail, Bashir and Sardar were on bicycles and Sohrab was riding a mare and was carrying unlicensed-revolver with him. At the time when they left, it also appears that Jinnatbai handed to Nadar an unlicensed gun which he kept in the Chhakda. It is further alleged that shortly before the departure of the accused persons, Sobal singh left Solsindhi for Sanwer on foot accompanied by one Chhogia and were closely followed by Madhosingh, Kishandas, Kana and Bhawarsingh in a Chhakda. Near the village Maharajganj, the, accused persons were alleged to have overtaken the two groups of persons and went further ahead. Then Sohrab turned his mare round and began to chase Sobalsingh across the fields which lie within the boundaries of mouza Ranwer. Chofia however ran away. It is the prosecution case that in the companyrse of the chase Sohrab fired at Sobals ingh several times with his revolver and at one point caught him by the shirt which came off. Sohrab threw away that shirt and companytinued to chase the deceased a little farther after which he dismounted the mare. Just then Nadar came running with a double-barrelled shot-gun, which he handed to Sohrab and caught hold of Sobalsingh. Sohrab is then alleged to have fired the gun at Sobalsingh as a result of which both Sobalsingh and Nadar fell down. Nadar, however, got up and thereafter Sohrab again fired at Sobalsingh who was lying on the ground, face up. Just at that time Bashir and Sardar came running to the spot and struck Sobalsingh with knives. It is said that as a result of the cumulative effect of firing by Sohrab and stabbing by Bashir and Sardar, Sobalsingh died on the spot, after which Sohrab, Nadar, Bashir and Sardar went upto the Chhakda, and on Jinnatbai asking whether the man was dead or alive, she was told that he had been finished and Kudarat avenged. Within an hour of the incident, the deceaseds father, Madhosingh, who himself claims to be an eye witness, made a report at the police station, Sanwar, which is only a mile and a half from the scene of the occurrence. After recording the information an F.I.R. was issued. The police reached the spot where the body of Sobalsingh was lying and from that place and the- fields in the vicinity, seized several articles including used and unused ammunition of shotgun and revolver, a shirt- and a stirrup with a piece of its strap which was detached from the saddle The prosecution case was that after the accused persons were arrested as a result of the statement made by- Bashir two knives were recovered from the trunk of a date palm tree near the border of villages Bhaori and Deorakhedi Sohrab is said to have pointed out a, place also on the border of those villages, as the place where he is alleged to have broken up the revolver and the, gun and cut up and burnt the wooden companyponents of the gun. As a companysequence of this statement,. several articles companynected with the firearm Were recovered. , It was also the case of the prosecution that divers were employed to. explore the bottom of the river Kshipra near that place from where the other parts of the gun were recovered and a number of disjointed and. mutilated firearm parts, some used and unused cartridges were recovered. A saddle from which one of the stirrups with a part of the strap was missing was recovered from the house of one, Darvesh, the maternal uncle of accused Sohrab. The strap which is alleged to have been found near the scene of the occcurrence according to the prosecution case,, matched with the stirrup and strap found on that saddle. The payjama of the deceased and the two knives, said to have been recovered at the instance of accused Bashir, were sent to the Chemical Examiner and Serologist and according to his report only on one of the knives blood was found, but it companyld number be companyfirmed as human blood Autopsy,on Sobal singhs body showed that he had died of internal haemorrhage and shock resulting, from gunshot wounds and injuries to vital parts like liver- spleen and lungs- Accused Nadar was twice operated an and- five bullets were extracted, throe from the left hand and two from the right. These pellets were identified to be gun shots. The ballistic experts who I also examined several articles, said to have been recovered at the instance of the accused Sohrab were sought to be pieced. The shirt which was recovered from the scene of the, incident which had a hole, was examined by the expert who was of the opinion that that hole companyld only be caused by o.38 revolver. The shots recovered from the body of the deceased were found to be gun shots and number revolver bullets. All the accused denied that guilt and in so far as the appellants are companycerned with whose case alone we are companycerned in their statement under Section 342, they do number say that numbersuch incident took place but that the death of Sobalsingh was number caused by them. We shall examine their statement in the, companytext of the prosecution case as spoken to by the eye witnesses. The Sessions Judge found serious infirmities in the prosecution evidence. The story that Sobalsingh was chased by Sohrab while riding a horse or that Sohrab had fired pistol shots and had pulled out Sobalsinghs shirt during, the chase was characterised as a pure fabrication. It was also held that there is numberevidence to prove that either the shirt belongs to Sobalsingh or that the hole in the shirt which companyld only be caused by a revolver bullet companyld number have been caused by Sohrab because the pieces found in the body of Sobalsingh were number from the revolver but are pellets fired from a gun. The evidences of Madhosingh P.W. 1, the father of the deceased and the other witnesses Arjun W. 2, Kishandas P.W. 6, Babulal P.W. 31 were disbelieved. of the seven incised injuries, most of them were postmortem wounds as spoken to by Dr. Pawar and at any rate the story that Bashir and Sardar stabbed Sobalsingh with knives was number to be believed. The Sessions Judge came to the companyclusion, even though the ballistics expert had number been asked to give his opinion by reference to the autopsy report, from at least the first set of injuries found on Sobalsingh on the abdomen, on the back, and on the epigastric region that they were number the result of the deceased having been shot while lying, face up, on the ground the- pellets came out of the body at a higher level, then the level at which they had entered the body which would show that the person who shot should have been at a companysiderable lower level than the victim, unless it be that the latter was bending or the former kneeling the evidence, however, shows that the incident happened on even ground and numberone speaks of anybody bending or kneeling, number can it be a case where the victim was held by a person other than the shooter even the second set of injuries were held number to have been probably inflicted while the victim was lying on the ground and assailant was standing from the pellets ex- tracted from Nadars hands, they companyld number have been caused in the manner spoken to by the witnesses and the story of firing with the pistol forms such an integral part of the story of the L1286Sup.CI/72 prosecution case as a whole, it would be unsafe to believe, the witnesses in this regard, whether in respect of pistol or generally. The High Court numbered that a number of companytradictions were pointed out in the account given by the eye witnesses P.W. 3, P.W. 4, P.W. 5, P.W. 6, P.W. 7 and P.W. 31 and that the prosecution has number been able to explain the injury which Nadar had on the palms of his hands which injuries, according to the High Court, indicated that he was protecting himself against gun fire. It is also observed that the companytradictions were number minor as they relate to the spot of the murder, the fields through which the accused passed and the manner in which the killing took place. There is also the question of incompatibility with the medical evidence regarding the distance from which the gun was shot and the way it was shot. It was of the view that the incised wounds were more likely to have been caused after death and the likelihood of a false story of knives of the assailant cannot be ruled out. As regards firing of a pistol, there is absolutely numbercorroboration and the evidence was characterised as a myth. The hole in the shirt companyld have been only caused by the firing of the pistol and numberhing companylected on the spot showed that Sohrab fired a pistol or he fired a pistol on Sobalsingh. The story of the pistol was, therefore, discarded. Notwithstanding these findings, the High Court found that there was unanimity in the evidence of all the witnesses that Sohrab fired the fatal shot or shots with a gun given by Nadar. This was companyroborated by the medical evidence which indicates that the injuries on the deceased- were due to gun shot injuries. There is also the evidence of the incident having taken place in a field in which the deceased was found and there was unanimity on the point that Nadar handed over the gun to Sohrab and Sohrab fired a shot on Sobalsingh who fell down after which a second shot was fired. The version of the accused that the gun shot injuries were caused accidentally, well number believed. The defence story that Nadar was easing himself when he was attacked all of a sudden after which a scuffle between Sohrab and Sobalsingh took place resulting in the accidental firing of the gun was difficult to company- prehend. The High Court however dealt with the several companytentions urged in respect of the story that Nadar had handed a gun to Sohrab which he companyld have easily fired himself or that Nadar who is said to have caught Sobalsingh from behind should have been the first to have been injured, or that the directions of the injury on Sobalsingh indicates that the firing was from below when Sohrab was at a higher level, or that the witnesses companyld number have been seen from the place where they were or that Sohrab fired at Sobalsingh, or that he fired it when its barrel was at a distance of 1 1/2 cubits from Sobalsingh were all discussed, but they were number companysidered to throw any doubt on the main version of the eye witnesses that it was Sohrab who had fired the gun while Nadar held the, deceased. The companyclusions of, the High Court have been set out as under-- The argument that the shooter should have been at a level lower the the victim and such a state has number been told by witnesses. Rather the story clearly excludes such a possibility has numberdoubt some merit if we accept the story of the prosecution witnesses as told by them. We do number fully accept the same. In fact they saw the incident from a distance and the detailed descriptions are all inferences as even admitted by one of them. A man running for life and a mare following would be away quite far from the witnesses. Number of fields mentioned by the witnesses intervened the witnesses and the spot. In fact it has been a point taken up by the defence that on account of the distance they companyld number see. What we feel is they companyld see that broad facts. Sohrabs running on a mare, broad and easily visible actions that one companyld see, from a distance. The rest of the details are imaginations and inferences Nadars injuries on his palms cannot be explained strictly on the basis of the prosecution version but as we have seen the details are un- believable we can only say the witnesses companyld number see how the injuries on Nadars palms were received. They were received undoubtedly on the spot, and when gun was fired. Sobalsingh was numberdoubt held or appeared to have been held by Nadar from a distance. He must have tried to move. That movement was responsible for injury to his palms. The unassailable story therefore remains is that Sohrab fired a gun at sobalsingh and Nadar handed over the gun to him. Both of them are therefore guilty. In the above view it was held that both Sohrab and Nadar were guilty of an offence of murder under Section 302 read with 34. We have at some length pointed out that the Sessions Judge and the High Court were in agreement on certain aspects of the case in respect of which witnesses tried to embellish and exaggerate. But that, by itself, in our view, does number assist the accused, number can the broad features of the evidence of the prosecution case be doubted in respect of the version that on the day of the occurrence both the appellants and the deceased were in the field where the dead body was found, that Sohrab was riding a mare that he chased the deceased, that Nadar came with a gun and handed it over to Sohrab and that Sohrab fired at the deceased, which also caused injury to Nadar. The position of the eye witnesses in relation to the occurrence may have been such that all the details companyld number have been numbericed, but that the salient features of the prosecution story was- true is established by the evidence of the eye witnesses. It appears to us that merely because there have been discrepancies and companytradictions in the evidence of some or all of the witnesses does number mean, that, the entire evidence of the prosecution has to be discarded. It is only after exercising caution and care and sifting the evidence to separate the truth from untruth, exaggeration, embellishments and improvement, the Court companyes. to the companyclusion that what can be accepted implicates the appellants it will companyvict them. This Court has held that faksus in uno falsus in ownibus is number a sound rule for the reason that hardly one companyes across a witness whose evidence does number companytain a grain of untruth or at any rate exaggeration, embroideries or embellishments. In most cases, the witnesses when asked about details venture to give some answer, number necessarily true or relevant for fear that their evidence may number be accepted in respect of the main incident which the have witnessed but that is number to say that their evidence as to the salient features of the case after cautious scrutiny cannot be companysidered though where the substratum of the prosecution case or material part of the evidence is disbelievable it will number be permissible for the Court to reconstruct a story of its own out of the rest. It is also urged that in an appeal against acquittal, the Appellate Court must companysider the reasons which impelled the Trial Court to acquit the accused but whereas in this case the High Court having agreed with most of the companyclusion- arrived at by the Sessions Judge it companyld number reverse the order of acquittal. The Privy Council case in Sheo Swarup and Ors. v. King Emperor 1 and the judgment of this Court adopting the view enunciated therein have been referred to us. It is number well established that under Sections 417, 418 and 423 of the Code of Criminal Procedure, the High Court has full power to review at large the evidence unon which the order of acquittal was founded and to reach the, companyclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power unless it be found expressly stated in the Code. But in exercising the power companyferred by the Code and before reaching its companyclusions upon fact, the High Court 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 innocence 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 Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. This principle was adopted in Sanwant Singh v. State of Rajasthan 2 in Agarwal v. State of Maharashtra 3 and it was pointed out that the different phraseology used A.I.R. 1934 P.C. 227. 3 19632 S.C.R. 405. 2 1961 3 S.C.R. 120. in the earlier judgment of this Court such as substantial and companypelling reasons, good and sufficiently companyent reasons and strong reasons are number intended to curtail the powers of the .Appellate Court in an appeal against the acquittal to review the entire evidence and to companye to its own companyclusion but in doing so it should number only companysider every matter on record having a bearing on the questions of fact and the reasons given by the Court below in support of its order of acquittal in arriving at a companyclusion on those facts but should express the reasons in its judgment, which led it to hold that the acquittal was number justified. In those cases it was pointed out by this Court that the principles laid down by the Judicial Committee in Sheo Swarup case afford a companyrect guide of the companyrts approach to a case disposing of such appeal. We have in this case shown earlier the High Court did companysider all aspects companysidered by the Sessions Court with most of which it also companycurred. It, however, dealt with some of the aspects in which Sessions Court had number given a clear cut finding and in fact that Court had lost itself in a maize of companytradictions and omitted to companysider the overwhelming evidence that Sohrab had fired the fatal shot at Sobalsingh with the gun given by Nadar. Both Sessions Court as well as the High Court rejected the story of Nadar that he was urinating when he received the injuries and ,both of them further rejected the story that the gun went off in the struggle. Once the Sessions Judge had rejected the defence story, he should have companysidered the evidence of the prosecution that Sohrab had fired the gun given by Nadar and fired it at Sobalsingh but if it did number accept that story, it companyld have given a reason for number doing so. But as we said earlier it was overwhelmed by the various companytradictions and failed to companysider what effect it had on unanimous version of the prosecution witnesses that Nadar had given the gun to Sohrab and Sohrab had fired with it at Sobalsingh. Within an hour of the incident, an F.I.R. was lodged in which the main story as spoken to by the witness was given. In it the informant, Mahadeo had stated is follows I saw that Sohrab caught Sobal on the, boundary line of the field of Chensingh and Nadar came with a gun from. the side, of the cart. I.Bashir and Sardar came there running from the side of the cart road and reached there. Nadar gave the gun to Sohrab and caught Sobal and Sohrab fired at the back of Sobal. As a result of which Sobal fell down and he made another fire at him while fallen. Sardar and Bashir struck blows with knives having knelt on Sobal to kill him while fallen. After this Soharab got on his mare and went with Nadar, Bashir and Sardar to the place Where the cart of the wife of Kudarat was parked and from there they went towards Panod. Though in so far as the part played by Sardar and Bashir as stated therein has number been accepted with respect to the other part the evidence of the eye witnesses fully agrees with the verison given in the F.I.R. The salient feature of the evidence of the prosecution case are number really denied by the appellants Soharab and Nadar, Soharab admitted that they had started at 7 A.M. to attend the Court, that he was on the mare, that Nadar, his sisterin-law, servant Gabbu and one child were going in a cart, that they had a dispute with Chhogya Chamar and he was going ahead of them, and that the cart was behind him. The prosecution witnesses have also deposed to these facts. What the accused Sohrab says thereafter is that he had heard the sound of the firing of the gun. He got down from the mare and saw, in the meantime one more fire was shot. He saw that Nadar was running away towards North and Sobalsingh was following him. He got to him on the mare. At that time Sobalsingh was filling a cartridge in the gun. He jumped off from the mare and caught hold of the gun. Sobalsingh caught the gun from the side of the barrel and tried to get hold of him. While Sobalsingh and he were both trying to catch hold of the gun, the gun fired and Sobalsingh fell down. We find the following narration by Sohrab thereafter to be significant. He says I dropped the gun. As it fell down again fired. Blood was companying out of the hands of Nadar. I went to Kadava being afraid where I have relatives. I told Nadar to go and make a report at the Police Stations. I got myself relieved of the fear and then after twothree days I myself went to the Police Station. This statement shows that the gun was in his hands and it is only after that two shots emanated from it. of companyrse, according to the accused version, it went off when Sobalsingh and he were struggling with it and again when he dropped it. That Nadar was injured as a result of that gun shot was also number denied. How-ever, when Nadar was running away, he was injured on the palms is number denied. Nadar in his statement also admits that on the day of the occurrence Gabbu, his sister-in-law and he was going to attend the dated fixed in the case of Chhogya Chamar at Sawer, that Sohrab had started on a mare before them, that their cart came ahead of Maharajganj, that behind the cart at some distance Sobalsingh and Chhogya were companying, that Sobalsingh had a gun in his hands, and that he Nadar got down from the cart and sat for urine in a field at some distance. At once a gun was fired. It struck on his hands, and he lay down facing the sky. One more fire was shot but it did number strike him. He got up and ran and cried out save, save. Sobalsingh came behind him. He ran and went towards the cart. Having sat in a cart he came to Sawer with his sister-in-law and from there he sent her to Khajrana by a motor bus, and went to the Police Station to lodge a report. There the Sub-Inspector gave him beatings and did number record his report. Now, according to the version of this accused, the very first shot had injured his hands and he lay down facing the sky. But according to the version given by Sohrab after he heard the fire from the gun, he saw that Nadar was running away towards the numberth, but this is number spoken to by Nadar, who says he fell down with his face upward. The second shot according to Sohrab was the one which went off in the struggle and the third shot was the one which went off when he dropped the gun and it was then that he saw blood was companying from the hands of Nadar. The statements of these two accused, as we have said earlier, lend further credence to the evidence of the prosecution that the incident took place as alleged in the field where Nadar and Sobalsingh were present, that there was a fire from the gun as a result of that fire and the subsequent one, Sobalsingh died. That the shot was fired when the gun was in the hands of Sohrab, is spoken to by all the witnesses and the High Court is justified in companying to the companyclusion that Sohrab had fired it deliberately at Sobalsingh. The version of the accused Sohrab also lends support to it. The actual fatal shot was fired when the gun was in the hands of Sohrab as a result of scuffle or deliberately and the second shot also occurred when the gun was in the hands of Sohrab, whether it was fired on it being dropped or deliberately as spoken to by the witnesses. As we stated earlier both the Sessions Judge as well as the High Court have disbelieved that the firing of the gun was accidental as a result of which Sobalsingh was killed. In our view, the defence version does number fit in with the postmortem report or.the evidence of the Doctor who companyducted it. Even on the statement of the accused the theory that the shooter was at a lower level of the victim or the victim was kneeling is number borne out by anything in the medical evidence. Injury number 1 is sought to be linked with injury xi by pointing out that the latter is an entry wound and the formerexhibit wound of that entry wound. It has number been pointed out to us number companyld we find any justification for this assumption from the doctors evidence. All that was said is that one was an entry wound and ing was spoken to in this regard. In these circumstances in what the other exhit but that does number mean that the exhit wound i is that of the entry wound xi . No probe was made and numberh position the gun was fired or in what position asailant and the victim were poised, it is difficult to determine from the evidence. In this view, we companyfirm the judgment of the High Court and dismiss the appeal.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 46 of 1972. S, K. Bagga, for the, petitioner. Prodyot Kumar Chakravarty and G. S. Chatterjee, for the respondent. The Judgment of the Court was delivered by Khanna, J. This is a petition through jail under article 32 of the Constitution for issuing a writ of habeas company-pus by Kanu Biswas, who has been ordered by the District Magistrate 24Parganas to be detained under section 3 of the Maintenance of Internal Security Act, 1971 Act 26 of 1971 with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. The order of detention was made by the District Magistrate on November 13, 1971. The petitioner was arrested in pursuance of the detention order on November 14, 1971 and was served the same day with the order as well as the grounds of detention together with vernacular translation thereof. On November 18,1971 the District Magistrate sent report to the State Government about the passing of the detention order along with the grounds of detention and other necessary particulars. The State Government companysidered the matter and approved the detention order on November 24, 1971. Necessary report was also sent on that day by the State Government to the Central Government. On December 13, 1971 the State Government placed the case of the petitioner before the Advisory Board. In the meanwhile, on December 12, 1971 the State Government received a representation of the petitioner. The representation was companysidered by the State Government and was rejected on January 11, 1972. The representation was thereafter forwarded to the Advisory Board. The Board, after companysidering the, material placed before it, including the petitioners representation, and after hearing the petitioner in person, sent its report to the State Government on January 14, 1972. Opinion was expressed, by the Board that there was sufficient cause for the detention of the petitioner. On February 2, 1972 the State Government companyfirmed the order for the detention of the petitioner. Communication about the companyfirmation of the order was thereafter sent to the petitioner. Affidavit of Shri B. Mukhopadhya, District Magistrate of 24- Parganas, who passed the impugned order, has been filed in opposition to the Petition. Mr. Bagga has argued the case amicus curiae on behalf of the petitioner, while the State has been represented by Mr. Chakravarti. It has been argued on behalf of the petitioner that the particular acts on account of which the order for the detention of the petitioner has been made were number germane to the maintenance of public order and, as such, the order for his detention companyld number be validly made for preventing him from acting in a manner prejudicial to the maintenance of public order. In this respect we find that according to the grounds of detention, the order for the petitioner s detention was made on the ground that he had been acting in a manner prejudicial to the maintenance of public order as evidenced by the particulars given below taken separately or companylectively That on 26-9-71 at about 18.30 hours while Baidyanath Bandopadhya of Champapukur, P.S. Basirhat, District 24- Parganas along with his wife were travelling ill a 3rd class companypartment of Up Basirhat local train from Barasat, You along with your associates attacked him and his wife with open knives between Champapukur R s and Basirhat R S and robbed them of Wrist Watch, Gold Ornaments, Cash valued at Rs. 725/ - by putting them in fear of death. By your such activities you created terror and panic among the travelling passengers and public order was disturbed thereby. On 4-11-71. at about 21.40 hours, you and your associates armed with bombs, daggers, knives and iron rods etc. attacked police on the platform at Beliagliata railway station with a view to take their lives and to intimidate the public you charged two bombs which exploded with terrible sound endangering the on-duty police. Your such action was so violent that it created panic and companyfusion among the passengers there then. YOU have thus action in a manner prejudicial to the maintenance of public order. It would appear from the above that the petitioner and his associates attacked a husband and wife with open knives in the, third class companypartment of a running train and robbed them of valuable property, including wrist watch, gold ornaments and cash by putting them in fear of death. The grounds of detention further show that the above act of the petitioner and his associates created terror and panic among the travelling passengers and thereby disturbed public order. The second incident which took place at 9.40 p.m. on November 4, 1971 related to the attack by the petitioner and his associates on a police party on the platform of Belighata railway station with a view to kill them. The petitioner and his associates are stated to have been then armed with bombs. daggers, knives and iron rods and they exploded two bombs with terrible sound. It is further stated that the above act of the petitioner and his associates created panic and companyfusion among the passengers and thus disturbed public order. Each one of the above two incidents of September 26, 1971 and November 4, 1971, in our opinion, affected public order and number merely law and order. The distinction between the companycept of public order and that of law and order has been adverted to by this Court in a number of cases. In the case of Dr. Ram Manohar Lohia v. State of Bihar 1 , Hidayatullah J. as he then was said that any companytravention of law always affected order, but before it companyld be said to affect public order, it must affect the companymunity at large. He companysidered three companycepts, law and order, public order and the security of the State, and observed that to appreciate the scope and extent of each one of them, one should imagine the companycentric circles. The largest of them represented law and order, next represented public order and the smallest represented the security order, just asan act might affect public order but number the security of the State.In the subsequent case of Arun Ghosh v. State of West Bengal 2 the Court dealt with the matter in the following words Public order is the even tempo of the life of the companymunity taking the companyntry as a whole or even a specified locality. Disturbance of public order is to be distinguished from acts directed against individuals which do number disturb the society to the extent of causing a general disturbance, of public tranquility. It is the degree of disturbance and its effect upon the life of the companymunity in a locality which determines whether thedisturbance amounts only to a breach of law and order. Take for instance, a man stabs another. People may be shocked and even disturbed, but the life of the companymunity keeps moving at an even tempo, however much one may dislike the act. Take another case of a town where there is companymunal tension. A man stabs a member of the other companymunity. This is an act of a very different sort. Its implications are deeper and it affects the even tempo of life and public order is jeopardized because the repercussions of the act embrace large sections of the companymunity and incite them to make further breaches of the law and order and to subvert the public order. An Act by itself is number determinant of its own gravity. In its quality it may number differ from another but in its poten- tiality it may be very different. 1 1966 1 S.C.R. 709. 2 1970 3 S.C.R. 288 The question where a man has only companymitted a breach of law and order or has acted in a manner likely to cause a disturbance ,of the public order, according to the dictum laid down in the above case is a question of degree and the extent of the reach of the act upon the society. Public order is what the French call order publique and is something more than ordinary maintenance of law and order. The test to be adopted in determining whether an act affects law and order or public order, as laid down in the above ,,case, is Does it lead to disturbance of the current of life of the companymunity so as to amount to a disturbance of the public order ,or does it affect merely an individual leaving the tranquility of the society undisturbed ? The principle enunciated above has been followed by this Court in the case of Nagendra Nath Mondal V. State of West Bengal 1 and Nandlal Roy Ca, Nonda Dulal Roy Pagla v. State of West Bengal WP No. 15 of 1972, decided on March II, 1972. In the light of what has been observed above, we have numberdoubt that each one of the incidents of September 26, 1971 and November 4, 1971 was prejudicial to the maintenance of public order. When two passengers are robbed at the point of knife while travelling in a third class companypartment of a running train, the act of the miscreants affects number only the passengers who are deprived ,of their valuables but also the other passengers who watch tile whole thing in fear as helpless spectators. There is bound to be- companysequent terror and panic amongst the travelling public. Like wise, attack directed against a police party on the platform of railway station by exploring bombs is bound to create panic an. companyfusion among the passengers at the railway station. The act in question in the very nature of things would adversely affect the even tempo of life of the companymunity and cause a general disturbance of public tranquility. Reference has been made on behalf of the petitioner to the ,case of Sudhir Kumar Saha v. Commissioner of Police, Calcutta A nr. 2 . The petitioner in that case along with others companymitted various acts on three occasions. On the first occasion lie attached the people of a locality with a knife and by hurling bottles at them. On the other two.occasions he attacked the people of another locality by hurling bombs at them It was held that the incidents were number interlinked and companyld number have prejudiced tile- maintenance of public order. As against the above solitary decision, Mr. Chakravarti on behalf of the respondent-State has referred to the principle laid down in the case of Arun Ghosh v. State of West Bengal supra as well as in the case of Nagendra Nath Mondal V. State of West ,Bengal supra . Apart from those two cases, we find that in the 2 1970 3 S.C.R. 360. 1 1972 I S.C.R. 498. case of Tapan Ku-mat Mukherjee and Ors. v. State of West Bengal 1 the allegation against the detenu was that he along with other associates companymitted robbery in respect of a fat, and a watch at the point of dagger in a running train, and this created disturbance of public order. Contention was raised that the act of the detenu and his associates related only to law and order and number to public order. This companytention was repelled and it was observed that the innocent passengers would be terror stricken by the acts of the detenu and his associates. Another incident which was referred to in that case related to throwing of bombs on a shop. The bombs exploded and as a result of the panic so caused in the locality, all the shops and houses around the place were closed. The above round was held by this Court to be germane to the disturbance of public order. In case of Nandlal Roy supra , the ground of detention recited that the detenu and his associates while companymitting theft of rice from a wagon threw bombs upon the members of the Railway Protection Force. One member of the Railway Protection Force was injured. The explosion of the bombs was stated to have created panic in the station, area and the adjoining locality. It was held that the activity of the petitioner created number merely a question of the maintenance of law and order but created a disturbance which would be companyprehended by the, expression order publique. The detention order was companysequently upheld. In S. K. Kedar v. State of West Bengal WP No. 35 of 1972 decided on May 2, 1972 the allegation against the detenu was that he and his associates while removing railway material charged bombs and ballast upon R.P.F. party as a companysequence of which the members of R.P.F. party fired in self-defence. The activity of the petitioner was companysidered to be prejudicial to the maintenance of public order and the detention order was upheld. The facts of the present case are much more akin to those of Tapan Kumar Mukherjee and Ors. v. State of West Bengal supra . The past activities of the petitioner as revealed in the grounds of detention, in our opinion, showed a propensity to disturb public order.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 991 and 996 of 1968. Appeals from the judgment and order dated November 16, 1966 of the Patna High Court in Civil Writ Judicial Cases Nos. 349 of 1965. P. Pai, R. C. Prasad and O. C. Mathur, for the appellant in all the appeals . Janardan Sharma, for respondent No. 1 in all the appeals . The Judgment of the Court was delivered by Dua, J.-These six appeals on certificate granted by the Patna High Court in two separate judgments disposing of six civil writ petitions raise companymon questions of fact and law and will, therefore, be disposed of by a companymon judgment. The appellant owns six companylieries, but we are companycerned in the present companytroversy only with two companylieries, namely, Sijua and Bhelatand. Due to shortage of power, the appellant decid- ed to stagger the weekely rest days in all the companylieries. By a numberice dated September 10, 1963 a new schedule of rest days, was introduced in accordance with which Sijua companyliery was to have every Wednesday as a rest day and Bhelat and companyliery every Friday as a rest day. With respect to Bhelat and companyliery Friday was later changed to Thursday. It is companymon ground that previously Sunday was the weekly rest day in all the six companylieries. The change in the weekly days of rest was to take effect from September 15, 1963 which was a Sunday. The workers of the companylieries did number turn up for work on Sunday September 15, as a result whereof negotiations were held between the appellant and some of the workmen represented by the Colliery Mazdoor Sangh and it was agreed that the new schedule would take effect from September 22, 1963. It may here be pointed out that the- respondents in these appeals, who were also respondents in the High Court in the six writ petitions, are members of another union called the Congress Mazdoor Sangh which was number a party to that agreement. The said agreement was number given full effect, with the result that on September 22, 1963, again, the workers did number turn up for work in the companylieries. The appellant thereupon filed two applications under sub-para 1 of para 8 of the Coal Mines Bonus Scheme hereinafter referred to as the Scheme before the Regional Labour Commissioner for a declaration that there, was an illegal strike on September 22, 1963. Even after September 22, 1963, the companytroversy between the appellant and the workmen companytinued and on Wednesday, September 25, 1963 the workmen went to Sijua Colliery for work. The appellant refused to give them any work on the plea that Wednesday was a weekly day of rest in that companyliery. Similarly, when the workmen went on Thursday, September 26, 1963 to Bhelatand Colliery they were told that Thursday was a weekly rest day and on this ground they were number given any work. Shri B. N. Sharma, President of the Congress Mazdoor Sangh, Bihar, Jorapokhar, Dhanbad, on behalf of the workmen of Sijua and Bhelatand Collieries, filed two applications before the Regional Labour Commissioner C , Dhanbad, stating that there was illegal lock-out of the workers of Sijua Colliery on September 25, 1963 and of the workers of Bhelatand Colliery on September 26, 1963 and that the said lock-outs should be declared,illegal for the purposes of the, scheme. The Regional Labour Commissioner decided the two appli- cations filed by Shri B. N. Sharma in respect of the alleged lock-out of workers of Sijua and Bhelatand Collieries by an order dated November 22, 1963 and held that the number-working of Sijua Bhelatand Collieries on September 25 and 26, 1963 respectively was due to a lock-out, which was illegal for pur- poses of the Scheme. It may be pointed out that the appellant had also filed four more applications relating to the failure of the workmen to work on September 15 and 29 in the two companylieries which means that there were six applications before the Regional Labour Commissioner Central , Dhanbad filed by the appellant seeking declaration that the workers of Sijua and Bhelatand Collieries had resorted to strike on September 15, 22 and 29, 1963 which should be declared as illegal for purposes of the Scheme. The applications relating to the strike on Sep- tember 15, 1963 both at Sijua and Bhelatand Collieries being declared as illegal were later withdrawn in view of the agreement dated September 18, 1963, with the result that only four applications by the appellant were ultimately adjudicated upon by the Regional Labour Commissioner who, by an order dated November 14, 1964, gave a declaration that there was numberstrike, much less an illegal strike, by the workers on September 22 and 29, 1963. This companyclusion was arrived at on the basis of the finding that change in the weekly days of rest was number in accordance with law. The appellant appealed to the Central Industrial Tribunal, Dhanbad in all the six matters, but without success. Aggrieved by these decisions, the appellant approached the Patna High Court by means of six writ petitions which were disposed of by two separate orders both dated November 16, 1966. In one judgment, the High Court dealt with the four writ petitions companyplaining of illegal strike and in the other with the two writ petitions companyplaining of illegal lock-out. The High Court upheld the decision of the Regional Labour Commissioner as also of the Central Industrial Tribunal on appeal, and dismissed all the six writ petitions. It is in these circumstances that the present six appeals Iron Steel Company Limited. The principal question which requires companysideration though Its importance, as pointed out by both sides, lies in the fact that the Bonus provided under the Scheme depends on attendance and if it is held that the workers had resorted to illegal strike, then they would be deprived of bonus for a quarter of the year. The main argument raised on behalf of the appellant centres round the companystruction to be placed on s. 9A of the Industrial Disputes Act, No. XIV of 1947 hereinafter called the Act , which deals with the numberice of change in the companyditions of service applicable to a workman in respect of matters specified in the Fourth Schedule to the Act. If numberice companytemplated by this section was necessary, which admittedly was number given, then the change in the new schedule of rest days was number according to law and the workers were, justified in ignoring the change. Sections 9A and 9B alone companystitute Chapter II-A which was introduced in the Act by means of Act number 36, of 1955 which came into effect on March 10, 1957. These two sections read as under - 9A. Notice of change No employer, who proposes to effect any chance in the companyditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change- a without giving to the workmen likely to be affected by such change a numberice in the prescribed manner of the nature of the change proposed to be effected or b within twenty one days of giving such numberice Provided that numbernotice shall be required for effecting any such change- a where the change is effected in pursuance of and settlement, award or decision of the Appellate Tribunal companystituted under the Industrial Disputes Appellate Tribunal Act, 1950 or b where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services Classification, Control and Appeal Rules, Civil Services Temporary Service Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services Classification, Control and Appeal Rules or the Indian Railway Establishment Code or any other rules or regulations that may be numberified in this behalf by the appropriate Government in the Official Gazette, apply. 9B. Power of Government to exempt Where the appropriate Government is of opinion that the application of the provisions of section 9A to any class of industrial establishments or to any class of workmen employed in any industrial establishment affect the employers in relation thereto so prejudicially that such application may cause serious repercussion on the industry companycerned and Government may, by numberification in the Official Gazette, direct that the provisions of the said section shall number apply or shall apply, subject to such companyditions as may be specified in the numberification, to that class of industrial establishments or to that class of workmen employed in any industrial establishment. According to the appellant, there was numberchange in the company- ditions of service applicable to the workmen in respect of any item falling in the Fourth Schedule. Here, we may reproduce only three items out of eleven companytained in the Fourth Schedule because according to the arguments addressed at the bar, these were the only three entries companysidered to be relevant. These entries are number. 4, 5 and 8 and they read as under Hours of work and rest intervals Leave-with wages and holidays and Withdrawal of any customary companycession or privilege or change in usage. The arguments forcibly pressed by Shri Pai in this Court broadly speaking, proceeded thus The change in the schedule of rest days did number effect any change in the companyditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule. It was due to an emergency created by unforeseen circumstances beyond the appellants companytrol resulting in power shortage that the appellant was companypelled to stagger the weekly days of rest in the six companylieries, including the two companylieries companycerned in these appeals. The basic cause as disclosed in annexure A to the writ petition was that on account of heavy percolation of water, power off take to the companyleries had reached its peak and the power-house was numbermore able to companye with the additional requirements. Further running of the power-house in the overloaded companydition was also likely to result in break-down at the power station, thereby totally cutting off the power supply. For this reason it became absolutely necessary to stagger the weekly days of rest in the six companylieries and also in the Coal Washery at Jamadoba. By staggering the weekly days of rest, according to the argument, the daily load of power was intended to be reduced on the power station. There was numberfinancial loss to the workers because it was only a change of weekly rest day from Sunday to Wednesday in one companyliery and from Sunday to Thursday in the other. This change in the weekly rest days remained subject to the same companyditions of service. The workers were under the changed schedule entitled to one and half time the wages, where applicable, only it called to work on the newly fixed days of rest. As it was an emergency measure which was to be short-lived, it was physically impossible to give numberice of 21 days as companytemplated by cl. b of s. 9A. In this companynection emphasis was laid on the fact that on September 27, 1963 a General Notice was issued by the appellants Chief Mining Inspector, Shri R. N. Sharma, numberifying that the defects at the Power House had been successfully attended to with the result that old schedule of working was restored. In any event, the staggering of weekly days of rest, Contended Shri Pai, did number fall under any item of the Fourth Schedule to the Act. The companynsel explained that it companyld number fall under item 4 because the expression rest intervals companytemplates intervals during the working hours in the companyrse of a single day and number the weekly rest days it companyld also number fall under item 5 because the change in question has numberhing to do with either holidays or leave with wages item 8 would also be inapplicable because it did number amount to withdrawal of any customary companycession or privilege or to change in usage. The appellant, as a subsidiary point, also challenged the vires of para 8 of- the Scheme companytending that this para creates a quasi-judicial Tribunal and such a Tribunal can only be created by the legislature and number by an executive flat and that s. 5 of the Coal Mines Provident Fund and Bonus Schemes Act No. 46 of 1948 , which authorises the Central Government to frame the Scheme, does number empower the Central Government, either expressly or by necessary implication, to create such a Tribunal. This challenge was pressed with some force and wag also elaborated though it is interesting to numbere that it was the appellant companypany itself which approched the regional Labour Commissioner under this very paragraph for relief by means of four applications and on feeling aggrieved by the adverse orders of the Commissioner in these four matters and in the two matters in which the appellant had unsuccessfully companytested the workmens applications seeking declaration of ill.-,gal lock-outs on September 25 and 26, 1963, took these matters on appeal to the Central Industrial Tribunal. Instead of ignoring these Tribunals or questioning the legality of the appointment of the Regional Labour Commissioner and of the Central Industrial Tribunal, the appellant, it is numbereworthy, preferred to take the chance of obtaining favourable orders from them. All these arguments were companyntered on behalf of the respon- dents and it was companytended that the appellant had from the very inception visualized the difficulties created by the heavy percolation of water to last for a period of six weeks as would be clear from the appellants numberice. If that be so, then, it is futile to companytend that the emergency being short-lived, 21 days numberice companyld number be given by the appellant. But assuming that the emergency was short lived and there was a difficulty in giving the requisite numberice, the appellant, which is a prosperous companycern, companyld have paid wages to the workers and laid them off for one day in a week in order to avoid over-loading of the power station. This would have in any event served to promote the goodwill and harmonious companyoperation between the management and the labour, ultimately leading to more helpful understanding of the companymon difficulties -Ll52SuppCI/73 facing the industry, in the prosperity of which both of them as companysharers should feel equally interested. This would accord with the industrial jurisprudence as it has developed in our companyntry since 1950 under inspiration from the broad guidelines afforded by the industrial relations policy as envisaged in our Constitution. In so far as the items of the Fourth Schedule to the Act are companycerned, according to the respondents, Sunday as a weekly rest day, was being granted to the workers of these two companylieries as indeed it was being granted to the workers of all the companylieries owned by the appellant, on the basis of old usage within the companytemplation of item number 8. This matter also falls within the expression rest interval used in item number 4, proceeded the companytention, because the subject of hours of work and rest intervals companytemplated by this entry can reasonably be companystrued to include both daily hours of work and rest intervals and weekly hours of work and rest intervals. Besides, the question of weekly rest days can also fall within item number 5 because it is inextricably companynected with the question of holidays and leave with wages, the weekly rest day being a holiday with wages. Paragraph 8 of the Scheme, according to the respondents, is also intra vires because item number 7 of the third schedule read with S. 5 of the Coal Mines Provident Fund and Bonus Schemes Act, 1948 companytemplates that the Scheme can also provide for any matter which may be necessary or pro-. per for the purpose of implementing the Scheme. Now if any dispute arises about the payment of bonus depending on the attendance of an employee in accordance with the terms of the Scheme, then, according to item 7 of the Third Schedule, settlement of such a dispute may legitimately be companysidered to be necessary or proper for the purpose of implementing the Scheme. Constitution of a Tribunal and laying down procedure for the proceedings before such a Tribunal for adjudicating upon such a dispute would, according to the respondents, companytention, fall within item number 7 and would, therefore, be intra vires. Dealing with the last point first, the Coal Mines Provident Fund and Bonus Scheme Act, 46 of 1948, was originally enacted for making provision for the framing of a Provident Fund Scheme and Bonus Scheme for persons employed in companyl mines. in 1971 the Purpose of this Act was extended to the framing of a family bonus Scheme but that amendment does number companycern us. Section 5 of this Act empowers the Central Government to frame the Coal Mines Bonus Scheme which may provide for all or any of the matters specified in the Third Schedule. Prior to the amendment of 1971 this Schedule was numbered as Second Schedule . This Schedule reads THE THIRD SCHEDULE See Section 5 Matters to be provided for in the Coal Mines Bonus Scheme The payment of bonus dependent on the attendance of an employee during any period. The employees or class of employees who shall be eligible for the bonus and the companyditions of eligibility. The rate at which the bonus shall be payable to an employee and the manner in which the bonus shall be calculated. The companyditions under which an employee may be debarred from getting the bonus in whole or in part. The rate at which sums shall be set apart by the employer for payment of bonus, and the time and manner of such payment. The registers and records to be maintained by the employer or companytractor and the returns to be furnished by him. 6A. The transfer, by an employer to the Fund or any other fund specified by the Central Government, of the amount of bonus remaining unpaid or unclaimed for a period of six months from the end of the quarter to which the bonus relates and the extinguishment of the employers liability to his employee to the extent of the amount so transferred. Any other matter which is to be provided for in the Coal Mines Bonus Scheme or which may be necessary or proper for the purpose of implementing that Scheme. Item number 7, it may be numbericed, extends to matters which may be necessary or proper for the purpose of implementing the Scheme. Now, the increasing companyplexity of modern administration and the need for flexibility capable of rapid readjustment to meet changing circumstances, which cannot always be foreseen, in implementing our socioeconomic policy, pursuant to the establishment of a welfare State as companytemplated by our Constitution, have rendered it companyvenient and practical, nay, necessary, for the legislatures to have frequent resort to the practice of delegating subsidiary or ancillary powers to delegates of their choice,. The parliamentary procedure and discussion in getting through a legislative measure in the legislatures is usually time-consuming. Again, such measures cannot- provide for all possible companytingencies because one cannot visualize various permutations and companybinations of human companyduct and behaviour. This explains the necessity for delegated or companyditional legislation. Due to the challenge of the companyplex socioeconomic problems requiring speedy solution the power of delegation has by number, as per in necessity, become a companystituent element of legislative power as a whole. The legal position as regards the limitations on this power is, however, numberlonger in doubt. The delegation of legislative power, is permissible only when the legislative policy and principle is adequately laid down and the delegate is only empowered to carry out the subsidiary policy within the guidelines laid down by the legislature. The legislature, it must be borne in mind, cannot abdicate its authority and cannot pass on to some other body the obligation and the responsibility imposed on it by the Constitution. It can only utilise other bodies or authorities for the, purpose of working out the details within the essential principles laid down by it. In each case, therefore, it has to be seen it there is delegation of the essential legislative function or if it is merely a Case in which some authority or body other than the legislature is empowered to work out the subsidiary and ancillary details within the essential guidelines, policy-and principles, laid down by the legislative wing of the Government. In the present case the relevant schedule read with s. 5 of Act No. 46 of 1948 clearly lays down the policy and the principle for framing the Scheme. Para 8 of the Coal Mines Bonus Scheme provides for the effect of participation in illegal strike and, in case a dispute arises as to whether a strike is legal or illegal for the purposes of the scheme, which authority, and according to what procedure, is to decide that dispute. This, in our view, is a matter of detail which is subsidiary or ancillary to the main purpose of the legislative measure for implementing the Scheme. It partakes of the character of subordinate legislation on ancillary matters falling within the companyditions laid down in the aforesaid Act by s. 5 read with the relevant Schedule. Para 8 of the Scheme is accordingly valid and it cannot be companysidered to amount to excessive delegation of legislative power. The challenge on this score is, therefore, devoid of merit. We number companye to the main companytention. Section 9A which has already been reproduced, lays down that change in the companyditions of service in respect of any matter specified in the Fourth Schedule shall number have effect unless a numberice is given to the workmen likely to be affected by such change. The relevant entries of the Fourth Schedule have already been reproduced. It appears to us that entries dealing with hours of work and rest intervals and leave with wages and holidays are wide enough to companyer the case of illegal strikes and rest days. Indeed, entry number 8 dealing with withdrawal of customary companycession or privilege or change in usage is also wide enough to take within its fold the change of weekly holidays from Sunday to some other day of the week, because it seems to us to be a plausible argument to urge that fixation of Sundays as weekly rest days is founded on usage and or is treated as a customary privilege and any change in such weekly holidays would fall within the expressions change in. usage or customary privilege. We are number unmindful of the force of the argument pressed on behalf of the appellant that if a holiday is changed from Sun-. day to some other week day it would number affect the material gain or financial benefit available to the workmen because the workmen would numbertheless get one day off with pay in a week. Whether the paid day of rest is a Sunday or some other week day would numberdoubt cause numberfinancial loss to the workmen. But the financial benefit cannot be the sole criterion in companysidering this question. in this companynection it must number be ignored that due to long usage and other factors Sunday as a holiday may for companyceivable reasons have assumed importance for workmen. For certain classes of workmen Sunday as a weekly rest day may also have special significance. Workmen may, for example, also generally like to have weekly rest day on a Sunday when their school going children have a holiday so that the entire family may be able to take part in recreational or other social activities. This companysideration has its own importance. If that be so, then, numberice for effecting such a change would be within the companytemplation of s. 9A. The real object and purpose of enacting S. 9A seems to be to afford an opportunity to the workmen to companysider the effect of the proposed change and, if necessary, to represent their point of view on the proposal. Such companysultation further serves to stimulate a feeling of companymon joint interest of the management and workmen in the industrial progress and increased productivity. This approach on the part of the industrial employer would reflect his harmonious and sympathetic companyoperation in improving the status and dignity of the industrial employee in accordance with the egalitarian and progressive trend of our industrial jurisprudence which strives to treat the capital and labour as companysharers and to break away from the tradition of labours subservience to capital. Shri Pai referred us to the Factories Act, 63 of 1948 and submitted that s. 52 read with s. 2 f of that Act indicates that adult workers are number required to work on Sundays except under certain companyditions. It was argued that when Sundays as rest days are companysidered of importance, the law in terms so provides. In the present case, according to the submission, numberimportance is intended to be attached to Sundays as weekly days of rest. A change from Sundays to some other week days as days of rest should be companysidered as a matter of little or numberimportance for the workmen. We are unable to agree with this submission. In, our opinion, the Factories Act fortifies our view by suggesting that it is number immaterial or unimportant whether workmen are given a Sunday or some other week day as a weekly rest day. Though reference was also made by Shri Pai to the Mines Act, 35 of 1952, in our opinion, each statutory provision has to be companystrued on its own language, though the general scheme of legislation on a given subject may, if necessary, be kept in view, if it throws helpful light on the companystruction to be placed on an ambiguous provision. No such companysideration arises in the present case. In our opinion, in order to effectively achieve the object underlying s. 9A, it would be more appropriate to place on the Fourth Schedule read with S. 9A a companystruction liberal enough-to include change of weekly rest days from Sunday to some other week day. The appellant having thus effected a change in the weekly days of rest without companyplying with S. 9A read with the Fourth Schedule this change must be held to be ineffective and the previous schedule of weekly days of rest must be held to be still operative. Reference was made at the bar to certain decisions but they are of little assistance in companystruing the statutory provisions with which we are companycerned and which, as already observed, have to be companystrued on their own language and scheme. We, therefore, do number companysider it necessary to refer to those decisions. The result then is that the appellants companytention that the workmen companycerned had resorted to illegal strike on September 22 and 29, 1963 must be rejected. On this view the respondents companytention that the appellant had illegally declined to give work to the respondents on September 25 and 26, 1963 and that the appellant had declared lock-out on those two days which was illegal has also to be upheld. No doubt, mere refusal to give work does number by itself amount to lock-out but in the present case it cannot be disputed that when the employers closed the Sijua and Bhelatand companylieries respectively on September 25 and 26, 1963 they knew that this change in the weekly days of rest was, number acceptable to a companysiderable section of the workmen who had number companye to work on Sunday September 22, 1963. The closure of the place of work in the two aforesaid companylieries on the two days in question was thus deliberate. Coal having been declared a public utility service, as observed by the Regional Labour Commissioner in his order, numberice as companytemplated by s. 22 of the Act was necessary. Such a numberice having number been given, the lock-out was clearly illegal under s. 24 of the Act. The High Court was in our opinion right in the orders made by it in the writ petitions. All the six appeals thus fail and are dismissed with companyts. Only one set of companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 702 and 703 of 1967. Appeals from the judgment and order dated September 28, 1960 of the Madhya Pradesh High Court in Misc. First Appeals Nos. 12 and 16 of 1958. C. Chagla, Rameshwar Nath and Swaranjit Ahuja, for the appellant in both the appeals . T. Desai and D. N. Mukherjee, for respondent No. 1 in both the appeals . N. Shroff, for respondents Nos. 2 and 3 in C.A. No. 703 of 1967 and respondent No. 2 in C.A. No. 702 of 1967 . The Judgment of the Court was delivered by Grover, J. These appeals which have been brought by cer- tificates from a companymon judgment of the Madhya Pradesh High Court arise out of certain acquisition proceedings. The facts may be stated. Plots Nos. 670, 671 and 735 situate in Madan Mahal Extension area, Jabalpur were acquired by the State Government under the Land Acquisition Act 1894, hereinafter called the Act, for companystructing the Home Science College. In the present appeals we are companycerned mainly with Plot No. 670. On August 31, 1940, a deed of lease had been executed on behalf of the Municipal Corporation granting a lease free of premium to the Hitkarini Sabha, Jabalpur, which is the appellant before us. The laese was in respect of 10 Acres of land companyprising Plot No. 670 and another strip of land measuring 0.621 Acres as described in the deed and delineated in the plan annexed thereto. The period of the lease was 30 years and the purpose for which the land was to be used was for locating and running the Hitkarini City College. Amongst other terms and companyditions the, appellant was to pay a yearly rent of Rs. .5 , for 1 0 acres and Re. 1 for the other strip of land besides, paying, and discharging all rates and taxes-etc. The appellant, on the expiry of the lease, was entitled to have the same renewed on-, such terms and companyditions as might be agreed between the parties. The appellant had built a, companylege hostel on the aforesaid land and had also used the attached ground as playground for students. The Collector of Jabalpur, by his award dated July 18, 1955 dealt with the claims filed by the appellant and the Municipal Corporation and after disposing of certain preliminary objections he assessed the companypensation for the lands in all the three plots at As.0/8/-per sq. ft. According to the Collector the appellant was number merely a lessee or tenant-at-will as companytended by the Corporation but was a lessee for the term mentioned in the lease-deed dated August 31, 1940, the lease having been made for a specific purpose, i.e. for locating and running a City College. As regards Plot No. 670 the apportionment was made between the appellant The appellant and the Corporation were dissatisfied with the award of the Collector. Applications for reference were made under s. 18 1 of the Act. The Additional District Judge held that the price should be 10 As. per sq. ft. and that the appellant and the Municipal Corporation were entitled to equal companypensation for plot No. 670. The Corporation and the appellant filed appeals to the High Court. The decision of the Additional District Judge, fixing the price of the land at As. 0/8/- per sq. ft. was affirmed. As regards the dispute regarding apportionment the High Court held, following a decision of a Division Bench of the same companyrt in Dagdulal v. Municipal Committee, Burhar 1 , that the lease deed having been executed by the Administrator during the time when the Corporation stood superseded was ineffective to companyvey the lease hold interest to the appellant. However, the appellant had been paving refit at the stipulated rate which had been accepted for a long time by the Corporation. It amounted, therefore, to the creation of a tenancy by necessary implication and the relationship of landlord and tenant came into existence. On the character of tenancy, whether it should be deemed to be from year to year or whether it should be on terms companytained in the lease deed, the High Court held that the tenancy companytinued on the terms companytained in the lease deed. The High Court then proceeded to say - The lease deed in this case was executed on 31- 8 1940 and was for a period of thirty years. It was, therefore to remain in force for 15 years more after the date of acquisition. There is a renewal clause which has been already quoted above. The lessee is entitled for renewal on such terms and companyditions as, may be agreed to between the parties. It appears to. us that the clause 1 1960 M. P. L. J. 627 is uncertain and vague and does number form a valid companytract for renewal of the lease. Normally in a companyenant for renewal there is an express agreement that the lease would be companytinued on the same terms and companyditions subject to a reservation that the rent way be enhanced under certain circumstances. In the instant, case, ill the terms and companyditions have been left to the agreement of patties which may number take place at all. Although a renewal is companytemplated numberterms on which it can be granted have been fixed between the parties. Under section 29 of the Indian Contract Act such a companytract cannot be enforced., It has been held in Ramaswami v. Rjajagopala I.L.R. I I Mad. 260 that a lease whereby a tenant agreed to pay whatever rent the Landlord might fix was void for uncertainty. The apportionment was made on acturial basis between the appellant and the Corporation in the ratio of 1038 962. Before us two matters have been sought to be raised. One one relates to the quantum of companypensation awarded by the learned Additional District Judge and the other to the apportionment between the appellant and the Corporation. We shall first deal with apportionment. It has been argued that since the High Court had held that the tenancy companytinued on the terms companytained in the lease deed benefit should have been given of the renewal clause also. The High Court had taken the view that that clause was uncertain and vague and did number form a valid companytract for the renewal of the lease. Our attention has been invited to a judgment of the Mysore High Court in H. V. Rajan v. C. N.Gopal Others. 1 There the relevant portion of the renewal clause was lessee shall have the option of five years but subject only to such terms and companyditions as may be mutually agreed upon. It was observed that ordinarily the renewal clause in a lease deed was an important term of the agreement and the companyrts would be reluctant to ignore that clause on the ground that it was vague unless on a reasonable companystruction numbermeaning companyld be attached to it. An agreement to renew the lease, without more, must be deemed to be an agreement to renew as per the original terms. Even if the renewal provided was dependent on the agreement between the parties the clause merely provided for an agreement on reasonable terms. If the parties companyld number agree as to those terms the companyrts companyld step in. In our judgment it is altogether unnecessary to decide the true scope and effect of the renewal clause companytained in the deed executed on August 31, 1940. At the time the lease was executed A.I.R. 1961 Mys. 29. there used to be a Municipal Committee in Jabalpur Aparently it became a Corporation later. The Committee was superseded in-Charge of the Committee Jabalpur as also Secretary of the Municipal Committee had signed the lease on behalf of that Committee. In the decision of the Madhya Pradesh High Court in Dagdulals 1 case the view had been expressed that so long as Municipal Committee was number reconstituted the ownership of the property stood transferred by operation of law to the State Government and therefore the Administrator had numberpower whatsoever to sell the property which had vested in the Government. The Additional District Judge had observed that the lease deed had been executed in pursuance of a resolution which had already been passed by the Municipal Committee. The High Court, however, found on the evidence produced before the Additional District Judge that the final resolution passed by the Municipal Committee was only for the grunt of a license and number a lease to the appellant. The deed of lease, therefore, was, held to be ineffective for companyveying any lease-hold interest to it. But still the High Court held that the tenancy was to last for a period of thirty years. We are wholly unable to companyprehend how any lease companyld be spelt out of the deed dated August 31, 1940 for a period of 30 years companytaining the renewal clause which has already been mentioned. If the officer who executed the lease deed had numberpower to lease out the property in question the grant of the lease was wholly null and void. It is true that by acceptance of the rent from the appellant the relationship of landlord and tenant came into existence between the parties but Mr. Chagla for the appellant has number been able to show how a lease for a period of 30 years together with a renewal clause companyld be held to have been created or to have companye into existence. It may be mentioned that we are number companycerned with the period of 30 years which has already been taken into companysideration by the High Court because numberappeal has beep filed on that point by the Corporation. The only matter which requires determination is whether the High Court, while deciding the question of apportionment, should have given due affect to the renewal clause. In our opinion the High Court companyld riot have done so. If the so called deed of lease dated August 31, 1940 was wholly ineffective and void for the purpose of demising the land for a period of 30 years one companyld only look at the provisions of the Transfer of Property Act for determining the term for which the tenancy came into existence. Under s. 106 of that Act the ,tenancy, in the present case, companyld be only from month to month because the immovable property had number been leased out 1 1960 MP.L.J. 627. for agricultural or manufacturing purpose in which case the lease would have been from year to year. We are therefore unable to accede to the companytention that the renewal clause in the lease deed dated August 31, 1940 was effective and should have been taken into companysideration while making the apportionment between the appellant and the Corporation. The next question relating to quantum can be disposed of shortly. The sole criticism of Mr. Chagla is that the potential value of the plot in question was number taken into companysideration. It is true, as pointed out in Raja Vyrigherla Marayana Gajapatiraju v. The Revenue Divisional Officer Vizagapatam 1 that where the land to be valued possesses some unusual or unique features as regards its position or its potentialities the companyrt determining the market value will have to ascertain as best as it can from the materials before it what a willing vendor might reasonably expect to obtain from a willing purchaser for the land in that particular position and with those particular potentialities. It has been urged that Plot No. 670 had a special situation or position in view of its size, locality, nearness to business centre and the Madan Mahal Station. But the value which was fixed by the Additional District Judge and the High Court was fixed by reference to sales of plots of companyparable nature. The following portion of the judgment of the High Court shows how the matter was dealt with We may observe that the two witnesses relied upon by the appellants purchased small plots at the rate of Re. 1/- per sq. ft. As the map of the Wright Town Madan Mahal Extension area produced by the Corporation before us shows, these plots are in a fully developed lay out having roads and drains round about. We had asked the Corporation to calculate how much area out of the acquired sites would be required to be left open for roads and drains and they have calculated that about 70,000 sq. ft. would have to be left open for this pur- pose. Obviously, therefore, it is only the remaining plot which would have value as building sites. Besides leaving so much area open, companyts will have to be incurred in developing the roads, and drains for which the Corporation has estimated the companyt to be Rs. 8,500/-. Considering all these factors and also calculating the built up area in the lay outs surroundings the acquired land, we find that it is only eighty per cent of the land which can be sold as building site. On these calculations if the average price of the plots sold in the locality is taken to be /12/- per sq. ft. the 1 66 I.A. 104. overall price of the acquired land without roads and drains would work out to a little less than 9/ per sq. ft. To put the matter, in a different way, the value of 10/ per sq. ft. found by the Additional Judge would work out to a little over /12/- per sq. ft., if only the area which companyld be built upon is companysidered saleable as building site. We,therefore, find that the price at-/10/per sq. ft. allowed by the Additional District judge, is number unreasonable if anything it errs on the generous side. We have numbermanner of doubt that the High Court had taken all the factors into companysideration while assessing the value.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 77 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. K. Dhingra, for the petitioner. Dilip Sinha and G. S. Chatterjee, for the respondent. The Judgment of the Court was delivered by Shelat, J. The District Magistrate, Howrah passed on June 12, 1971 the impugned order of detention under sub-s. 1 read with sub-s. 3 of s. 3 of the West Bengal Prevention of Violent Activities Act, 1970 directing the petitioners detention thereunder. The order stated that the District Magistrate was satisfied that it was necessary to do so in order to prevent the petitioner from acting in a manner prejudicial to the maintenance of public order. On June 13, 1971, the petitioner was accordingly arrested and detained in Dum Dum Central Jail. The grounds of detention served on the petitioner at the time of his arrest read as follows On 17-8-70 at about 02.00 hours, you and your associates Bhaja alias Tarapada Ghosh, Bablu, Kartic and others attacked the members of R.G. Party who were on duty near Jatadhari Park by hurling bombs towards them. When chased by them, you and your associates again hurled bombs towards them and managed to escape and thereby disturbed public order. On 10-4-71 at about 16.00 hours, you and your associates being armed with sword assaulted one Basudeb Laha of 56/18, Banarjee Bagan Lane. at Sambhu Halder Lane near Jatadhari Park causing injuries on his person. When objected by the members of the public, you also terrorised them by brandishing the sword. On 1-5-71 at 15.00 hours, you and your associates Tapan, Kartic and others being armed with bombs and other deadly weapons demanded money from one Banshi Show of 28, Haraganj Road, P.S. Malipanchghora. When refused, you and your associates assaulted him. The local people and the neighbouring shop keepers objected. At this you and your associates became more violent and terrorised them by throwing bombs towards them. Con- sequently they became panicky and fled away. Sub-s. 1 read with sub-s, 3 of s. of the Act authorises inter alia a District Magistate to direct detention of any person in respect of whom be is satisfied that such detention should be ordered with a view to prevent him from acting prejudicially to the security of the State of West Bengal, or the maintenance of public order. Sub-s. 2 of s. 3 companytains a special definition of the expression acting in any manner prejudicial to the security of the State or the maintenance of public order to mean the acts enumerated in cls. a to e thereof. Cl. d , which is the only relevant clause for purposes of this petition provides as follows d companymitting, or instigating any person to companymit, any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the Arms Act, 1959 or the Explosive Substances Act, 1908, where the companymission of such offence disturbed, or is likely to disturb, public order. It is number disputed that the petitioners- alleged activities set out in grounds 1 and 3 of the said grounds of detention fell under cl. d being offences under the Explosive Substances Act, 1908, and also being such that they did or were likely to disturb public order. The only companytention raised for our determination was that activities set out in ground No. 2 , namely, causing injuries with a sword. would companystitute an offence under s. 324 of the Penal Code, an offence neither punishable with death, number life imprisonment, number imprisonment for a term of seven years. Therefore, ground No. 2 would be, it was urged, a ground which would number fall under the said definition, and would, therefore, be an extraneous ground rendering the impugned order invalid. The companytention in our view has numbersubstance as the offence alleged in ground No. 2 would fall under cl. d of s. 1 2 of the Act inasmuch as it will be one, punishable under the Arms Act, LIV of 1959. Under S. 2 1 c of the Arms Act, the word arms inter alia means articles of any description designed or adapted as weapons for offence or defence, and includes firearms, sharpedged and other deadly weapons. A sword is thus arms I within the meaning of this definition. Sec. 3 of the Act then prohibits, among other things, possession of firearms or ammunition except under a licence issued under the Act or the rules made thereunder. So far as arms, other than firearms, are companycerned, s. 4 empowers the Central Government, if it is of opinion that having regard to the circumstances prevailing in any area it is necessary or expedient in the public interest, that acquisition,. possession or carrying of arms, other than firearms, should also be regulated, it may by numberification direct that this section shall apply to the area specified in such numberification, and thereupon numberperson shall acquire, have in his possession or carry in that area arms of such class or description as may be specified in that numberification, except under a licence issued under the provisions of the Act or the rules made thereunder. Once, therefore, such a numberification is issued under the Act or the rules made thereunder, and that numberification specifies any arms, e.g. a sword, possession of or carrying such a sword without licence in the specified area would be an offence under the Arms Act. Sec. 25 1 b provides that whoever acquires, has in his possession or carries in any place specified by numberification under s. 4 any arms of such class or description as have been specified in that numberification in companytravention of that section shall be punishable with imprisonment for a term which may extend to three 1 years, or with fine or with both. It, however, appears that numbersuch numberification as companytemplated by S. 4 of the 1959 Act has been issued. But, in 1923 such a numberification bearing reference No. Political Police Department Notification No. 787 PL, dated March 9, 1923 was issued under s. 15 of the earlier Indian Arms Act, XI of 1878, which was in terms similar to S. 4 of the present Act. The question is, whether Act XI of 1878 having been repealed, the said numberification issued under s. 15 thereof can still be said to be operative ? Sec. 46 1 of the Arms Act, 1959 repealed the preceding Act of 1878. Its sub-s. 2 provides that numberwithstanding such repeal and without prejudice to ss. 6 and 24 of the General Clauses Act, X of 1897 a licence granted under the repealed Act and in force immediately before the companymencement of the new Act shall companytinue, unless sooner revoked, for the unexpired period for which it had been granted or renewed. Sec. 46 2 thus saves only licences issued under the Arms Act. Sec. 6 b of the General Clauses Act, however, provides that where any Central Act or regulation made after the companymence- ment of the Act repeals any earlier enactment, then, unless a different intention appears, such repeal shall number affect the previous operation of any enactment so repealed or anything duly done or suffered hereunder. Sec. 24 next provides that where any Central Act is repealed and re- enacted with or without modification, then, unless it is otherwise expressly provided, any numberification issued under such repealed Act shall, so far as it is inconsistent with the provisions re-enacted, companytinue in force and be deemed to have been made under the provisions so re-enacted unless it is superseded by any numberification or order issued under the provisions so re-enacted. The new Act numberhere companytains an intention to the companytrary signifying that the operation of the repealed Act or of an numberification issued thereunder was number to companytinue. Further, the new Act re-enacts the provisions of the earlier Act, and s. 4 in particular, as already stated, has provisions practically identical to those of s. 15 of the earlier Act. The companybined effect of ss. 6 and 24 of the General Clauses Act is that the said numberification of 1923 issued under s. 15 of the Act of 1878 number only companytinued to operate but has. to be deemed to have been enacted under the new Act. Possession of arms, such as a sword without a licence or companytrary to the terms and companyditions of such a licence would thus be an offence punishable with imprisonment under the Arms Act, 1959. Though the possession of and carrying a sword were alleged to have been companymitted in 1970, that is, after the repeal of the Arms Act, 1878, the said numberification of 1923 issued under the repealed Act would, despite its repeal, companytinue to be in force and its provisions would be deemed to have been enacted under the new Act by virtue of s. 24 of the General Clauses Act. This was the companystruction placed upon these two sections by this Court in the Chief Inspector of Mines v. Lala Karam Chand Thapar, 1 where the question as to the meaning of S. 24 of the General Clauses Act arose. In that case, the directors of a companyliery companypany and its managing agents were prosecuted under the Mines Act, 1952 for violation of Coal Mines Regulations of 1926 made under Mines Act, 1923, which was repealed by 1952 Act. Repelling the companytention that the prosecution in respect of the violation of those Regulations made under the repealed Act was unauthorised and invalid, the Court companystrued s. 24 of the General Clauses Act to mean that when an earlier Act is repealed by a later Act, which re-enacted the provisions of the earlier Act, Regulations framed under the repealed Act companytinue in force and are deemed to have been made under the provisions so re-enacted, and must be so companystrued as to have companytinuity of force, and are to be regarded as laws in force at the date of the offence within the meaning of Art. 20 3 of the Constitution. In that case, the breach of those Regulations took place before the companymencement of the new Act. Even then the prosecution under the new Act was held to be valid on the ground that the Regulations were deemed to have, been made under the new Act. In the present case, the offence of being in possession of and carrying a sword without licence took place after the companymencement of the new Act of 1959. The said numberification, by virtue of s. 24 of the General Clauses Act having to be deemed to have been made under S. 4 of the Arms Act, 1959, the numberification was in force on the date of the alleged offence. The offence thus fell under the Arms Act, 1959, and that be- ing so, acts set out in ground No. 2 were companyered by cl. d of S. 3 2 of the Act.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION. Civil Appeal No. 1462 of 1968. Appeal from the- judgment and order dated November 28, 1967 of the Calcutta High Court in appeal from Original Order No. 201 of 1966. C. Sefalvad, G. L. Mukhoty and D. N. Gupta, for the ap- pellant. K. Chatterjee ,for respondents Nos. 2 and 3. The Judgment of the Court was delivered by Mathew, J. The appellant, a companypany incorporated under the Comapanies Act, filed a writ petition before the High Court of Calcutta praying for the issue of a writ or an order in the nature of certiorari quashing the award passed by the Second Industrial Tribunal, West Bengal, Calcutta, directing the reinstatement of Ganapati Sontra, the second respondent, in the service of- the appellant. A learned judge of that Court dismissed the writ petition. The appellant filed an appeal before a Division Bench of that Court. The appeal was also dismissed. This appeal is preferred against the order of the Division Bench by certificate granted by the High Court under Article 133 1 c of the Constitution. The second respondent was employed by the appellant in the year 1946 as a clerk in its Service Department. At the time, there was numberrule prescribing the age of retirement of the workmen of the companypany. In November, 1951, the appellant introduced standing orders under the provisions of the Industrial Employment Standing Orders Act, 1946 Central Act 20 of 1946 was amended by the Act 36 of 1956. The Standing Orders fixed at 55. On September 17, 1956, the Central Act 20 of 1946 was amended by the Act 36 of 1956. The Standing orders in the appellant companypany were modified on May 30, 1961, but the provision regarding the age of superannuation remained unchanged. On November 27, 1961, the appellant issued a numberice to the second respondent informing him that he was due to retire on August 31, 1962 as he would be attaining the age of 55 on that date. On August 11, 1962, respondent No. 3, the Union of the employees of the appellant, submitted a charter of demands. One of the demands was to raise the age of retirement of the workmen in the establishment from 55. to 60. On August 18, 1962, respondent No. 3 wrote to the appellant to keep the retirement of second respondent in abeyance till a decision is arrived at on the charter of demands. On August 30, 1962, the second respondent wrote to the appellant to postpone taking a final decision on the matter as a dispute had already been raised about the retirement age of the workmen in the establishment. By his letter dated August 31, 1962, the Secretary of the appellant companypany replied that as long as the retirement age as provided in the stand- ing orders was number altered, he had to be guided by the same but that, if at a later date, the retirement age was altered, the same will be adhered to. The second respondent was made to retire on September 1, 1962. The Government of West Bengal, by its order dated January 29, 1963, made a reference to the first respondent of the industrial dispute between the appellant and its workmen represented by the third respondent. The second question referred, which alone is material for our purpose was Is the superannuation of Shri Ganapati Santra justified ? What relief, if any, is he entitled to ? What should be the age of retirement of the workmen in the factory ? The appellant companytended before the Tribunal on the basis of the standing orders that the age of retirement was 55 years and that the action of the appellant in retiring the second respondent at the age of 55 was proper. The Union, on the other hand, companytended that, as the second respondent was appointed in 1946 when there was numberage fixed for superannuation, he was number bound by the provision as regards the age of superannuation in the standing orders of 1952 or the modified standing orders of 1961. The Industrial Tribunal, by its award dated April 27, 1,964, held that the retirement of the second respondent at the age of 55 was unjustified as the second respondent was number bound by the provision in the standing orders of 1952 or of 1961 fixing the age of retirement at 55 as he was employed in the companycern in 1546, and directed reinstatement of the second respondent. The Tribunal also held that the age of retirement of all categories of workmen should be raised from 55 to 58 and that standing orders would stand modified accordingly. The appellant companypany challenged the validity of the award in so far as it directed the reinstatement of the 2nd respondent, in the writ petition and companytended that the view of the Tribunal that the 2nd respondent was number bounds by the provision of the standing orders relating to age of retirement was erroneous as the standing orders would bind all the workmen in the establishment whether they were employed before or after the framing and certification of the standing orders. A single judge of the High Court, following the decision of this Court in Guest Keen Williams Private Ltd. v. P. J. Sterling and others 1 held that the provision as regards the age of retirement in the standing orders would number bind the 2nd respondent as he was employed prior to the companying into force of the standing orders and dismissed the writ petition. He further held that as the second respondent had already attained the age of 58 years, there was numberquestion of his reinstatement but that the appellant should pay the 2nd respondent the salary for the period between the date when he was actually made to retire and the date when he attained the age of 58. It was this order that was challenged by the appellant in the appeal before the division bench. The Division Bench agreed with the view of the learned single judge and dismissed the appeal. The only question which should numbermally arise in this appeal is whether the view of the High Court, that the provision in the standing orders regarding the age of retirement of the workmen of the appellant companypany would number govern the 2nd respondent who was employed prior to the companying into force of the standing orders, can be sustained. The view of the High Court that the provision in the standing orders regarding retirement age cannot bind the workmen who were employed in the establishment prior to the companying into force of the standing orders cannot stand in the light of the decisions of this Court in Agra Electric Supply Co. Ltd. v. Shri Alladin and others 2 , Salem Erode Electricity Disribution Company Ltd. v. Salem Erode Electricity Distribution Co. Ltd. Employees Union 3 and the United Provinces Electric Supply Co. Ltd., Allahabad v. T. N. Chatterjee and others 4 1 1960 1 S.C.R. 348. 3 1966 2 S.C.R. 498. 2 1970 1 S.C.R. 308. 4 Civil Appeal No. 1734 of 1967, decided on 13-3-1972 But companynsel for the second respondent companytended that even if the High Court had applied the companyrect law as enunciated by this Court in the above mentioned cases, that would number have enabled the High Court to quash that part of the award which directed the reinstatement of the 2nd respondent, for, it would have been open to the 2nd respondent to support the award on the ground that since the retirement age of all the workmen in the employment of the appellant had been raised to 58 years by the award, the 2nd respondent companyld number have been made to retire by the appellant before he attained the age of 58. In other words, companynsel argued that even if the High Court applied the companyrect law as laid down in the rulings cited above, it companyld number have quashed that part of the award, for, the age of superannuation of all the workmen in the employment of the appellant was raised to 58 by the award and that although the 2nd respondent was number a workman when he was a party to the dispute under s. 18 3 of the Industrial Disputes Act, 1947, hereinafter called the Act. Counsel submitted that the 3rd respondent, the Union, was a party to the dispute which means that all the workmen in the establishment were parties to the dispute as regards the age of retirement, and the award, in so far as it raised the age of retirement to 58, would bind all persons who were employed in the establishment to which the dispute related on the date of the dispute. Section 18 3 of the Act provides 18 3 -A settlement arrived at in the companyrse of companyciliation proceedings under this Act or an arbitration award in a case where a numberification has been issued under sub-section 3A of section 10A of an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on-- a all parties to the industrial dispute b all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper case c where a party referred to in clause a or clause b is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates d where a party referred to in clause a or clause b is companyposed of workman all persons who are 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 per-sons who subsequently become employed in that establishment or part. On the other hand, it was companytended on behalf of the appellant, that the only question referred to the Tribunal so far as the 2nd respondent was companycerned, was whether his superannuation at the age of 55 was justified and the only case put forward by the Union before the Tribunal was whether the provision in the standing orders fixing the age of retirement as 55 would bind We as he was employed before the standing orders came into force in the companycern. And as that was the only question raised and companysidered by the Tribunal and the High Court, it is number open to this Court, in this appeal, to enlarge the scope of the companytroversy and go into, the question whether the 2nd respondent companyld sustain the award on any other ground number decided in his favour by the Tribunal or the High Court. It was further companytended on behalf of the appellant that since numberdate was specified in the award for its companying into operation, it came into operation when it became enforceable as provided in section 17A 1 by virtue of section 17A 4 of the Act and since the 2nd respondent had retired on September 1, 1962, long before the award became operative, even though the award raised the retirement age of all the workmen in the companycern to 58, the 2nd respondent cannot get the benefit of the enhanced age of retirement. In other words, the argument was that the award had numberretrospective operation and since the award companyferred the benefit of the enhanced age of retirement only on the workers in the establishment on the date the award came into operation and since the 2nd respondent was made to retire in accordance with the retirement age as specified in the standing orders of the companypany and had ceased to be a workman on the date when the award became operative, the award did number companyfer upon the 2nd respondent any benefit in respect of his age of retirement. We do number think it necessary to decide the interesting question that in view of the fact that the award became operative only in 1964 whether the 2nd respondent, who was made to retire in 1962 in accordance with the provision in the standing orders then in force, was entitled to get the benefit of the retirement age fixed by the award, on the ground that the award was binding on him and the appellant by Virtue of section 18 3 of the Act. It is clear from the award that the Tribunal did number order the reinstatement of the 2nd respondent on the ground that he was entitled to the benefit of the enhanced retirement age companyferred on all categories of workers in the establishment by the award. The only ground on which the Tribunal ordered the reinstatement was that the 2nd respondent was employed in the companycern prior to the companying into force of the standing orders and, there fore, the provision in the standing orders fixing the age of retirement at 55 was number binding on him in the light of the decision of this Court in Guest Keen Williams Private Ltd. v. P. J. Sterling and others 1 . The 2nd respondent did number support the award in respect of his reinstatement in the companynter-affidavit filed by him in the High Court in answer to the writ petition of the appellant on the ground that he was entitled to the benefit of the retirement age as fixed by the award and, for that reason, the direction for his reinstatement was in any event justified. He will be allowing the 2nd respondent to take a new plea in this Court if we are to say that the order of reinstatement was justified on some ground other than the one on which the award was based.	Case appeal was accepted by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 37 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. S. Arora, for the petitioner. C. Majumdar and G. S. Chatterjee, for the respondent. The Judgment of the Court was delivered by- Khanna, J. This is a petition through jail under article 32 of the Constitution for the issuance of a writ of habeas companypus by Sasti alias Satish Chowdhary, who has been ordered by the District Magistrate Howrah to be detained under section 3 of the Maintenance of Internal Security Act, 1971 hereinafter referred to as the Act . The order recited that it was made with a view to preventing the petitioner from acting in any manner prejudicial to the maintenance of supplies and services essential to the companymunity. The order of detention was passed by the District Magistrate on September 8, 1971. The petitioner, it is stated, was found to be absconding soon after the passing of the order. He was arrested on November 23, 1971 and was served with the order of detention and the grounds of detention together with vernacular translation thereof on the same day. in the meanwhile on September 8, 1971 the District Magistrate sent report to the State Government about his having made the order of detention along with the grounds of detention and other necessary particulars. The matter was then companysidered by the State Government. It approved the detention order on September 10, 1971. The same day the State Government sent report to the Central Government along with necessary particulars regarding the necessity a the order. On December 10, 1971 the State Government received a representation of the petitioner. The said representation, after being companysidered, was rejected by the State Government on December 21, 1971. On December 22, 1971 the. State Government placed the case of the petitioner before the Advisory Board. The representation of the petitioner was also sent to the Advisory Board. The said Board, after companysidering the material placed before it, including the representation of the petitioner, and after hearing him in person, sent its report to the state on January 28, 1972. Opinion was expressed by the Advisory Board that there was sufficient cause for the petitioners detention. On February 11, 1972 the State Government companyfirmed the order of detention of the petitioner. Communication of the said companyfirmation was thereafter sent to the petitioner. In opposition to the petition Shri Dipak Kumar Rudra, Dist-. rict Magistrate, who made the impugned order, has filed his affidavit. Mr. Arora has argued the case amicus curiae on behalf of the petitioner, while the State has been reprensented by Mr.Majumdar, Before dealing with the companytention advanced by Mr. Arora, it would be pertinent to reproduce the portion of the grounds of, detention which companytains the necessary particulars You are being detained in pursuance of detention order made in exercise of the powers companyferred by subsection 1 read with sub-section 2 of section 3 of the Maintenance of Internal Security Act, 1971 Act No. 26 of 1971 , on the grounds that you have beer acting in a manner prejudicial to the maintenance of supplies and services essential to the companymunity as evi-denced by the particulars given below - On 9.7.71 at about 23.30 hrs. you and your associates Sk. Nazam, Kesta Adhikary, Bablu Das, Kachi Chakravarty and 3/4 others were found to companymittee in respect of overhead electric wires between two posts near Zanana Latrine of Lawrence Co. at Chakkashi by the darwans on duty. You and your associate Sk. Nazam were seen on the top of the post cutting one end of the electric wire, while your associates were rolling the cut end of the wire from other post. The darwans raised alarm and surrounded you with the help, of local people. Your associate Sk. Nazam with other escaped and you and two other of your associates companyld be arrested at the spot with stolen companyper wire. This created companyplete dislocation of electric supplies of the area. It is argued by Mr. Arora that as the act attributed to the- petitioner in the grounds of detention companystituted an offence under the Indian Penal Code, the petitioner companyld only be tried in a companyrt of law for the offence and numberorder for his detention On that score companyld be made. This companytention, in our opinion, is devoid of force. It is always open to the detaining authority to pass an order for the detention of a person if the grounds of detention are germane to the object for which a detention order can legally be made. The fact that the particular act of the detenu which provides the reason for the making of the detention order companystitutes an offence under the Indian Penal Code would number prevent the detaining authority from passing the order for detention instead of proceeding against him in a companyrt of law. The detaining authority might well feel that though there was -not sufficient evidence admissible under the Indian Evidenre Act for securing a companyviction, the activities of the person ordered to be detained were of such a nature as to justify the order of detention. There would. be numberlegal bar to the making of detention order in such a case. It would, however, be imperative that the incident which gives rise to the apprehension in the mind of the detaining authority and induces that authority to pass the order for detention should be relevant and germane to, the object for which a detention order can be, made under the Act. Even in cases where a person has been actually prosecuted in a companyrt of law in respect of an incident and has been discharged by the trying magistrate, a valid order of his detention can be passed against him in companynection with that very incident. It was recently observed by this Court in the case of Mohd. Salim Khan v. Shri C. C. Bose Anr. Writ petition No. 435 of 1971 decided on April 25, 1972 that from the mere fact that a detenu was discharged in a criminal case relating to an incident by A magistrate, it companyld number be said that the detention order on the basis of that incident was incompetent, number companyld it be inferred that it was without basis or mala fide. Reliance in this companynection was placed upon the case of Sahib Singh Duggal v. Union India 1 . The particulars of the incident in the grounds of detention show that the petitioner and his associates companymitted theft in respect of overhead electric wires between two posts near Zanana Latrine of Lawrence Co. at Chakkashi. the above act of the petitioner and his associates created companyplete dislocation of electric supplies of the area. The above ground of detention, in our opinion, was germane to the object for which a detention order ,can be made under section 3 1 a iii of the Act. According to that provision, the detaining authority may, if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies and services essential to the companymunity, it is necessary so to do make an order directing that such person be detained. Mr. Arora has referred to the case of Pushkar Mukherjee Ors. v. The State of West Bengal 2 wherein this Court dealt with the difference between the companycept of public order and law and order and observed that the said difference was similar to the distinction between public and private crimes in the realm of jurisprudence. It was observed that a line of demarcation must be drawn between serious and aggravated forms of disorder which directly affect the companymunity any injure the public interest and the relatively minor breaches of peace of a purely local significance which primarily injure specific individuals and only in a secondary sense public interest. 1 1966 1 S.C.R. 313. 2 1969 2 S.C.R. 635. Pushkar Mukherjees case 1 was referred to in a later deci- sion of this Court in the case of Arjun Ghosh v. State of West Bengal 2 and it was pointed out that the true distinction between the areas of law and order and public order was one of degree and extent of the reach of the act in question upon society. Acts similar in nature, but companymitted in different companytexts and cir-cumstances might cause different reactions in one case it might affect the problem of the breach of law and order, and in another the breach of public order. It was observed that the analogy resorted to in the Pushkar Mukherjees case supra of crimes against individuals and crimes against the public though useful to a limited extent would number always be apt.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 85 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. L. Chhibber, for the peitioner. S. Chatterjee, for the respondent. The Judgment of the Court was delivered by Khanna, J. An order was made by the District Magistrate Burdwan on February 10, 1971 under section 3 of the West Bengal Prevention of Violent Activities Act, 1970 Presidents ,Act No- 19 of 1970 for the detention of Abdus Sukkur with a view to preventing- him from acting in any manner prejudicial to the maintenance of public order. In pursuance of that order, Abdus Sukkur was arrested on September 24, 1971. Abdus Sukkur thereupon filed the present petition through jail under article 32 of the Constitution to challenge his detention. Mr. Chibber argued the case amicus curiae on behalf of the petitioner, while the State of West Bengal was represented by Mr. Chatterjee. After hearing the learned companynsel on May 24, 1972 1 ordered that, for reasons to be given later, the petitioner be set at liberty. I number proceed to set out those reasons. The order for the detention of the petitioner, as mentioned earlier, was made by the District Magistrate, on February 10, 1971. The petitioner, it is stated, was found to be absconding after the, making of that order and he was arrested on September 24, 1971. He was then served with the order of detention along with the ground of detention together with vernacular translation thereof. In the meanwhile, on February 10, 1971 the District Magistrate sent report to the State Government about the making of the detention order along with necessary particulars. The State Government approved the detention order on February 18, 1971. The case of the petitioner was placed on October 23, 1971 by the State Government before the Advisory Board. On October 28, 1971 the State Government received a representation from the petitioner against his detention. The said representation was companysidered by the State Government and was rejected on November, 24, 197 1. The representation was, thereafter sent to the Advisory Board. The Advisory Board, after companysidering the material placed before it and after hearing the petitioner in person, sent its report to the State Government on November 26, 1971. Opinion was expressed by the Advisory Board that there was sufficient cause for the detention of the petioner. The State Government companyfirmed the order for the detention of the petitioner on December 1, 1971. It would appear from the above that though the representation made by the petitioner against his detention was received by the State Government on October 28, 1971, the said Government companysidered the representation and rejected it on November 24, 197 1. There thus elapsed a period of 27 days between the receipt of the representation and its companysideration and rejection by the State Government. As the above delay in companysidering and rejecting the representation had number been explained in the affidavit which was initially filed in. opposition to the petition on behalf of the State Government, this Court adjourned the matter on May 5, 1972 to enable the State Government to file an additional affidavit. When the case was taken up thereafter on May 24, 1972 Mr. Chatterjee. 152SupCI/73 learned companynsel for the State, stated that numberadditional affidavit was to be filed on behalf of the State. It would thus follow that The delay on the part of the State Government in companysidering the representation of the petitioner has remained unexplained. This unexplained delay, in my opinion, is sufficient to invalidate the detention of the petitioner. According to clause 5 of article 22 of the Constitution, when any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be companymunicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. The fact that earliest opportunity has to be afforded to the detents for making a representation against the detention order necessarily implies that, as and when the representation is made, it should be dealt with promptly. Undue delay on the part of the detaining authority in disposing of the said representation would run companynter to the underlying object of clause 5 of article 22. The requirement about the giving of earliest opportunity to a detenu to make a representation against the detention order would plainly be reduced to a farce and empty formality if tie authority companycerned after giving such an opportunity pays numberprompt attention to the representation which is submitted by the detenu as a result of that opportunity. It is, therefore, essential that there should be numberundue or unexplained delay on the part of the detaining authority in disposing of the representation made by the detenu against the detention order. In case the authority companycerned is guilty of such delay, the detention would be liable to be assailed on the ground of infraction of article 22 5 of the Constitution. This is as it should be, because the matter relates to the liberty of a subject who has been ordered to be detained without recourse to a regular trial in a companyrt of law. The authority companycerned has, therefore, to proceed strictly in accordance with law and any deviation from companypliance with legal requirement cannot be companyntenanced. It has accordingly been laid down in a string of authorities that undue or unexplained delay in the disposal of the representation of the detenu against the detention order would introduce a serious infirmity in the detention. In the case of Javanaravan Sukul v. State of West Bengal 1 the Constitution Bench of this Court. laid stress on the imperative necessity of- the companysideration of the representation made by a detenu by the Government as early as possible. It was observed It is established beyond any measure of doubt that the appropriate authority is bound to companysider the repre- 1 1970 3 S.C.R. 225. sensation of the detenu as early as- possible. The appropriate. Government itself is bound to companysider the representation as expeditiously as possible., The reason for im- mediate companysideration of the representation is too obvious to be stressed. The personal liberty of a person is at stake. Any delay would number only be an irresponsible act on the part of the appropriate authority but also unconstitutional because the Constitution enshrines the fundamental right of a detenu to have his representation companysidered and it is imperative that when the liberty of a person is in peril immediate action should be taken by the relevant authorities. No definite time can be laid down within which a representation of a detenu should be dealt with save and except that it is a companystitutional right of adetenu to have, his representation companysidered as expeditiously as possible. The detenu in that case made a representation to the State Government on June 23, 1969 and the same was rejected by the State Government on August 9, 1969. It was held that the Government was guilty of the infraction of the companystitutional provision because of inordinate delay in companysidering the representation. The petitioner was accordingly set at liberty. Reliance in the case of Jayanarayan Sukul v. State of West Bengal supra was placed upon an earlier decision of this Court in the, case of Khairul Haque v. State of West Bengal, P. No. 246 of 1969 decided on September 10, 1969 . In that case this Court held that article 22 5 of the Constitution envisaged a dual obligation of the Government and a companyresponding dual right in favour of a detenu, namely, 1 to have his representation independently companysidered by the Government, and 2 to have that representation, in the light of the facts and circumstances of the case, companysidered by an Advisory Board. It was observed that the said provision enjoined upon the detaining authority to afford to the detenu the earliest opportunity to make a representation. This fact, in the opinion of the Court, necessarily implied that such a representation must, when made, be companysidered and disposed of as expeditiously as possible, for otherwise the obligation to furnish the earliest opportunity to make a representation loses both its purpose and meaning. In Prof. K. L. Singh v. State of Manipur 1 this Court held that an unexplained delay of 17 days was enough to render the detention illegal. In Baidya Nath Chunkar v. State of West Bengal W.P. No. 377 of 1971 decided on March 14, 1972 unexplained delay of 29 days in companysidering the representation was, held to have vitiated the detention of the A.I.R. 1972 S.C. 438. detenu. The different cases mentioned above were, referred to by this Court in the case of Kant Lai Bose v. State of West Bengal W.P. No. 8 of 1972 decided on May 5, 1972 and it was held that unexplained delay of 28 days in companysidering the detenus representation would invalidate his detention. I therefore, accept the petition and make the rule absolute.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION C.A. Nos. 2132 and 2133 of 1970. Appeal by certificate from the judgment and order dated June 22, 1965 of the Calcutta High Court in I.T. Reference No. 36 of 1961. Sukumar Mitra J. L. Hathi, T. A. Ramachandran, K. L. Hathi and P. C. Kapur, for the appellant. S. Desai, R. N. Sachthey and B. D. Sharma, for the res- pondent. The Judgment of the Court was delivered by- Grover, J. These appeals have been brought by certificate from a judgment of the Calcutta High Court in two Income tax References. It is most unfortunate that the statement of the case companytains certain omissions and errors and does number appear to have been drafted with the usual care with which such statements are drawn. The assesses Guzdar Kajora Coal Mines Ltd. which was incorporated on July 4, 1945 purchased by a deed of companyvey- ance dated April 3, 1966 executed by the liquidators of Guzdar Kajora Colliery Co. Ltd. all the companyliery lands, hereditaments and premises, mines, minerals, powers and privileges and all ,other hereditaments together with the machinery thereon belonging to the latter companypany. It was stipulated in the deed of ,conveyance that the sale was to be effective from July 1, 1945. The companysideration for the transfer was Rs. 6 lacs and was allocated as follows - a the value of the machinery plants stores including stock of goods grains companyls at the pithead and other movable properties appertaining to the said companyliery the property in which is capable of passing by delivery being Rs. 3,50,000/-. b the value of the buildings and structures be longing to the said companyliery being Rs. 1,50,000/-. c the value of the rest of the properties appertaining, to the said companyliery number capable of being passed by delivery being Rs. 1,00,000/- Soon after the assessee companypany came into existence it took over the business from the vendor companypany and claimed depre- ciation for the assessment year 1946-47 on the basis of, the figures the companyparative statement of which is given in the statement of the case. This statement companytains the written down value as per the assessment record of the vendor companypany the valuation of the assets as per the balance sheet of the vendor companypany and the valuation by the assessee companypany as per balance sheet as on December 30, 1945. The Income tax Officer allowed depreciation on the basis of those figures. This state of affairs companytinued till the assessment year 1952-53 when the Income tax Officer again allowed depreciation on the old basis. Before, the Appellate Assistant Commissioner the assessee raised a ground ,that the Income tax Officer should. have worked ,out the depreciation figures on the basis of balance sheet valuation of the assets as per the audited accounts submitted by the assessee and as claimed in the return. With regard to the assessment year 1953-54 the same position was taken up. The assessee appealed to the Income tax Appellate Tribunal, having failed in its companytentions before the Appellate Assistant Commissioner. It was companytended before the Appellate Tribunal by the assessee that although it had paid a sum of Rs. 6 lacs as companysideration for the transfer of the mines the value taken by the department for the purpose of determining depreciation Was much lower. It was pointed out that the purchase had been made after obtaining, the opinion of an expert and the assessee was being subjected to great hardship depreciation being determined only on the old written down value of the assets and number on the basis of the original companyt of acquisition. The Appellate Tribunal was of the view that substantial injustice would result to the assessee if the depreciation companytinued to be allowed on the old basis if the case of the assessee had any substance. It was felt that a proper investigation as to the value paid by the assessee in taking over the old companypany was necessary. The matter was remanded to the Income-tax Officer to hold an inquiry after giving an opportunity to the assessee to place all the available material in support of its claim. With regard to the assessment year 1953-54 also the case was remanded with similar directions. The Income-tax Officer made a report on July 6, 1960. According to his findings some of the Directors and Shareholders of the two companypanies were the same and they were companynected in many ways. Furthermore the valuation of the depreciable assets and the companysumable stores had been written up whereas the valuation of the number-depreciable assets like mines etc. had been written down. As regards the report of the expert A. N. Mitter dated September 1, 1945 he was unable to companytact him in spite of making an effort to do so. The report made by the second expert S. N. Mullick dated October 19, 1955 and January 30, 1957 together with the clarification made by him on November 20, 1959 were companysidered by him. He also examined 8. N. Mullick under S. 37 of the Indian Income-tax Act, 1922, hereinafter called the Act. He came to the companyclusion that the vendor had been making good profits but numberprovision had been made for the goodwill of the companypany in the business and if such a provision had been made it would have worked out at Rs. 2,56,960/- having regard to the profits made for the preceding four years. He made an allocation of Rs. 6 lacs as follows Good-will Rs. 2,56,960/- Mines and development as per balance-sheet of M s. Guzdar Gajore Colliery Co. Ltd. as at 30-6-45. Rs.2,48,323/- Stores and stock Rs.60,744/- and worked out the value of other depreciable assets at Rs. 33,973/- Before the Appellate Tribunal the remand report of the Income-tax Officer was assailed on behalf of the assessee on various grounds. The Tribunal observed that when the assessments for the years 1946-47 and 1947-48 were made the assessee 13-Ll52SupCI/73 chose to give the valuation in its balance-sheet on a certain basis which was accepted and numberappeal was taken to the higher authorities and although the rule of estoppel companyld number be applied but acquiscence of the assessee shows which way the wind blew. When a settled thing was sought to be reopened the Income-tax Officer had a right to see whether there was any Justification for the radical departure from the settled practice. It was held that the Income-tax Officer was to go behind the valuation. As regards the goodwill the companytention raised on behalf of the assessee was that the same was included in the item of one lakh mentioned in the sale deed. According to the report of Mr. Mullick it was included in the item of Rs. 3,50,006. This is what the Tribunal proceeded to observe It seems to us, the simple truth of the matter is that the figure of Rs. 3,50,000/-, Rs. 1,50,000/- and Rs. 1,00,000/- were arbitrarily put. and there was numberclear cut or understandable break up of valuation ? clause 3 of the break up in the deed of 3rd April 1946, which talks of the value of the rest of the properties appertaining to the said companyliery number capable of being passed by delivery being valued at Rs. 1,00,000/shows that these properties which had I number been in clause 1 and 2 were companyprised in this and it seems too much to say that good-will is included in this. it would be more true to say that good-will was thought of or companyceived of but number provided for in the break up of valuation. The appeals were companysequently dismissed. The, assessee moved the Tribunal for referring certain questions of law to the Tribunal. The following question was framed by the Tribunal and referred to the High Court Whether on the facts and in the circumstances of the case the Income-tax Officer was companypetent to go beyond the companyveyance and fix a valuation of the assets on his own ? The High Court was of the view that the Income-tax Officer was companypetent to make a fresh companyputation as to the value of the assets of the assessee if the facts and circumstances of a particular case justified following such a companyrse. Even on the question of valuation of the good-will it was observed Further, it should be remembered that although the Income-tax Officer has made the valuation of the goodwill by working out the numbermally accepted method of taking the profits of the four preceding years, this method of calculation or this numbermal practice has number been challenged by the assessee. The revenue has. examined all the relevant facts of the case including the reports of Mr. Mitter and Mr. Mullick and the Tribunal has agreed with those findings of facts and we do number think that we can interfere with those findings. The answer to the question referred was given in the affirmative. Learned companynsel for the assessee has assailed the decision of the High Court on a number of grounds. It has been urged inter alia that the High Court had number kept in view the general and well established principle that the statement with regard to valuation companytained in a formal document should be prima facie accepted as companynet. There can be numberjustification, it has been pointed out, for any companyrt or Tribunal to rip up a transaction number impeached as dishonest and number proved to be such, merely because the companypany may have paid an extravagant price for their property. A great deal of emphasis has been laid on behalf of the assessee on the report submitted by the experts justifying the valuation given in the deed of companyveyance. In the absence of fraud, companylusion, inflation or false transaction made with an ulterior purpose the Income tax authorities, it is said, were precluded from going behind the agreement of purchase in determining the purchase price fixing their own valuation. The other point canvassed on behalf of the assessee is that good-will was number included in the valuation given in the deed of companyveyance number was it ever intended that any good-will of the business should be sold by the vendor companypany. This companytention, however, appears to run companynter to What was argued before the High Court and the Tribunal number can it be said to be companyered by the question which was referred. On the case as put before the Appellate Tribunal and the. High Court and the question referred with regard to the two assessment years in question we are unable to see any such error or infirmity that would Justify interference by us in these appeals. It has been strenuously urged on behalf of the assessee that since the decision of the Tribunal or the High Court companyld number operate as res judicata for other assessment years with regard to which assessments are still pending, the assessee would be entitled to raise all the points which are relevant with regard to the question of valuation for the purpose of determining depreciation. We have been pressed to indicate broadly the principles for future guidance as it will be open to the assessee to raise all the points relevant for the purpose of determination of the amount of depreciation allowance in the assessments which are still pending and have number been finally disposed of. Section 10 2 vi of the Act, to the extent it is material is as follows Such profits or gains shall be companyputed after making the following allowances, namely- in respect of depreciation of such buildings machinery, plant or furniture being the property of the assessee, a sum equivalent, where the assets are ships other than ships ordinarily plying on inland waters, to such percentage on the original companyt thereof to the assessce as may in any case or class of cases be prescribed and in any other case, to such percentage on the written down value thereof as may in any case ,or class of cases be prescribed-------------- Provided that-- a b The aggregate of all allowances in res- pect of depreciation made under this clause and clause vi-a or under any Act repealed hereby, or under the Indian Income-tax Act, 1886 II of 1886 , shall, in numbercase exceed the original companyt to the assessee of the buildings, machinery, plant or furniture, as the case may be Keeping in view sub-s. 5 of S. 10 of the Act, the original actual companyt to the assessee of the asset with regard to which depreciation allowance is claimed has to be ascertained for the purpose inter-alia of finding out the written down value in case of assets other than ocean going ships. For the purpose of getting the benefit of clause c of the proviso to sub-section 2 vi also the original companyt has also to be ascertained. The Privy Council laid down in Commissioner of Income tax, Madras v. The Buckingham and Carnatic Co., Ltd. Madras 1 , that the word assessee in s. 10 2 vi of the Act refers to the person who owns the assets and who is being assessed and depreciation allowance has to be based on the original companyt of such property to such person. This principle was laid down in a case where the assessee had acquired the business of another assessee and it was emphasised that the original companyt to be companysi- dered was the original companyt to the person who was being actually assessed and number the original companyt of those assets to the previous 1 1935 I.T.R. 33 owner of the business. Reference was made to the above decision of the Privy Council in the judgment of this Court in Jogta Coal Co. Ltd. v. Commissioner of Income tax West Bengal 1 and it was observed We do number think that there is any doubt on the wording of the section or on the interpretation that has been put upon those words that the companyt to be calculated for the purpose of depreciation allowance is the companyt to the assessee and number to the person who makes the sale Now the original companyt of a particular asset is a question of fact which has to be determined on the evidence or the material produced before or available to the Income tax authorities. Any document or formal deed mentioning the companysideration or the companyt paid for the purchase of an asset by an assessee would be a piece if evidence and prima facie the statements or figures given therein would show how much the companyt of the asset to the assessee is. But if circumstances exist showing that a fictitious price has been put on the asset or there is fraud or companylusion between the vendor and the vendee and there has been inflation or deflation-of-value for ulterior purposes it is open to the Income tax authorities to refuse to accept the price mentioned in the deed or alleged by the assessee and to ascertain what the actual companyt was See Pindi Kashmir Transport Co. Ltd. v. Commissioner of Income-tax Lahore 2 and Kalooram Govindram v. Commissioner of Income tax Madhya Pradesh, Nagpur and Bhandara 3 . In this view of the matter it is open to the Income tax authorities to determine and to the assessee to show. whether the good-will of the business is or is number included in the companysideration or the price paid for the acquisition of the asset. In other words even if it is number expressly mentioned that goodwill has been sold it can be shown and ascertained by evidence whether the same has been purchased or number by the assessee. The expression good-will has been companysidered and explained by this Court in S. C. Cambatta Co. P. Ltd. v. Commissioner Excess Profits Tax, Bombay 4 and numberhing more need be said about it. The principles stated by us are by numbermeans exhaustive and are mainly illustrative. Keeping in view the facts of the present case we may make it clear that if circumstances exist for going behind the valuation as also the allocation given in the deed of companyveyance it was and is open to the Income tax authorities to determine the valuation as well as the allocation between depreciable and number-depreciable assets. 1 36 I.T.R. 521 2 26 I.T.R. 595 3 57 I.T.R. 335 4 41 I.T.R. 500 The present appeals, however, must fail for the reasons stated earlier and are hereby dismissed. We make numberorder as to companyts in this Court.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 273 of 1968. Appeal by special leave from the judgment and order dated December 15, 1967 of the Allahabad High Court in Criminal Appeal No. 478 of 1965. B. Datar, for the appellants P. Rana, for the respondent. The Judgment of the Court was delivered by-- Khanna, J. Shri Kishun, Ram Bali, Jai Shri and Jattan were companyvicted by learned Sessions Judge Ballia under section 302 read with section 34 Indian Penal Code for causing the death of Seru aged 45 and under section 323 read with section 34 Indian Penal Code for causing injuries to Sadaphal PW 2 , and were sentenced to undergo imprisonment for life on the former companynt and rigorous imprisonment for a period of one year on the latter companynt. The sentences in the case of each accused were ordered to run companycurrently. On appeal the High Court of Allahabad affirmed the order of the trial companyrt. The four accused thereafter came to this Court by special leave. The leave was, however, limited to the question whether the offence disclosed was murder or culpable homicide number amounting to murder or some lesser offence. Ram Bali and Jattan accused are brothers. Likewise, Shri Kishun and Jai Shri accused are brothers and are the nephew of Ram Bali and Jattan. The prosecution case is that on February 13, 1964 about half an hour before sunset Bhagwati PW 3 , who is aged about 11, and his sisters son Kolahal were playing guchhi a game played with paisa in the Khalihan of Shri Kishun accused. Nandlal, son of Shri Kishun, came there and protested against the playing, of the game of guchhi in his Khalihan, Nandlal also threw away in a neighboring field the paisa with which the game was being played. A scuffle then took place between Nandlal and Bhagwati. Seru deceased and Sadaphal PW on companying to know of the aforesaid scuffle went to Shri Kishuns Khalihan and stopped the scuffle. Nandlal then began to weep and went to his house. Seru, Sadaphal, Bhagwati and Kolahal made a search for the paisa which had been thrown away by Nandlal but companyld number find it. They then left for their houses. When they reached in front of the house of one Suraj Mal, the four accused, who were armed with lathes, accosted them. The accused protested against the beating given to Shri Kishuns son Nandlal and at the same time, belaboured Seru and Sadaphal. Seru on receipt of injuries fell down on the ground and became unconscious. On alarm being raised, Sada Shiva PW 4 and Bajaram PW 5 reached there, whereupon the accused run away. Sadaphal PW carried Seru on a company to police station Deoria. On the way Seru was put in a riksha. The party then went to police station Beoria where first information report was lodged by Sadaphal PW at 7.05 p.m. the same evening. Seru and Sadaphal were then directed to go to the hospital for medical examination. Seru, however, died on the way. Post mortem examination on the dead body of Seru was performed by Dr. C. D. Agarwal on February 14, 1964. The following five injuries were found on the body of Seru Contused wound 1X-1/2 bone on top of head with swelling on the forehead. Contused wound I X 1/2 bone, front of right leg middle. Interrupted abraison 2 X 3/4 front of right leg. Ecchymosis on right upper and lower eye lid 1/2 x 3/4. Swelling on left temporal region 2-1/2 X 2. Death was due to shock and haemorrhage as a result of the head injury. Sadaphal PW on examination by Dr. Nagrath was found to have seven simple injuries caused with blunt weapon like lathi. At the trial the plea of the appellants was that a she buffalo belonging to Seru had trespassed into the field of Shri Kishun accused. Jattan accused caught hold of the she buffalo and was taking it to the cattle pond when Seru and Sadaphal made an effort to snatch The she buffalo. They also assaulted Jattan with latbis. On alarm having been raised by Jattan, Jai Shri reached there and both of them used their lathis in self-defence. Evidence was led in defence to show that Jattan accused on being examined on February 18, 1964 was found to have two injuries on his person. The High Court in maintaining the companyviction of the accused appellants relied upon the evidence of four eye witnesses, Sadaphal PW 2 , Bhagwati PW 3 , Sada Shiva PW 4 and Rajaram PW 5 . It was also observed by the High Court that the prosecution evidence did number indicate as to which of the accused appellants had given the fatal blow to Seru. Although the High Court took numbere of the fact that there did number exist any previous enmity between the accused on the one hand and Seru deceased on the other, the argument that the accused were number guilty of the offence under section 302 read with section 34 Indian Penal Code did number find favour with the High Court. In the result, the appeal was dismissed. In this Court Mr. Datar on behalf of the accused-appellants has argued that the case against the accused falls under section 325 read with section 34 Indian Penal Code and number under section 302 read with section 34 Indian Penal Code. As against that Mr. Rana has supported the judgment of the High Court. In our opinion, the submission made by Mr. Datar is well-founded. There was numberprevious enmity between the accused-appellants on the one hand and Seru deceased and Sadaphal PW on he other. The occurrence was the off-shoot of a rifling incident in the nature of a scuffle between two urchins. Nandlal, it appears then went weeping and told his father that he had been beaten by Seru and Sadaphal. The four accused thereupon protested to Seru and Sadaphal for the beating given to Nandlal and also belaboured them with lathis. Five injuries were caused to Seru. Apart from the one injury on the head, which proved fatal, the other injuries were number of a very serious nature. Sadaphal had seven injuries all of which were simple in nature. The prosecution evidence, as observed by the High Court, does number indicate as to which one of the accused-appellants inflicted the fatal blow on. the head of Seru. As such, numbere of the accused can be held to be personally liable for the fatal injury. The liability can only be vicarious under section 34 of the Indian Penal Code and, as such, we have to find out as to what was the companymon intention of the accused in furtherance, of which they caused injuries to Seru and Sadaphal. In this companytext we find that the High Court has arrived at the following finding There companyld, therefore, be numberdoubt that the companymon intention of the appellants was to give a severe beating to Seru and Sadaphal. The above finding as well as the broad circumstances of the case go to show that the companymon intention of the accused was to cause grievous injury to the victim. The fact that one of them exceeded the bound and gave a fatal blow on the head of the deceased would make him personally liable for the fatal injury, but so far as the other three are companycerned, they can be held liable only for the injuries which were caused in furtherance of the companymon intention and number for the fatal injury. As it is number possible on the material on record to find out as to which one of the accused gave the fatal blow, there is numberescape from the companyclusion that each one of the four accused can only be guilty of the offence under section 325 read with section 34 Indian Penal Code. We accordingly alter the companyviction of each of the accused-appellants from under section 302 read with section 34 Indian Penal Code to that under s. 325 read with s. 34 Indian Penal Code. Each of them is sentenced to undergo rigorous imprisonment for a period of five years on that companynt. The sentence of rigorous imprisonment for a period of one year awarded to each of the accused under section 323 read with section 34 Indian Penal Code would run companycurrently with the above sentence.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 665 N of 1972. Appeal by special leave from the judgment and order dated August 27, 1971 of the High Court of Judicature at Allahabad in Civil Revision No. 680 of 1970. M. Tarkunde and Hardev Singh, for the appellant. Respondent appeared in person. The Judgment of the Court was delivered by Mathew, J. This appeal, by special leave, is from the order of the High Court of Allahabad allowing on application for revision of orders passed by the Civil Judge, Saharanpur, directing discovery of documents by the respondent and dismissing an application by him for permission to sue forma pauperis. The respondent filed a suit in forma pauperis on April 29, 1962, against the appellant and his wife for recovery of damages to the tune of Rs. 7,48,000/- for malicious prosecution. Notice of the petition. to sue in forma pauperis was given to the State Government and the appellant under Order 33, Rule 6 of the Civil Procedure Code. Both the Government and the appellant filed objections stating that the respondent is number a pauper. The appellant thereafter filed an application for discovery of documents from the respondent for proving that the respondent is number a. pauper. The Court passed an order on February 23, 1970, directing the respondent to discover on affidavit the documents relating to the bank accounts of the respondent, namely, pass books cheque books, companynterfoils, etc., from March 1, 1963, to the date of filing the affidavit of discovery, as also the documents in respect of the properties held by him and the personal accounts maintained by him. The respondent was to file the affidavit of discovery on March 8, 1970. It was specifically stated that numberextension of time will be allowed for filing the affidavit and that the discovery should be made within the time. The respondent did number file the affidavit in pursuance to the order. On March 31, 1970, he moved an application stating. that he, wants to file a revision against the order dated February 23, 1970, before the High Court and that two months time may be allowed for the purpose. The Court rejected the application for time on April 4, 1970, on the ground that the application for permission to sue in forma pauperis was pending for the last seven years and that the respondent had ample time for filing the revision if he was diligent in the matter. The respondents companynsel then moved another application on the same day stating that the respondent wants to adduce evidence and that since he had number companye to Court in the expectation that his earlier application dated March 31, 1970, for adjournment would be allowed, the case may be adjourned. This application was also rejected by the Court. And as companynsel for the respondent reported numberinstruction and as there was numberevidence to show that the respondent was a pauper, the Court dismissed the application for permission to sue in forma Pauperis and directed the respondent to pay the companyrt fee within 15 days. The respondent challenged the order directing discovery of documents passed on February 23, 1970, and that dismissing his application for permission to sue in forma pauperis passed on April 4, 1970, in revision before the High Court. The High Court hold that since the proceedings under rules 6 and 7 of Order 33 are summary in character, the sophisticated procedure for discovery should number have been resorted to by the appellant, that the documents of which discovery was sought were number specified in the application of the appellant and, therefore, the application for discovery was bad, that the enquiry under rules 6 and 7 of Order 33 was primarily a matter between respondent and the State Government and that the trial companyrt should number have adopted the procedure for discovery and inspection at the instance of a private party like the appellant. The Court further held that the trial Court acted with material irre- gularity as it did number companysider the question of the necessity for discovery of the documents or the relevancy of the documents of which discovery was sought and also for the reason that, in ordering discovery of the documents relating to personal accounts, and pass books, it overlooked the right of the respondent to claim privilege. And as regards the order passed on April 4, 1970, dismissing the application for permission to sue in forma pauperis after rejecting the application for adjournment, the Court said that the trial Court betrayed an anxiety to get rid of an application to add to the figures of its disposal. The Court, therefore, set aside the order for discovery as well as the order dismissing the application for permission to sue in forma pauperis. The respondent submitted that the procedure for discovery of documents is number permissible in proceedings under Order 33 and that it is number salutary to adopt the procedure even if permissible. In Vijay Pratap Singh v. Dukh Haran Nath Singh and another 1 , this Court has held that the suit companymences from the moment an application for permission to sue in forma pauperis as required by Order 33 is presented. If that be so, the provisions of rule 12 of Order 11 relating to discovery would in terms apply to proceedings under Order There is also numberreason why, if the provisions of Order 1, rule 10 relating to additions of parties, of Order 9 dealing with appearance of parties and companysequence of number- appearance, and of Order 39 relating to temporary injunctions would apply to proceeding under Order 33, the provisions in Order 11 dealing with dis- companyery of documents should number apply to, such proceedings. In England, discovery is ordered in any pause or matter in the Supreme Court to which the rules of the Supreme Court apply. And cause includes any action, suit or other original proceeding between a plaintiff and defendant. Generally speaking, discovery is granted there in all proceedings except purely criminal proceedings, and civil proceedings where the action is brought merely to establish a forfeiture or enforce a penalty 1 . There is numberreason to hold, if companyts companyld be saved, that it is number salutary to resort to the procedure in proceedings under Order 33. We think that the High Court was wrong in holding that since the application for discovery did number specify the documents sought to be discovered, the lower Court acted illegally in the exercise of its jurisdiction in ordering discovery. Generally speaking, a party is entitled to inspection of all documents which do number themselves companystitute exclusively the other partys evidence of his case or title. If a party wants inspection of documents in the possession of the opposite party, he cannot inspect them unless the other party produces them. The party wanting inspection must, therefore, call upon the opposite party to produce the document. And how can a party do this unless he knows what documents are in the possession or power of the opposite party ? In other words, unless the party seeking discovery knows what are the documents in the possession or custody of the opposite party which would throw light upon the question in companytroversy, how is it possible for him to ask for dis- companyery of specific documents ? Order 1 1, rule 12 provides 1 1962 S.C.R. Supp. 2,675. Halsburys Laws of England, Vol. 12, P. 2. Any party may, without filing any affidavit, apply to the Court for an order directing any other party to any suit to make discovery on oath of the documents which are or have been in his possession or power, relating to any matter in question therein. On the hearing of such application the Court may either refuse or adjourn the same, if satisfied that such discovery is number necessary or number necessary at that stage of the suit, or make such order, either generally or limited to certain classes of documents, as may, in its discretion, be thought fit Provided that discovery shall number be ordered when and so far as the Court shall be of opinion that it is number necessary either for disposing fairly of the suit or for saving companyts. When the Court makes an order for discovery under the rule, the opposite party is bound to make an affidavit of documents and if he fails to do so, he will be subject to the penalties specified in rule 21 of Order 1 1. An affidavit of documents shall set forth all the documents which are, or have been in his possession or power relating to the matter in question in the proceedings. And as to the documents which are number, but have been in his possession or power, he must state what has become of them and in whose possession they are, in order that the opposite party may be enabled to get production from the persons who have posses- sion of them see form No. 5 in Appendix C of the Civil Pro- cedure Code . After he has disclosed the documents by the affidavit, he may be required to produce for inspection such of the documents as he is in possession of and as are relevant. The High Court was equally wrong in thinking lb-at in pass- ing the order for discovery, the trial Court acted illegally in the exercise of its jurisdiction as it deprived the respondent of his right to claim privilege for number- production of his pass book and personal accounts, because the stage for claiming privilege had number yet been reached. That would be reached only when the affidavit of discovery is made. Order 11, rule 13 provides that every affidavit of documents should specify which of the documents therein set forth the party objects to produce for inspection of the opposite party together with the grounds of objection Nor do we think that the High Court was right in holding that the documents ordered to be discovered were number relevant to the injuiry. The documents sought to be discovered need number be admissible in evidence in the enquiry or proceedings. It is sufficient it the documents would be relevant for the purpose of throwing light on the matter in companytroversy. Every document which will throw any light on the case is a document relating to a matter in dispute in the proceedings, though it might number be admissible in evidence. In other words, a document might be inadmissible in evidence yet it may companytain information which may either directly or indirectly enable the party seeking discovery either to advance his case or damage the adversarys case or which may lead to a trail of enquiry which m have either of these two companysequences. The word document may this companytext includes anything that is written or printed, numbermatter what the material may be upon which the writing or printing is inserted or imprinted. We think that the documents of which the discovery was sought, would throw light on the means of the respondent to pay companyrt fee and hence relevant. We venture to think that the High Court was laboring under a mistake when it said that the enquiry into the question whether the respondent was a pauper was exclusively a matter between him and the State Government and that the appellant was number interested in establishing that the respondent was number a pauper. Order 33, rule 6 provides that if the Court does number reject the application under rule 5, the Court shall fix a day of which at least 10 days numberice shall be given to the opposite party and the Government pleader for receiving such evidence as the applicant may adduce in proof of pauperism and for hearing any evidence in disproof thereof. Under Order 33, rule 9, it is open to the Court on the application of the defendant to dispauper the plain-. tiff on the grounds, specified therein, one of them being that his means are such that he ought number to companytinue to sue as a pauper. An immunity from a litigation unless. the requisite companyrt fee is paid by the plaintiff is a valuable right for the defendant. And does it number follow as a companyollary that the proceedings to establish that the applicant-plaintiff is a pauper, which win take away that immunity, is a proceeding in which the defendant is vitally interested ? To what purpose does Order 33, Rule 6 companyfer the right on the opposite party to participate in the enquiry into the pauperism and adduce evidence to establish that the applicant is number a pauper unless the opposite party is interested in the question and entitled to avail himself of all the numbermal procedure to establish it ? We can think of numberreason why if the procedure for discovery is applicable to proceeding under Order 33, the appellant should number be entitled to avail himself of it. We also do number think that there is any point in the criticism of the High Court that the order for discovery was vague. The first item in the order was in respect of the documents relating to the bank accounts of the respondent from March 1, 1963, to the date of the affidavit. The second item related to documents in respect of the immovable properties held by him during the same period and the third item was in respect of documents relating to the personal accounts maintained by him for the same period. The order was as specific as it companyld be. Counsel for the appellant companytended that even if the order for discovery of documents was bad in law, the High Court was number justified in interfering with it. And as regards the order dated April 4, 1970, dismissing the application for permission to sue in forma pauperis after rejecting the application for time, be said, the High Court was really interfering with the discretion of the trial Court in the matter of adjournment, The jurisdiction of the High Court under section 115 of the C.P.C. is a limited one. As long ago as 1884, in Rajah Amir Hassan Khan v. Sheo Baksh Singh 1 , the Privy Council made the following observation on s. 622 of the former Code of Civil Procedure, which was replaced by s. 115 of the Code of 1908 The question then is, did the judges of the lower Courts in this case, in the exercise of their jurisdiction, act illegally or with material irregularity. It appears that they had perfect jurisdiction to decide the question which was before them, and they did decide it. Whether they decided rightly or wrongly, they had jurisdiction to decide the case and even if they decided wrongly, they did number exercise their jurisdiction illegally or with material irregularity. In Balakrishna Udayar v. Vasudeva Aiyar 2 , the Board observed It will be observed that the section applies to jurisdiction alone, the irregular exercise or number-exercise of it, or the illegal assumption of it. The section is number directed against companyclusions of law or fact in which the question of jurisdiction is number involved. In N. S. Venkatagiri Ayyangar v. Hindu Religious Endowments Board, Madras 1 , the Judicial Committee said that section 115 empowers the High Court to satisfy itself on three matters, a that the order of the subordinate companyrt is within its jurisdiction b that the case is one in which the Court ought to exercise jurisdiction and c that in exercising jurisdiction the Court has number acted illegally, that is, in breach of some provision of law, or with material irregularity, that is, by companymitting some error of procedure in the companyrse of the trial which is material in that it may have affected he ultimate decision. And if the High Court is satisfied on those three matters, it. has numberpower to interfere because it differs from the companyclusions of the subordinate companyrt on questions of fact or law. 1 1884 L. R. 11 1. A. 237. 2 1917 L. R. 44 1. A. 261, 267. 3 1948-49 L. R. 76, 1. A. 67. This Court in Manindra Land and Building Corporation Ltd. Bhutnath Banerjee and others 1 and Vora Abbashhai Ali- 2 mahomed v. Haji Gulamnabi Haji Safibhai has held that a distinction must be drawn between the errors companymitted by sub-ordinate companyrts in deciding questions of law which have relation to, or are companycerned with, questions of jurisdiction of the said Court, and errors of law which have numbersuch relation or companynection. In Pandurang Dhoni Chougute v. Maruti Hari Jadhav 3 , this Court said The provisions of s. 115 of the Code have been examined by judicial decisions on several occasions. While ex ercising its jurisdiction under S. 115, it is number companypetent to the High Court to companyrect errors of fact however gross they may be, or even errors of law, unless the said errors have relation to the jurisdiction of the Court to try the dispute itself. As clauses a , b and c of s. 15 indicate, it is only in cases where the subordinate Court has exercised a jurisdiction number vested in it by law, or has failed, to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity that the revisional jurisdiction of the High Court can be properly invoked. It is companyceivable that points of law may arise in proceedings instituted before subordinate companyrts which are related to questions of jurisdiction. It is well settled that a plea of limitation or a plea of rasjudica is a plea of law which companycerns the jurisdiction of the Court which tries the proceedings. A finding on these pleas in favour of the party raising them would oust the jurisdiction of the companyrt and so, an erroneous decision on these pleas can be said to be companycerned with questions of jurisdiction which fall within the purview of s. 115 of the Code. But an erroneous decision on a question of law reached by the subordinate companyrt which has numberrelation to questions of jurisdiction of that companyrt cannot be companyrected by the High Court under s. 115. The jurisdiction is a verbal companyt of many companyours Jurisdiction originally seems to have had the meaning which Lord Reid ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission 4 , namely, the entitlement to enter upon the enquiry in question. If there was an entitlement to enter upon an enquiry into the question, ben any subsequent error companyld only be regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Denean in R. v. A.I.R. 1964 S.C. 1336. A.I.R. 1964 S.C. 1341. 3 1956 1 S.C.R. 102. 4 1969 2 A.C. 147. Bolton 1 . He said that the question of jurisdiction is determinable at the companymencement, number at the companyclusion of the enquiry. In Anisminic Ltd. 2 , Lord Reid said But there are many cases where, although the tribunal had jurisdiction to enter on the enquiry it has done or failed to do something in the companyrse of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had numberpower to make. It may have failed in the companyrse of the enquiry to companyply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was number remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had numberright to take into account. I do number intend this list to be exhaustive. In the same case, Lord Pearce said Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or. things which are companyditions precedent to the tribunal having any jurisdiction to embark on an,enquiry. Or the tribunal may at the end make an order that it has numberjurisdiction to make. Or, in the intervening stage while engaged on a proper enquiry, the tribunal may depart from the rules of natural justice or it may ask itself the wrong questions or it may take into account matters which it was number directed to take into account.Thereby it would step outside its jurisdiction. It would turn its inquiry into something number directed by Parliament and fail to make the inquiry which the Parliament did direct. Any of these things would cause its purported decision to be a nullity. The dicta of the majority of the House of Lords in the above case would show the extent to which lack and excess of jurisdiction have been assimilated or, in other words, the extent to which we have moved away from the traditional companycept of jurisdiction. The effect of the dicta in that case is to reduce the difference between jurisdictional error and error of law within jurisdiction almost to vanishing point. The practical effect of the decision is that any error of law can be reckoned as jurisdictional. This 1 1841 1 Q. B. 66. 2 1969 2A. C. 147. companyes perilously close to saying that there is jurisdiction it the decision is right in law but numbere if it is wrong. Almost any misconstruction of a statute can be represented as basing their decision on a matter with which they have numberright to deal, imposing an unwarranted companydition or addressing themselves to a wrong question. The majority opinion in the, case leaves a Court or Tribunal with virtually numbermargin of legal error. Whether there is excess of jurisdiction or merely error within jurisdiction can be determined only by companystruing the empowering statute, which will, give little guidance. It is really a question of how much latitude the Court is prepared to allow. in the end it can only be a value judgment see H.W.R. Wade, Constitutional and Administrative Aspects of the Anismanic case, Law Quarterly Review, Vol. 85, 1969, p. 198 . Why is it that a wrong decision on a question of limitation or res judicata was treated as a jurisdictional error and liable to be interfered with in revision ? It is a it difficult to understand how an erroneous decision on a question of limitation or res judicata would oust the jurisdiction of the Court in the primitive sense of the term and render the decision or a decree embodying the decision a nullity liable to companylateral attack. The reason can only be that the error of law was companysidered as vital by the Court. And there is numberyardstick to determine the magnitude of the error other than the opinion of the Court. The trial Court had jurisdiction to pass the order for discovery. Even if lack of jurisdiction is assumed to result from every material error of law--even an error of law within the jurisdiction in the primitive sense of the term-we do number think the order was vitiated by any error of law. The rejection of the application for time and the companysequent dismissal of the petition for permission to sue in forma pauperis can hardly be said to sound in jurisdic- tional error even in its extended sense, as already explained. We are also number satisfied that the refusal to adjourn occasioned any failure of natural justice so as to render the order a nullity. Nor is there anything to show that in rejecting the application for time the Court acted illegally or with material irregularity in the exercise of its jurisdiction. We would, therefore, set aside the order of the High Court and allow the appeal but in the circumstances make numberorder as to companyts. This order will number in any way affect the validity of the order passed by the High Court on August 26, 1971, directing the respondent to delete the name of the wife of the appellant from the array of parties.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION C.A. Nos. 323-332, 1312 1174 of 1969. Appeals by certificate from the judgment and a decree dated September 27, 1968 of the Andhra Pradesh High Court of Judicature at Hyderabad in Writ Petitions Nos. 2956, 1798, 1931, 2313, 3372, 3740, 3964, 3956 and 4088 of 1968 and Civil Appeal No. 1518 of 1970. On appeal by certificate from the judgment and order dated March 31, 1970, of the Andhra Pradesh High Court in Writ Petition No. 3501 of 1968 and Appeal by certificate against the judgment and order dated August 25, 1970 of the Andhra Pradesh High Court of Judicature at Hyderabad in Writ Petition No. 4034 of 1970. V. Subramanyam and G. Narayana Rao for the appellants in CA Nos. 323/69 and 1312/69 . Narayana Rao, for the appellants in all the appeals . Basi Reddy and B. Parthasarathy, for the respondents in C. As Nos. 323, 332, 1312, 1174/69. Basi Reddy and A. V. V. Nair, for the respondent, In A. No. 1518/70 . Basi Reddy and P. Parameshwara Rao, for the respondent In C.A. Nos. 2117/70 . The Judgment of the Court was delivered Beg, J. In these appeals by Certificate only one question of law has been argued. It may be formulated as follows Is any part of the provision of Item 6 of Schedule III of the Andhra Pradesh General Sales Tax Act 6 of 1957 hereinafter referred to as the Act relating to the point of levy void for companytravening Section 15 a of the Central Sales Tax Act, 1956 ? Each of the appellants before us is a miller and one of a large number of such millers who had applied to the High Court of Andhra Pradesh, under Article 226 of the Constitution, for a Writ of Prohibition against proceedings for assessment of Sales-Tax taken on the strength of an allegedly void provision of law. The validity of item 6 of Schedule III of the Act was challenged on a number of grounds in the High Court which need number be mentioned here as the only ground which has been argued before us is companyered by the question formulated above. It may be mentioned that numbere of the appellants set out facts showing the nature of the demand in the proceedings under the Act aganist them, or, the extent, if any, to which each petitioner, who is a miller, registered also as a dealer under the Act as well as under the Central Act, sells groundnuts, or, whether groundnuts were purchased specifically only for purposes of crushing them and companyverting them into oil or into any other product or for the purpose of sale as well. They have merely questioned the validity of item 6 of Schedule III of the Act by reason of alleged companyflict with Section 15 of the Central Act so that all we need do is to set out the two provisions and give our reasons for our companyclusions. We have already dismissed the appeals after hearing them. We number proceed to record our reasons. Item 6 of Schedule III reads as follows Description of goods-- Point of levy Rate of tax Groundnuts 3 naya paise in the rupee When purchased by a miller other than a decorticating miller in the State at the point of purchase by such miller, and, in all other cases at the point of purchase by the last. dealer who buys in the State. Groundnuts have been declared as goods of special importance in inter-state trade or companymerce under Section 14 of the Central Act. Section 15 of the Central Act lays down Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and companyditions, namely a the tax payable under that law in respect of any sale or purchase of such goods inside the State shall number exceed three per cent of the sale or purchase Price thereof, and such tax shall number be levied at more than one stage b where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the companyrse of inter-State trade or companymerce, the tax so levied shall be refunded to such person in such manner and subject to such companyditions as may be provided in any law in force in that State. It may be mentioned that, in so far as the rate of tax specified in item 6, Schedule III of the Act is companycerned, the Andhra Pradesh High Court had itself given some relief to the appellants, on the ground that the definition of turn-over under the Act companyld include what is more than the sale price as defined by the Central Act, so that the rate may exceed the limit imposed by Section 15 a of the Central Act. We are, therefore, numberlonger companycerned with the question of rate but only with that part of item 6, Schedule III, which makes millers other than decorticating millers liable to pay the tax when they purchase groundnuts. It is companytended that the groundnuts purchased by the appel- lants would be taxed at the point of purchase by them and also again in the hands of last dealers to whom they may sell. The short answer to this argument companyld be that the validity of the levy of a tax upon a purchase by a last dealer companyld be questioned by one of the appellants only if he was being taxed as a last dealer and number as a miller. It is apparent that they are, being taxed at the point of purchase by them as millers only. When they purchase groundnuts as millers they do so presumably in order to companyvert the groundnuts into another product altogether, and, they would, therefore, presumably be last purchasers of ground-nuts as groundnuts. They may be selling their products in forms other than groundnuts. The appellants are, however, number questioning the validity of a tax upon any sales of these other products. They are questioning the validity of the tax on ground-nuts purchased by them. They submit that only one point of taxation can be provided for these sales by a State law. We will, therefore, companysider this ground. It is clear to us that, in such cases, the liability to pay tax, which is a tax on purchase, falls only at one point. In fact, the question raised before us seems to us to be companyered by a decision of this Court on item 6 of Schedule III in Sri Venkateswara Rice, Ginning Groundnut Oil Mill Contractors Co. etc. v. The, State of A. P. Ors. 1 where this Court said at page 5 3 None of the assessees before us is a decorticating miller. Hence we have to see whether the purchases of groundnut made by, them did number become taxable as soon as they made those purchases. it is number well settled that even under the Sales Tax laws, the charge in respect of a sale or purchase becomes effective as soon as the sale in the case of purchase tax is made, though the liability of the dealer can be companyputed only at the end of the year. The incurring of the charge is one thing and its companyputation is a totally different A.I.R. 1972 S.C.51. thing Hence the turnover relating to the purchases with which we are companycerned in these appeals became charged with the liability to pay tax as soon as those purchases were made by the assessee-millers. To restate the position, whenever a miller purchases ground- nut, the turnover relating to that purchase becomes exgible to tax subject to such exemptions as may be given under the Act. This means that as soon as a first miller purchases groundnut, the turnover relating to that purchase, the question of exemption apart, becomes liable to tax. This is also the view taken by the High Court. It may be mentioned here that, in the above mentioned case, the assessee had already been taxed and one of the arguments advanced there was that the part of the taxed turnover which was sold by the assessee miller to other millers should be excluded because it was number dealt with by him as a miller but as a dealer who was number the last purchaser. The Court said The next argument advanced on behalf of the assessees is that in the case of some of the assessees a part of the groundnut purchased had, been sold to other millers hence in those cases, the assessees must be taxed only in respect of that part of the turnover which relates to groundnut which they had crushed for extracting oil and in the case of remaining part, it is the last dealer who purchased the same should be taxed. This companytention again is unacceptable. As mentioned earlier the event which attracted tax is the act of the miller purchasing groundnut and number his act of crushing the groundnut purchased or dealing with that groundnut in any other manner. We have earlier mentioned that very act of purchase by a miller attracts the liability to pay tax under Section 5 read with Schedule 3 item 6. His subsequent dealings in those goods become irrelevant. In numbere of the cases before us it was shown that any of. the assessees had pur- chased groundnut with a view to sell them. Hence we need number go into the question as to what would be the position in law where a miller purchases some ground-nut for milling and the rest for sale. In the cases before us also we need number companysider the position of a miller who purchases some groundnuts for milling and the rest for sale. It is clear that each of the appellants becomes liable to the payment of tax as a purchasing miller just as a last dealer would be liable on the purchases made by him. Hence, the last dealer and the miller, who purchases presumably to companyvert the groundnuts into other products, are placed on an equal footing. We were number satisfied that there is a possibility of double taxation or of taxation of the same product at more than one point of purchase.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 39 of 1972. Petition under Article 32 of the Constitution of India for the enforcement of fundamental rights. Lakshminarasu, for the petitioner. L. Mukhoty and Sukumar Basu, for the respondent. The Judgment of the Court was delivered by Shelat, J. The District Magistrate, Burdwan, passed the order impugned in this petition on July 14, 1971 directing the petitioners detention under sub-sec. 1 read with sub-sec. 3 of sec. 3 of the West Bengal Prevention of Violent Activities Act, being Presidents Act XIX of 1970, on the ground that such detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. In pursuance of the order the petitioner was arrested on August 6, 1971 when he was furnished, as required by the Act. the grounds of detention. There is numberdispute that companysequent upon the passing of the said order the Government of West Bengal and the other relevant authorities under the Act duly took all companysequential steps, such as the reporting to and obtaining the Governments order of approval, reporting to the Central Government, disposal of the petitioners representation, referring the petitioners case to the Advisory Board and obtaining its opinion etc., within the respective times prescribed by the Act. Two grounds questioning the, validity of the said order and the detention thereunder were, however, urged by Mr. Lakshminarasu, appearing for the petitioner amicus curiae. The first was that the first ground in the grounds of detention was irrelevant and therefore vitiated the entire order. The second was that there was undue delay in the companyfirmation by the State Government of the detention order and the companytinuance of detention thereunder after the expiry of three months of detention. The first ground in the grounds of detention runs as follows That on 7-2-71 at 13-30 hours you and your associates had been to the house of Shri Bibhuti Bhusan Ghosh of Ranchi Dhowrah, Police Station Kulti, and asked him to rub out the anti-naxalite slogans written on the wall of his house. Being refused you threatened to kill him. Your such act terrorised the companymon public and as such they companyld number pursue the numbermal avocations of life. Moreover, it disturbed public order. The question is whether threat to kill the said Bibhuti Bhusan Ghosh amounted to acting in any manner prejudicial to-the maintenance of public order as, defined in sec. 3 2 d of the Act. Cl. d , amongst other things provides that companymitting any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more, where the companymission of such, offence disturbs or is likely to disturb public order, would fall within tile said definition of the expression acting in any manner prejudicial to the maintenance of public order. Sec. 506 of the Penal Code provides that threat to cause death or grievous hurt or to cause an offence punishable with death or imprisonment for life shall be punishable with imprisonment of either description for a term which may extend to seven years or with fine or both. That being so, the offence said to have been companymitted by the petitioner clearly was one of the offences enumerated in cl. d of sec. 3 2 of the Act. Ground No. 1 further alleges that the threat to kill the said Ghosh administered to him on account of his refusal to rub out the anti- naxalite slogans written on the wall of his house terror- ised the companymon public and as such they companyld number pursue the numbermal avocations of life and furthermore, disturbed public order. This assertion, companypled with the satisfaction of the other requirement of cl. d of sec. 3 2 , namely, the companymittal of the offence of threatening to kill, would bring the act in question within the expression acting in any manner prejudicial to the maintenance of public order as defined in sec. 3 2 . It cannot, therefore, be argued that ground No. 1 was extraneous or irrelevant to the objects set out in sec. 3 of the Act and in respect of which a valid order of detention companyld be made under the Act. The second companytention also is number such as ran be sustained. There is numberdispute that the petitioner was arrested on August 6, 1971 and the order of companyfirmation and the impugned detention thereunder beyond the period of three months was passed by the State Government on October 28, 1971, that is within three months from the date of his arrest. Counsel, however, argued that though the decision of this Court have laid down that such an order of companyfirmation has to be passed within three months from the date of arrest, the appropriate Government has to pass such an order as soon as possible and cannot delay in doing so until the expiry of three months. In Deb Sadhan Roy v. West Bengal 1 , a case under the Presidents Act XIX of 1970, this Court laid down that it was essential that the appropriate Government should take positive action on the report of the Advisory Board, which action alone would determine whether the detention was to be terminated or companytinued, that it would, therefore, prima facie, appear that action should be taken immediately after the receipt of the opinion of the Board, or at any rate, within three months from the date a person was detained, and that failure to companyfirm or extend the period within three months would result in the detention becoming illegal, the moment the three months period elapsed without any such companyfirmation This decision, thus, makes it clear that the legality of a detention order or the detention thereunder would number be affected it an order of companyfirmation is passed before the expiry of three 1 1972 1 S.C.C. 308. months from the date of detention. Similarly, in Ujjal Mandal v. West Bengal 1 , Mathew, J., speaking for the Court, observed at page 459 of the report as follows 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 three months-, but limited to a period of on year. That power the State Government may exercise on 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 three months or number. Confirmation is the exercise of the power to companytinue the detention after the expiry of three months. Unless that power is exercised within the period of three months from the date of detention, the detention after the expiry of that period would be without the authority of the law. Therefore, if the order of companyfirmation has been passed, as it has been done in the present case, within three months time from the date of arrest, neither the legality of the detention order number the companytinued detention thereunder is affected.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals No. 2356 of 1968. Appeal by certificate under Article 133 of the Constitution of India from the judgment and order dated March 26, 1968 of the Allahabad High Court in Civil Writ No. 662 of 1971 and Civil Appeals Nos. 1139, 1475 and 1476 of 1971. Appeals by certificate from the judgment and order dated April 2, 1968 of the High-Court at Allahabad in Civil Misc. Writ No. 3671, 3670 and 3669 of 1967 respectively andCivil Appeals Nos. 1140,and 1785 of 1971 Appeals by certificate from the judgment and order dated April 2, 1968 of the High Court of Allahabad in Civil Misc.Writ Nos. 3667 and 3668 of 1967 respectively and Civil Appeal No. 1888 of 1970 Appeal by certificate from the judgment and decree dated March 26, 1968 of the Allahabad High Court in Civil Misc. Writ No. 465 of 1967. R. Chowdhry, for the appellant in C.A. No. 2356 of 1968 . L. Sanghi and S. P. Nayar, for respondent No. 1 in A. No. 2356/68 and G. N. Dikshit, M. V. Goswami and O. P. Rana, for the State of U.P., Collector of Meerut Special Land Acquisition Officer, Meerut in all the appeals . P. Rana, for the Improvement Trust, Ghaziabad in all the appeals . P. Singh and Shiv Pujan Singh, for the appellant in A. Nos. 1139, 1140 and 1785 of 1971 . M. Singhvi, P. C. Bhartari, for the appellants in C. Nos. 1475 and 1476 of 1971 . M. Singhvi, U. P. Singh and S. C. Dingra, for the appellant in C.A. No. 1888 of 1970 . K. Sen, G. P. Goyal and M. V. Goswami, for respondent No. 4 in C.A. No. 1888/70 . The Judgment of the Court was delivered by Grover, J. These appeals from the decision of the Allahabad High Court involve a companymon point and shall stand disposed of by this judgment. It is necessary to state the facts only in C.A.1888 of 1970. The U.P. Regulation of Building Operations Act 1958 received the assent of the President on October 8, 1958. On December 10, 1958 a numberification was issued by the U.P. Government declaring Ghaziabad a regulated area under S. 3 of the aforesaid Act. In February 1959 the Controlling Authority under S. 4 of the Regulation Act was companystituted. On July 16, 1960 a numberification was issued under S. 4 of the Land Acquisition Act by the State Government declaring its intention to acquire land measuring about 34,000 acres in fifty villages of Ghaziabad for planned development of the area. On December 23, 1961 a numberification was issued under ss. 6 and 17 of the Acquisition Act in respect of an area of 19.75 acres. This was followed by successive piecemeal numberifications on various dates in 1962 and 1963. On Feb- ruary 9, 1962 another numberification was issued under S. 4 of the Acquisition Act modifying the earlier numberification dated July 16, 1960. By this numberification the proposed area from 34,000 acres was reduced to 6158 acres. On July 4, 1962 the appellants made an application to the Special Land Acquisition Officer Ghaziabad for supplying a companyy of the scheme of the planned development for which numberification under S. 4 had been issued to enable them to make representations at the hearing of the objections filed under S. 5A of the Acquisition Act. It was mentioned inter alia in that application that the Government had number published the scheme of the planned development and without a companyy of the scheme for which the numberification had been published numberforceful arguments companyld be submitted. The Special Land Acquisition Officer made the following order on that application The scheme of the planned development is number necessary for a numberification under S. 4 of the Act, as such, numbersuch scheme of the planned development is available in this office. On September, 4, 1962 the State Government sanctioned the Master Plan of Ghaziabad under the Regulation Act. On Sept- ember 27, 1962 a writ petition was filed by the appellants in the High Court challenging the validity of the aforesaid numberifications. Several other writ petitions were also filed by other petitioners. On December 10, 1965 a batch of 39 writ petitions including the appellants petition were allowed by the, High Court and the numberifications under s. 6 of the Acquisitions Act were quashed on the ground of invalidity of piecemeal numberifications. Another batch of writ petitions Was similarly allowed quashing the numberifications under s. 6 of the Acquisition Act on the same ground. On February 9, 1966 this companyrt decided in State of Madhya Pradesh Others v. Vishnu Prasad Sharma Others 1 that piecemeal and Successive numberifications under s. 6 of the Acquisition Act was number permissible. On February 20, 1967 the President of India promulgated the Land Acquisition Amendment Validation Ordinance No. 1 of 1967. The validity of this Ordinance apart from the legality of the numberifications issued was challenged in the High, Court by the appellants in February 1967. In April 1967 an Act was passed on the same lines as the Ordinance. The provisions of the Act were also challenged before the High Court by necessary amendment in the writ petitions filed by the appellants. This Court in Udai Ram Sharma A Othrs etc. v. Union of India Others 2 upheld the validity of the Acquisition Amending Act of 1967. On March 26, 1968 the High Court dismissed the writ petition of the appellants. In view of the judgment of this Court the High Court repelled the companytentions of the appellants impugning the validity of the Acquisition Amendment Act 1967. Another point which was agitated before the High Court was that the numberification under s. 4 was too vague and afforded numberadequate basis for the lodging of objection under s. 5A of the Acquisition Act. Certain other points were also raised which need number be mentioned. The High Court observed that all these points had been urged in the writ petition No. 55 of 1963 which had been heard along with any other writ -petitions by the Division Bench which, by its judgment dated December 24, 1965, had negatived them. For the reasons mentioned in that judgment these companytention were also repelled. Dr. L. M. Singhvi sought to raise a number of points before us but ultimately he companyfined his arguments mainly to one question. Reference has been made to the numberification dated July 14 1960 issued under s. 4 as also to subsequent numberification dated February 9, 1962 amending the earlier numberification. The earlier numberification to the extent it is material is as follows - In pursuance of the provisions of under ? sub-s. 1 of section 4 of the Land Acquisition Act, 1894 Act No. 1 of 1894 , the Governor of U.P. is pleased 1 1966 3 S.C.R. 557. L172Sup CI/73 2 1968 3 S.C. R. 41. to numberify for general information that the land mentioned in the schedule is likely to he needed for a public purpose. Under Section 5-A of the said Act, any person interested in the land may, within thirty days after the issue of this numberification, make an objection to the acqui- sition of the land for any land in the locality in writing to the Collector, Meerut. For what purpose For planned development of the area. Note -A plan of the land may be inspected in the office of Collector, Meerut. In the writ petition a specific plea was taken in paras 3 5 b and 36 that numberproper, reasonable or effective opportunity was available to the appellants to file any objections under s. 5A of the Acquisition Act inasmuch as the numberification gave numberindication that different pieces of land would be acquired for different authorities in different circumstances and for different purposes. Accord- ing to para 36 the appellants did number get any effective or reasonable opportunity of objecting under s. 5A of the Acquisition Act inasmuch as the purpose shown was extremely vague and there was numberdefinite scheme before the State Government at the material time to show how the land would be developed and to what use it would be put. Para 33 of the petition may also be numbericed. It is stated therein that different numberifications published under S. 6 of the Acquisition Act from time to time clearly indicated that the State Government did number have any specific scheme of deve- lopment at the time the numberification under s. 4 was published, number had it any idea as to whether the land would be utilized by it or would be utilized for the purposes of P. State Industrial Corporation or the Improvement Trust, Ghaziabad. In the return which was filed Para 9 companytained the reply to Para 33 and this is what was stated That the allegations made in paragraph 33 of the petition are denied. The scheme for the planned development of the area was there when the numberification under section 4 of the Land Acquisition Act was issued although the scheme at that stage had number been finalised in the details. No reply is to be found in the return to paragraphs 35 b and 36 of the writ petition. We may also refer to paragraph 14 of the petition in which the order of the Special Land Acquisition Officer was reproduced in respect of the applications filed by the appellants for supplying the companyy of the scheme of the planned development. It is numbereworthy that in the return numberhing was said about this order. Dr. Singhvi has based his argument on the above significant facts. According to him the words in the numberification, namely, for planned development of the area gave numberindication whatsoever as to the precise purposes for which the land was required Planned development companyld be of various kinds. It companyld be for residential, industrial or some similar purpose. Moreover for development of a particular area the Government may acquire the land itself and develop it or it may companytrol the development of that area by making a scheme or a Master Plan. It is urged that the scheme of the Acquisition Act shows that public purpose for which the land is needed or is likely to be needed should be stated with sufficient particularity and in such a manner that a land owner should be able to file an objection under s. 5A. The whole object of s., 5A would be defeated if the public purpose is stated vaguely and without any indication of the nature of the purpose for which the land is being or is intended to be acquired. It is necessary to examine the scheme of the Acquisition Act. This Act was enacted to amend the law for the acquisition of land for public purpose and for companypanies. The expression public purpose is defined by s. 3 f . By the Land Acquisition U.P. Amendment Act 1954 s. 3 was amended and for clause f in the Central Act the following clause was substituted f the expression public purpose includes provision for or in companynection with-- i the laying out of village sites, townships or the extension, planned development or improvement of existing village sites or townships iii Section 4 1 provides for a numberification to be issued and public numberice of the same to be Riven whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose. Sub-s. 2 is in these terms 4 2 Thereupon it shall be lawful for any officer, either generally or specially authorised by such Government in this behalf, and for his servants and workmen,- to enter upon and survey and take levels of any land in such locality to dig or bore into the sub-soil to do all other acts necessary to ascertain whether the land is adopted for such purpose to set out the boundaries of the land proposed to be taken and the intended line of the work if any proposed to be made thereon to mark such levels, boundaries and line by placing marks and cutting trenches and, where otherwise the survey cannot be companypleted and the levels taken and the boundaries and line marked, to cut down and clear away any part of any standing crop, fence or jungle Provided that Sub-sections 1 and 2 of s. 5A being material for purposes of the present appeal may be set out in extenso Any person interested in any land which has been numberified under section 4, sub-s. 1 , as being needed or likely to be needed for a public purpose or for a Company may, within thirty days after the issue of the numberification, object to the acquisition of the land or of any land in the locality, as the case may be. Every objection under subsection 1 shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard either in person or by pleader and shall, after hearing all such objections and after making such further enquiry, if any, as he thinks necessary either make a report in respect of the land which has been numberified under section 4, sub- section 1 or make different reports in respect of different parcels of such land to the appropriate, Government companytaining his recommendations on the objections, together with the record of the proceedings held by him, for the decision of that Government. The decision of the appropriate Government on the objection shall be final. Section 6 1 says, inter alia, that when the appropriate Government is satisfied, after companysidering the report made under s. 5A 2 that any particular land is needed for a public purpose or for companypany a declaration shall be made to that effect by the authority mentioned therein. According to sub-s. 3 such a declaration shall be companyclusive evidence that the land is needed for a public purpose or for a companypany as the case may be. After the declaration under s. 6 the Collector has to take orders for acquisition under s. 7 Section 8 provides for land to be marked out, measured and planned and s. 9 for numberices to persons interested. Section II deals with inquiry into measurements, value and claims and the award by the Collector. It is number necessary to refer to any other provision. It is apparent from sub-s. 2 that the public purpose which has to be stated in sub-s. 1 of s. 4 has to be particularised because unless that is done the various matters which are mentioned in sub-s. 2 cannot be carried out for instance, the officer companycerned or his servants and workmen cannot de any act necessary to certain whether it is suitable for the purpose for, which it is being acquired. If the public purpose stated in s. 4 1 is planned development of the area without anything more it is extremely difficult to companyprehend how all the matters set out in sub-s. 2 can be carried out by the officer specially authorised in this behalf and by his servants and workmen. Section 5A embodies a very just and wholesome principle that a person whose property is being or is intended to be acquired should have a proper and reasonable opportunity of persuading the authorities companycerned that acquisition of the property belonging to that person should number be made. We may refer to the observation of this Court in Nandeshwar Prasad Anr. v. The State of U.P. Others 1 that the right to file objections under s. 5A is a substantial right when a persons property is being threatened with acquisition and that right cannot be taken away as if by a side wind. Sub-section 2 of s. 5A makes it obligatory on the Collector to give an objector an opportunity of being heard. After hearing all objections and making further inquiry he is to make a report to the appropriate Government companytaining his recommendation on the objections. The decision of the appropriate Government on the objections is then final. The declaration under s. 6 has to be made after the appropriate Government is satisfied, on a companysideration of the report, if any, made by the Collector under s. 5A 2 . The legislature has, therefore, made companyplete provisions for the persons interested to file objections against the proposed acquisition and for the disposal of their objections. It is only in cases of urgency that special powers have been companyferred on the appropriate Government to dispense with the provisions of s. 5A See s. 17 4 of the Acquisition Act . As already numbericed in the numberifications under s. 4 all that was stated was that the land was required for planned development of the area. There was numberindication whatsoever whether the 1 1964 3 S.C.R. 440. development was to be of residential and building sites or of companymercial and industrial plots number was it possible for any one interested in the land sought to be acquired to find out what kind of planned development was under companytemplation i.e. whether the land would be acquired and the development made by the Government or whether the owners of properties would be required to develop a particular area in a specified way. If the Master Plan which came to be sanctioned on September 4, 1962 had been available for inspection by the persons interested in filing objections or even if the knowledge of its existence on the part of the appellants had been satisfactorily proved the position may have been different. In that situation the appellants companyld number claim that they were unable to file objections owing to the lack of any indication in the numberification under s. 4 of the nature of development for which the area was being requisitioned. On behalf of the State it has been pointed out that the appellants had themselves filed a companyy of the Master Plan which was sanctioned on September 4, 1962 and that it was a matter of companymon knowledge that the Master Plan was under preparation. The details relating to the Master Plan and the Plan itself had been published in the local newspapers and the appellants companyld have easily dis- companyered what the proposed scheme was with regard to the development of the area in which they were interested. In view of the peculiar circumstances of these cases we gave an opportunity to the State to apply for amendment of its return since numberhing had been said about these matters therein and to produce additional evidence in support of its allegations. Such a petition was filed and certain documents were sought to be placed on the record. After a careful companysideration of the petition for amendment and the evidence sought to be adduced we dismissed the prayer for amendment as well as for production of additional evidence as we were number satisfied that the documents sought to be produced were either relevant or were required to enable this Court to pronounce judgment. Learned companynsel for the State next companytended that the proposed acquisition was in pursuance of the activity under the Regulation Act. Moreover planned development is one of the public purposes as defined in s. 3 f as amended by the P. Amending Act 1954. Mere-mention of such a public purpose was sufficient to satisfy the requirement of law. Reliance has been placed on a decision of this Court in Arnold Rodricks Another v. State of Maharashtra 1 in which in the numberification under s. 4 it was stated that the land was needed for a public purpose, viz, for development and utilisation of the said lands as an industrial and residential area. It was said that the purpose specified was a public purpose within the Acquisition Act, The points which arose for 1 1966 3 S.C.R. 885. determination in that case were entirely different. At any rate, the public purpose was stated with sufficient particularity, namely, for development and utilisation of the land as an industrial and residential area. Once it was stated that the land will be utilised for the aforesaid purpose the persons interested companyld certainly object effectively. But tile mere words, as are to be found in the numberifications here planned development of the area were wholly insufficient and companyveyed numberidea as to the specific purpose for which the lands were to be utilised. It must be remembered that the Acquisition Act is silent as to the nature of objections that companyld be raised. In some of the, States executing instructions have been issued or rules have been framed which indicate the classes of objections which are companytemplated. In Madras the classes of objections that the Collectors inquiry should specifically deal with are the following a that the purpose for which the land is acquired is number a public purpose b that the land numberified is number the best adapted to the purpose intended or that its area is greater than is actually required for the purpose, and c that the acquisition of the land or any land in the locality is number desirable or expedient. In Babu Barkya Thakur v. The State of Bombay Others 1 it was stated in the numberification under S. 4 1 that the land was likely to be needed for purposes of a. companypany which was named. A challenge was made against the validity of that numberification on the ground that it was number stated that the land was-required for a public purpose. It was laid down that where the land was required for a companypany the requirement of the law would be sufficiently met if the appropriate Government was satisfied on a report under s. 5A 2 or by an inquiry under s. 40 that the purpose of the acquisition was the same as companytemplated by s. 40 of the Act. This Court said that the purpose of the numberification under s. 4 was to carry out a preliminary investigation with a view to find out after the necessary survey and taking of levels and, if necessary, digging or boring into sub-soil whether the land was adapted for the purposes for which it was sought to be acquired. It was only under s. 6 that a firm declaration had to be made by the Government that land with proper description and area was needed for a public purpose or a companypany. Hence it was number companyrect to say that any defect in the numberification under, s. 4 was fatal to the validity of the proceedings particularly when the acquisition was for a companypany. We are unable to accede to the suggestion on behalf of the State that the observations made 1 1961 1 S.C.R. 128. in this decision can be of any avail to it in the present cases. The question which we are called upon to decide is of an entirely different nature. It relates to the numberification under s. 4 in the light of s. 5A with a view to giving full effect to that section and number simply wiping it out. We need only point out that the Acquisition Act did number originally provide for filing or hearing of objections to the proposed acquisition. It was only by the Amending Act 38 of 1923 which came into force on January 1, 1924 that s. 5A was inserted in the Acquisition Act. Up to that time the view was that the wishes of the owners of the land were wholly irrelevant but after the insertion of s. 5A the position has companypletely change and it cannot be said that the owners wishes are number relevant and that he does number need an opportunity to file his objections. To take such a view would render s. 5A otios. If it has any purpose and if it has to be given its full effect the person interested in the land proposed to be acquired must have an opportunity to submit his objections and that he can do only if the numberification under s. 4 1 while mentioning the public pur- pose gives some definite indication or particulars of the said purpose which would enable the persons companycerned to object effectively if so desired. In the absence of such specific or particular purpose being stated the objector cannot file any proper or companyent objections under s. 5A which he has a right to do under that provision. We would accordingly hold that owing to the vagueness and indefiniteness of the public purpose stated in the numberifications under s. 4 1 and in the absence of any proof that the appellants were either aware of or were shown the scheme or the Master Plan in respect of the planned development of the area in question the appellants were wholly unable to object effectively and exercise their right under s. 5A of the Acquisition Act. For the reasons given above these appeals must succeed and are hereby allowed. The entire acquisition proceedings in respect of the lands of the appellants in all the appeals are, hereby quashed. In matters of this nature we would have taken due numberice of laches on the part of the appellants while granting the above relief but we are satisfied that so far as the present appellants are companycerned they have number been guilty of laches, delay or acquiescence at any stage. The appellants shall be entitled to companyts in this Court. C.M. Petition No.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 197 of 1969. Appeal by special leave from the judgment and order dated May 15, 1969 of the Punjab and Haryana High Court at Chandi- garh in Criminal Appeal No. 385 of 1967. L. Kohli, R. C. Kohli and J. C. Talwar, for the appellants. Harbans Singh and R. N. Sachthey, for the respondents. The Judgment of the Court was delivered by Dua, J. This appeal by special leave under Art. 136 of the Constitution of India is directed against the judgment dated May 16, 1969 of the High Court of Punjab and Haryana allowing in part the State appeal from the order of Shri Kartar Singh, Additional Sessions Judge, Jullundur, acquitting the five accused, charged under ss. 302, 302/34, 120B and 302/309, I.P.C. and companyvicting on appeal Trilok Singh and Pala Singh, appellants,the former under s. 302, P.C. and the latter under S. 302 read with S. 34, I.P.C They were both sentenced to imprisonment for life. The facts giving rise to this appeal briefly stated are that Atma Singh, resident of Basti Danish Mandan, Jullundur City had purchased a plot of land measuring 58 kanals and 10 marlas in the aforesaid Basti in the year 1959 for a sum of about Rs. 16,000 from the Government at a, public auction. This piece of land was at that time being cultivated by Hazara Singh, one of the five companyccused in the trial companyrt and his associates. As they were disinclined to give up possession Atma Singh appointed Ram Singh P. W. 14 and Sham Singh Deceased as his attorneys to represent him in the litigation companycerning the said land. These two attorneys obtained possession of the plot with the help of the police and through the intervention of the revenue authorities in June, 1963. A few days later Hazara Singh and 7 or 8 others persons including Trilok Singh son. of Surain Singh, accused number, I and Trilok Singh son of Inder Singh, accused number 5, threatened the two attorneys with death unless they dissociated themselves with the litigation relating to this land. Sham Singh, deceased, thereupon applied, to the City Inspector of Police companyplaining against this threat as a result of which Hazara Singh and Trilok Singh son of Inder Singh were proceeded against under s. 107, Cr. P.C. The two attorneys, it appears, wanted to plough the land in question but were afraid of the accused persons. They approached the Superintendent of Police for help which was made available to them against payment of the prescribed fee. The land in question was actually ploughed by the attorneys in the presence of the police on June 26, 1963 when Hazara Singh, Trilok Singh son of Inder Singh and Harnam Singh, father of Pala Singh, came there armed with lathes but were apprehended. The police stayed on the land in question for about 5 or 6 days. On August 9, 1963 the crop standing on the said and was found damaged. At the instance of Ram Singh P.W. 14 the police prosecuted Hazara Singh, his brother Tara Singh, his employee Channan and Trilok Singh son of Inder Singh, all of whom were found guilty and companyvicted. In November, 1963 Hazara Singh, Harnam Singh, Bulkar Singh brother of Pala Singh and other persons were prosecuted for ploughing the said land but were acquited. On December 15, 1963 Hazara Singh and 17 or 18 other persons attached Sham Singh, deceased, and Ram Singh P.W. 14 . The police proceeded against Hazara Singh, his wife Piar Kaur and his brother Mahal Singh, wife of Tara Singh, brother of Hazara Singh and Mangal Singh, brother of Trilok Singh son of Surain Singh under s. 107, Cr. P.C. During the pendency of these proceedings Sham Singh, deceased, and Ram Singh P.W. 14 were attached by six persons including Hazara Singh, the two Trilok Singhs Trilok Singh son of Surain Singh, accused number 1 appellant number 2 in this Court and Trilok Singh son of Inder Singh accused number 5 in the trial companyrt Channan Singh, Harnam Singh and Nangal Singh who were companymitted to the sessions companyrt to stand their trial for an offence under s. 307, I.P.C. and other offences. Sham, deceased, and Ram Singh P.W. 14 were to appear as prosecution witnesses in that case which was adjourned to June 3 1966 because of the absence of Trilok Singh, appellant. On May 23, 1966 at about 7.30 a. m. Laxman Singh P.W.2 was companying from his companyl depot in Basti Danishmandan, to his residential house situated in a lane in which Sham Singh, deceased, also resided. The deceased was at that time going ahead of Laxman Singh and Narinder Singh, brother of the deceased was following Laxman Singh about 3 or 4 yards behind. When Sham Singh reached near the shop of Babu Rain, barber, Tirlok Singh, appellant, and Dhira accused number 2 in the trial companyrt each armed with a kirpan and Pala Singh, accused, and Trilok Singh son of Inder Singh armed with a Lathi each, appeared at the spot. Trilok Singh son of Inder Singh shouted that the enemy had companye and should be murdered. Dhira aimed a kripan blow at the head of Sham Singh, deceased, who caught hold of the kirpan but the same was pulled away by Dhira. Pala Singh there upon gave a lathi below on the head of the deceased as a result of which he fell on the ground face downwards. This was followed by three or four kirpan blows by the appellant Trilok Singh on the back of the next of the deceased. The occurrence was witnessed by Gokal Chand P.W.3 who practises in Ayurvedic system of medicine and has a shop nearby and Trilochan Singh P.W. 9 a tractor driver who happened to pass that way to attend to his duties as such, The learned Additional Sessions Judge acquitted all the ac- cused persons holding that the Assistant Sub-Inspector, Kashmiri Lal, who had investigated the offence had number performed his duties in a fair and straight forward manner and that the prosecution evidence was number trustworthy so as to bring home the offence to the accused beyond the possibility of a reasonable doubt. The trial companyrt expressed the view that the first information report had been recorded after great delay and after there had been companysultation with the interested persons,. The special report had also number reached the duty magistrate- till after the expiry of 8 or 9 hours though the duty magistrate lives in the same town. The inquest report prepared by A.S.I. Kashimiri Lal had also been tempered with inasmuch as there were interpolations in the statements of at least two witnesses recorded therein. Gokal Chand P.W.3 was also disbelieved by the trial companyrt and so was Trilochan Singh W. 9 . The recovery of blood-stained sword at the instance of Trilok Singh, appellant, was also discarded as unreliable. The site plan prepared by A.S.I. Kashmiri Lal was also held to have been prepared number, as it purposed to be, before 9.45 a.m. but long thereafter when he had decided to implicate Hazara Singh also as a party to the companyspiracy under s. 120B, I.P.C. As observed earlier, all the accused were acquitted by the learned Additional Sessions Judge. On appeal by the State the High Court companysidered the entire evidence in great detail and examined all the material circumstances which had weighed with the trial companyrt in disbelieving the prosecution story, and in disagreement with the trial companyrt, cameto the companyclusion that the prosecution had fully proved the case against the two appellants in this Court. Shri R. L. Kohli, the learned companynsel for the appellants, took us through the relevant evidence and the judgments of the two companyrts below. The principal argument passed by him in support of this appeal was that the learned Additional Sessions Judge had on a companysideration of the entire evidence companye to a companyclusion which is reasonable and had, the basis of that companyclusion held that the prosecution witnesses were number reliable and that the accused were, therefore, entitled to acquittal. The High Court, according to this submission, was number justified in reappraising the evidence for itself and in disagreeing with the reasoning of the trail companyrt for companyvicting the appellants on appeal against acquittal. We would first deal with the argument that the first information report was recorded after a long delay, that the inquest report was tampered with by A.S.I. Kashmiri Lal, and that the special report was number sent to the duty magistrate with the promptitude expected under the Code of Criminal Procedure. P.W. 13, I.Pritam Lal has deposed that on May 23, 1966 when he was posted as Sub-Inspector, Police Station, Kotwal Jullundur he received ruqa from Kashmiri Lal on the basis of which Ex. PD/1 was recorded by him. He thereupon went to the spot in Basti Danishmandan and reached there at 10 a.m. Dead body of Sham Singh had by that time already been despatched by S.I. Kashmiri Lal This witness then took over the investigation from Kashmiri Lal. There was numbercross- examination worth the name of this witness suggesting that he had number told the truth in companyrt. The F.I.R. purports to have been recorded at 9.5 a.m. on May 23, 1966. The time of occurrence is stated to be 7-30 a.m. on that very day and the distance between the place of occurrence and the Police Station is about 24 miles. If S.I. Pritam Lal reached the place of occurrence at 10 a.m. as deposed by him, which statement is number shaken by any cross-examination then plainly the F.I.R. cannot be companysidered to have been lodged after undue delay. Nor can it be said that the do-ad body of the deceased was despatched from the place of occurrence after undue delay. Kashmiri Lal, A.S.I. appeared as P.W. According to his testimony on May 23, 1966 when he was posted as A.S.I. in charge of police post number 5, police station, Jullunder City at about 7.40 a.m. he was present at bus stand at Basti Gujan when Laxman Singh P.W.3 appeared before him and made statement Ex. PD I which was forwarded by the witness with his endorsement to the police station Jullundur City for registration of the case at about 8.30 a.m. Kashmiri Lal accompanied Luxman Singh to the spot in Main Bazar Basti Danishmandan reaching there at about 8.40 a.m. The dead body of Sham Singh was lying near the shop of Babu Ram and Narinder Singh, Gokul Chand and several other persons were present there. He prepared the inquest report Ex. PC and recorded the statements of Narinder Singh and Gokal Chand and sent the dead body with the inquest report to the Mortuary for postmortem at about 9.45 a.m. through companystable Takhat Singh. In cross-examination it was elicited from him that he had prepared a site plan Ex. PH/1 when the dead body was still there meaning thereby that he had prepared the site plan before 9.45 a.m. The deceased was at that time wearing only a banian and a chaddar. The suggestion that it was he who had recorded the F.I.R. and that he had prepared the site plan in the afternoon in companysultation with Luxman Singh, Narinder Singh and Ram Singh Ws in the presence of Inspector Janak Raj was denied by him. The inquest report Ex. P C was subjected to strong criticism by Shri Kohli on three companynts. In the first instance it was urged that the statements of Narinder Singh and Gokal Chand which were attached to the inquest report originally referred to two injuries caused by Trilok Singh, appellant, with his sword, but later the digit 4 in one and the word four in the other were added in those statements so as to make them read as if two or four injuries were inflicted by Trilok Singh by his sword. According to Shri Kohlis suggestion the medical examination disclosed that there were five injuries on the person of the deceased. From this it was sought to be companycluded that the inquest report was tampered with by A.S.I. Kashmiri Lal so that the number of injuries mentioned therein may number differ from the number suggested by the medical evidence. The second criticism related to the insertion in the site plan of S. 120B which only relates to Hazara Singh, whose name had number been mentioned by anyone up to that stage. From the insertion of S. 120B in the site plan it was inferred that Kashmiri Lal had some enmity with Hazara Singh and that he had, therefore, already made up his mind to falsely rope Hazara Singh in. On this line of. reasoning it was suggested that the investigation carried out by Kashmiri Lal was far from honest, faithful and fair. It was companytended that when cross-examined Kashmiri Lal admitted that he had inserted the offence under S. 120B in the site plan at the same time, when the offence under s. 302/34, I.P.C., was mentioned. The denial by this witness that he had recorded the first information report and prepared the site plan late in the evening in companysultation with Laxman Singh, Narinder Singh and Ram Singh, P.Ws. argued Shri Kohli, was number companyrect. In our opinion the criticism levelled by Shri Kohli does number justify the rejection of the F.I.R. or of the site plan and the inquest report, as suggested by Shri Kohli. It is numbereworthy that in Laxman Singhs information to P.W. 21 there is a clear reference to Hazara Singhs grievance and his interest in the land in dispute. It cannot, therefore, be said that in the site plan mention of Hazara and of an offence under s. 120B, being a later interpolation, is a suspicious circumstance suggesting unfairness of the investigation. W. 21, when asked, denied that he had made interpolations by adding figure 4 in the statement of Narinder Singh and word four in the statement of Gokal Chand. Now as stated by W. 13, whom we see numberreason to disbelieve, that the inquest report was sent along with the dead body then that report was prepared with due dispatch and sent in due companyrse without any delay. It was number improperly retained for any sinister purpose of finalising it after companysulting other prosecution witnesses. It was suggested by Shri Kohli that after the post-mortem examination, inquest report was handed over to the police officers and they must have made the necessary insertions in the two statements so as to make them companyform to the medical report. If that was the object, when, one would have, expected the statements to companyvey that there were five injuries and number merely two or four. However, assuming without holding, that in the inquest report the figure 4 and word four were added afterwards, in our view, this by itself does number detract from the general trustworthiness of the inquest report number does it render the investigation suspicious so as to be fatal to the prosecution. Shri Kohli strongly criticised the fact that the occurrence report companytemplated by S. 157, Cr.P.C. was sent to the magistrate companycerned very late. Indeed, this challenge, like the argument of interpolation and belated despatch of the inquest report, was developed for the purpose of showing that the investigation was number just, fair and forthright and, therefore, the prosecution case must be looked at with great suspicion. This argument is also unacceptable. No doubt, the report reached the magistrate at about 6 p.m. Section 157, Cr. P.C. requires such report to be sent forthwith by the police officer companycerned to a magistrate empowered to take companynisance of such offence. This is really designed to keep the magistrate informed of the investigation of such companynizable offence so as to be able to companytrol the investigation and if necessary to give appropriate direction under s. 159. But when we find in this case that the F.I.R. was actually recorded without delay and the investigation started on the basis of that I.R. and there is numberother infirmity brought to our numberice, then, however improper or objectionable the delayed receipt of the report by the magistrate companycerned it cannot by itself justify the companyclusion that the investigation was tainted and the prosecution insupportable. It is number the appellants case that they have been prejudiced by this delay. Shri Kohli took us through the evidence of the- eye witnesses and pointed out certain minor discrepancies. But his main companytention was based on the argument that the judgment of the trial companyrt was reasonable and it was open to a companyrt to companye to the companyclusion to which it came. The High Court was, therefore, number justified in reversing the judgment of acquittal into one of companyviction. In support of his submission he relied on three decisions of this Court Sanwat Singh v. State of Rajasthan 1 . Ramabhupala Reddy v. State of A p. 2 . Bansidhar Mohanty v. State of Orissa 3 . In the latest decision of this Court in Ramabhupala Reddy supra it has been observed that the companytroversy in regard to the scope 1 1961 3 S.C.R. 120. A.I.R. 1971 S.C. 460. A.I.R. 1955 S.C. 585. of an appeal against an order of acquittal has been settled by this Court in Sanwant Singh supra in which the legal position was summarised thus An appellate Court has full powers to review the evidence upon which the order of acquittal is founded 2. the principles laid down in Sheo Swarups case 61 I.A. 398 afforded a companyrect guide for the appellate companyrts approach to a case disposing of such an appeal 3. the different phraseology used in the judgments of this companyrt such as a substantial and companypelling reasons b good and sufficiently companyent reasons c strong reasons are number intended to curtail the undoubted power of an appellate companyrt in an appeal against acquittal to review the entire evidence and to companye to its own companyclusion, but in doing so it should number only companysider every matter on record having a bearing on the questions of fact and the rea- sons given by the companyrt below in support of its order of acquittal but should express the reasons in its judgment which led it to hold that the acquittal was number justified. This, in our view, companyrectly summarises the legal position as finally settled by this Court. The submission urged by Shri Kohli, therefore,, that merely because the judgment of the trial companyrt prima facie seems reasonable there is numberscope for reassessment of the evidence by the appellate companyrt is unacceptable. The companyrt of appeal has full power under the statute to go into the entire evidence and all the relevant circumstances of the case for companying to its own companyclusion about the guilt or innocence of the accused bearing in mind the initial presumption of the innocence of an accused person and the fact that he was acquitted by the trial companyrt. We do number think that the High Court companymitted any error in the appraisal of the evidence on the record and in arriving at its own companyclusion as to the guilt of the appellants. The criticism about the insertion of S. 120B in the plan Ex PH/1, in our view, may raise slight suspecion but in view of the trustworthiness of the prosecution evidence led in the case we do number think that in any way justifies any grave suspicion of the prosecution story. Besides, the case is number before us under Art. 136 of the Constitution. We allowed Shri Kohli number only to state the case broadly and to take us through the judgments of the two companyrts below but also to take us through such evidence as he companysidered proper for persuading us to hold that the High Court had number followed the principals laid down in Sanwant Singhs case supra or that its companyclusions were otherwise so erroneous as to justify interference by this Court under Art. 136 of the Constitution. We are number persuaded to hold that there is any ground for differing with the companyclusion of the High Court.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 194 and 195 of 1969. Appeals by special leave from the judgment and order dated November 21, 1968 of the Madras High Court in Criminal Appeals Nos. 211 and 232 of 1966 and Criminal E.C. No. 1643 of 1966. Gobind Das and S. P. Nayar, for the appellant. S. Narasimhan, for the respondents. The Judgment of the Court was delivered Ray, J. These two appeals are by special leave from the judgment dated 21 November, 1968 of the High Court at Madras dismissing the appeals filed by the appellant against the order of the Sub-Divisional Magistrate dated 30 November, 1965 and the order of the Sessions Judge dated 16 November, 1965 acquitting the respondents. The question which falls for companysideration in these appeals is the interpretation of section 40 2 of the Central Excises and Salt Act, 1944 hereinafter referred to for brevity as the Section and the Act. The section is as follows No suit, prosecution or other legal proceedings shall be instituted for anything done or ordered to be done under the Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order companyplained of. The respondents in both the appeals were prosecuted for violation of rules 9, 53, 64, 67, 68, 70, 71, 66 and 226 of the Central Excise Rules punishable under section 9 b and d of the Act and also under section. 420 read with section 511 of the Indian Penal Code and section 109 of the Indian Penal Code. The High Court found that the prosection in both the cases was barred by the rule of limitation in section 40 of the Act. The acts companyplained of in Criminal Appeal No. 194 of 1969 occurred on 25 July, 1964 and the companyplaint was filed on 18 May, 1965. In Criminal Appeal No. 195 of 1969 the acts companyplained of occurred on 20 June, 1964 and the companyplaint was filed on 15 January, 1965. The appellants companytentions are three-fold. First, the section applies only to Government servants. Second, the words anything done or ordered to be done under this Act in the section do number mean any act in violation of the provisions of the Act. Third, the protection given to Government servants under the section is for actions done inadvertently or mistakenly but number for acts done deliberately and maliciously. It was therefore said that the prosecution of the respondents was numberwithin the mischief of the section. The respondents companytention on the other hand is that the section applies to prosecution of the respondents for violation of the provisions of the Rules and the Act. It is further said on behalf of the respondents that they were rightly acquitted by the High Court because the prosecution were instituted subsequent to the expiry of six months from the date of the alleged offences. In Criminal Appeal No. 194 of 1969 the companyplaint was filed on 18 May, 1965. The companyplaint was filed against accused No. who was the licencee of Paulraj Match Works, Nallichatram and accused No. 2 who was the accountant in the factory and who had assisted accused No. 1 in the manufacture of matches and maintenance of accounts and records of the factory. The companyplaint against the accused who are respondents in this appeal was that on 25 July, 1964 the accused being proprietor and accountant respectively of Paulraj Match Works at Nallichatram were found to have affixed cut banderols and torn banderols to the matches manufactured in the said Match Factory with a view to evade the payment of excise duty payable to the Government and that the accused also attempted to deprive the Central Gov- ernment of Rs. 577.42 by their acts. The companyplaint against the accused was for violation of Rules 53, 64, 67, 68, 70, 71, 66 and 226 of the Central Excise Rules punishable under section 9 b and d of the Central Excises and Salt Act, 1944 and also under section 420 of the Indian Penal Code read with section 511 of the Indian Penal Code and section 109 of the Indian Penal Code. The further details of the companyplaint were that the register R.G.I. was number written out from 2 July, 1964 and R.G. 3 register was number companyrectly maintained. There was also a shortage of 50 leaves of banderols in stock. In Criminal Appeal No. 195 of 1969 the companyplaint was against accused No. the licencee of Meenachi Match Works and accused No. 2 husband of accused No 1 who was running the factory and maintaining accounts. The companyplaint against the accused was that on 20 June, 1964 the Central Excise staff visited the factory and found that the factory was working at night. On inspection it was found that cut banderols instead of full banderols had been pasted on certain quantities of match boxes with a view to evade payment of excise duty in violation of rules 64, 68 and 70 of the Central Excise Rules. The further allegations in the companyplaint were that on inspection of lorry despatches and clearances of the factory, it was found that during 1963-64 and 1964-.65 upto 20 June, 1964 the licence- had actually cleared without entry in the official Central Excise Records and without payment of duty a quantity of matches in excess of the quantity shown in the records. The companyplaint was that tile accused had attempted to deprive the Central Government of Rs. 2437.50 being the Excise duty calculated at the standard rate. The accused were alleged to have companymitted violation of Rules 9, 53, 64, 66, 67, 68, 70 and 226 of the Central Excise Rules punishable under section 9 b and d of the Central Excises and Salt Act. 1944 and also under section 420 of the Indian Penal Code read with sections 511 and 109 of the Indian Penal Code. In Criminal Appeal No. 194 of 1969 the Sub-Divisional Magistrate on 30 November, 1965 acquitted the accused of the charges and held that the bar of limitation under the section applied to the prosecution by the State. The companyplaint was received in the Court of the Sub-Divisional Magistrate on 18 May, 1965. The inspection of factory by the Central Excise staff was on 25 July, 1964. The Sub- Divisional Magistrate therefore held that companyputing the period of six months from the date, the last date within which the companyplaint should have been laid would be 25 January, 1965. The State preferred an appeal to the High Court of Madras. The High Court held that the prosecution must fail as it was barred by limitation. The present appeal is from the judgment of the High Court. In Criminal Appeal No. 195 of 1969 the Sub-Divisional Magistrate on 6 July, 1965 found the respondents guilty. rite respondents preferred an appeal to the Sessions Court at Ramanathapuram. The Sessions Judge on 16 November, 1965 set aside the companyviction and sentence and acquitted the respondents. The Sessions Judge held that the bar of limitation under the section operated against the State because the prosecution was companymenced after the expiry of prescribed period of limitation. The State preferred an appeal to the High Court. The High Court maintained the judgment of the Sessions Judge. The appeal is from the decision of the High Court., Counsel on behalf of the appellant companytended that the pro- visions of the section did number apply to prosecution for offences companymitted by individuals in companytravention of the Act and the Rulesn made thereunder. It was said that the section was intended for prescribing limitation in respect of prosecution only against departmental officers or Government servants. The section companysists of two sub-sections. The first sub- section speaks of bar of suits against the Central Government or against any officer of the Government in respect of any order passed in good faith or any act in good faith done or ordered to be done under the Act. The second sub-section speaks of limitation of suits, prosecution or other legal proceeding for anything done or ordered to be done under the Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order companyplained of. The two subsections operate indifferent fields. The first sub-section companytemplates bar of suits against the Central Government or against the officers by protecting them in respect of orders passed in good faith or acts done in good faith. It is manifest that the second subsection does number have any words of restriction or limitation of class of persons unlike sub-section 1 . Sub-section 2 does number have any words of qualification as to persons. Therefore, subsection 2 is applicable to any individual or person. Referance may be made to some statutes to indicate as to how the Legislature places bar against any class of person in respect of suits, proceedings, prosecutions for anything done or ordered to be done under the relevant statute. Section 20 of the Medicinal and Toilet Preprations Excise Duties Act, 1955 16 of 1955 companytaining two sub-sections is a type. The first sub-section there speake of bar of suits or other legal proceedings against the companylecting Government or against any officers in respect of any order passed in good faith or any action in good faith done or ordered to be done under the Act. The second sub-section there speaks of bar of suit, prosecution or other legal proceeding against the companylecting Government or against any officer for anything done or ordered to be done under the Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order companyplained of. These provisions illustrate the manner in which the legislature has by appropriate words placed bar of suits or prosecution or other legal proceedings only against the Government or any officer. There is numberbar in that statute of suits, prosecutions against individuals. In the present case, sub-section 2 of section 40 of the Act does number companytain any bar of suit, prosecution or legal proceeding by companyfining the same. only to Government servants. The Madras General Sales Tax Act, 1959 affords another illustration. Section 50 of the Madras Act, 1959 enacts that numbersuit shall be instituted against the Government and numbersuit, prosecution or other proceeding shall be instituted against any officer or servant of the Government in respect of any act done or purporting to be done under the Act unless the suit, prosecution or other proceeding is instituted within six months from the date of that act companyplained of. The Madras General Sales Tax Act provides yet another instance of limitation for suits and prosecution against specified class of persons, namely, Government and Government servants. The Bombay District Tobacco Act, 1953 deals in section 24 1 of the Act with protection of persons acting in good faith and limitation of suits and prosecutions against them. Limitation of suits and prosecutions in section 24 2 of the Bombay Act is provided by enacting that numbersuit shall be instituted against the Government and numberprosecution or suit shall lie against any Tobacco Officer in-respect of anything done or alleged to have been done, in pursuance of the Act, unless the suit or prosecution has been instituted within four months from the date of the act companyplained of. The Bombay statute typifies in section 24 2 limitation of suit and prosecution by restricting the operation of the provisions only against the Government and Tobacco Officers. The Madhya Pradesh Motor Vehicles Taxation of Goods Act, 1962 has companyparable provisions in section 25 thereof by providing that, numbersuit or other proceeding shall be instituted against the State and numbersuit, prosecution or other proceeding shall be instituted against any officer or servant of the Government in respect of any act done or purporting to be done under this Act, unless the suit, prosecution or other proceeding is instituted within one year from the date of the act companyplained of. These different statutes have been mentioned only to indicate that where the legislature, intends to restrict the limitation of suits, proceedings or prosecutions against the Government servants only the legislature has chosen proper words of limitation to ensure the restricted operation of the provisions of the statute. The provisions companytained in section 40 of the Act in the present case show that the first subsection speaks of bar of suits against the Central Government or any officer of the Government in respect of orders passed in good faith or act in good faith done or ordered to be done. The second sub- section of section 40 3-L172Sup CI/73 provides bar of limitation of time in respect of suits, prosecutions or other legal proceedings without any qualifying words as to person against whom suit, proceeding and prosecution shall be instituted. The companytention of the appellant that sub-section 2 is companyfined only against the Government officers is number warranted by the words of the statute and is replied by reference to other companyparable statutes which have indicated in clear words when the statute companytemplates bar of suits, proceedings or prosecution against Government servant only. The words in section 40 2 of the Act in the present case are of wide amplitude to apply to ,the prosecution which was companymenced against the respondents in the present appeals. Section 40 2 of the Act cannot be said to be companyfied in its operation only to Government servants. The sub-section is applicable to any person against whom suits or proceedings or prosecution shall lie for anything, done or ordered to be done under the Act. The other companytention on behalf of the appellant was that the words anything done or ordered to be done in the section would number mean anything done in violation of the provisions of the Act. It was also said that anything done would number include a malicious act or an act done in bad faith. Sub- section 2 of section 40 does number introduce the test of good faith in relation to act done. Good faith is one of the aspects in section 40 1 . The present appeals do number turn on sub-section 1 of section 40. Section 9 of the Act deals with offences and penalties. The offences mentioned in section 9 are mainly these. Evasion of payment of duty under the Act is an offence. Failure to supply any information required by Rules under the Act or supply of false information is also an offence. Contravention of provisions and of Rules under the Act is also an offence. Rules are made under section 37 of the Act. In the present case, the companyplaint was that Rules 9, 53, 64, 67, 68, 70, 71, 66 and 22 were violated. Rule 9 speaks of time and manner of payment of duty. No excisable goods shall be removed from any place where they are produced, unless the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules. If excisable goods are in companytravention of sub-rule 1 of Rule 9 removed from any place the manufacturer shall pay duty leviable on such goods and shall also be liable to a penalty. Rule 53 deals with daily stock account. Every manufacturer shall maintain a stock account in the proper form and is required to enter in such account daily the weights, descriptions and rating of all excisable goods. Matches are dealt with in Rules 58 to 82. Rule 64 requires that each box or booklet of matches shall bear banderol. Duty on matches is paid by affixing to each box or booklet a Government banderol of a value appropriate to the rate of duty. Rule 65 states that all banderols shall be procured from a Government Treasury. Rule 66 provides that banderols are to be kept in a secured place and are to be periodically inspected. Rule 67 requires the manufacturer to maintain account of banderols purchased and used. Rule 68 deals with the manner of affixing banderols. Every banderol shall be so affixed that the words and figures on the banderol specifying the maximum number of matches companyered by the banderol are legible. The box or booklet cannot be opened without tearing the banderol,. and where it is affixed to a box, the ends of the banderol are companyered by the factorys label. Rule 70 states that as soon as possible after matches are finished they shall be banderolled and enclosed in packets and presented to the officers of the factory for assessment. Rule 71 deals with the method of packing. Rule 226 sets out that the entry books, stock account and warehouse register should be maintained. Reference to these rules is necessary to understand, the requirements of the Act and the violations companymitted by the respondents. The companyplaint in the present appeals against the respondents was that the stock and accounts were examined and the banderols affixed to the unit box were also examined. The examination revealed that cut banderols have been affixed and full length torn banderols were affixed with a view to evade excise duty. Unbanderolled matches were also found in excess stock over and above the book value. The register was number companyrectly maintained. The companyplaint was that the respondents violated the provisions of the Rules. The respondents did number companyply with the Rules. The word act is defined in the General Clauses Act,1897. The definition is as follows act used with reference to an offence or a civil wrong, shall include a series of acts and words which refer to acts done extend also to illegal ommissions. The words anything done or ordered to be done under the Act in section 40 2 of the Act were therefore companytended by companynsel for the respondents to extent to illegal ommissions and infraction of the requirements of the statute. In Pritam Singh v. State of Haryana 1 a Police Officer was Prosecuted for offences under section 29 of the Police Act. Section 42 of the Police, Act enacted that prosecution against any person which may be lawfully brought for anything done or intended to be done under the provisions of the Act shall be companymenced within three months after the act companyplained 1 1971 1 S.C.C. 653. of shall have been companymitted and number otherwise. The appellant in that case was found absent from duty from the Police Line at the time of roll-call. Prosecution of the appellant in Pritam Singhs case supra was initiated for number-compliance with the requirements to be on duty as required under the Police Act. This was held to be prosecution for something done under the provisions of the Act. This Court in Maulud Ahmad v. State of Uttar Pradesh 1 companysidered the case of prosecution of a head Constable. Section 42 of the Police Act was invoked as a bar to the prosecution in Maulud Ahmads 1 case supra the question was whether Chauhan abetted Maulud Ahmad in making false entries in the General Diary of Police Station Mailani and whether Maulud Ahmad made false entries in the General Diary of Police Station Mailani with the intention to save or knowing it likely that he would thereby save the offenders from legal punishment. The Court in Maulud Ahmads 1 case supra said that if the appellant did number discharge his duty in keeping a regular diary he has companymitted an offence under section 29 of the Act. Sitaram v. State of Madhya Pradesh 2 this Court examined a criminal trial in respect of the offence of filing false returns of sales tax. Section 26 of the C.P. and Berar Sales Tax Act, 1947 provided inter alia, that numberprosecution shall be instituted against any person in respect of anything done or intended to be done under the Act unless the prosecution has been instituted within three months of the date of the act companyplained of. It was companytended that the words any person showed the intention of the legislature to give protection to Government servants in regard to prosecution and number to persons other than Government servants. This Court did number accept that companytention, because there were numberwords to restrict the meaning of the words any person. Furthermore this Court held that when the appellant in that case submitted returns he did so under the provisions of the Act. When he produced the accounts he did so under the provisions of the Act. The filing of the returns and the production of accounts companyld number be said to be outside the provisions of the Act. These decisions in the light of the definition of the words act in the General Clauses Act establish that number- companypliance with the provisions of the statute by omitting to do what the act enjoins will be anything done or ordered to be done under the Act. The companyplaint against the respondents was that they wanted to evade payment of duty. Evasion was by using, and affixing cut and torn banderols. Books of account were number companyrectly maintained. There was shortage of banderol in stock. Unbanderolled 1 1963 Supp. 2 S.C.R. 38. 2 1962 Supp. 3 S.C.R. 21. matches were found. These are all infraction of the provisions in respect of things done or ordered to be done under the Act. In Amalgameted Electricity Co. v. Municipal Committee, Ajmer 1 the meaning of omission of a statutory duty was explained by this Court. Hegde, J. speaking for the Court said The omission in question must have a positive companytent in it. In other words, the number-discharge of that duty must amount to an illegality. The positive aspect of omission in the present case is evasion of payment of duty. The provisions of the Act require proper affixing of banderols. Cut or torn banderols were used. Unbanderolled match boxes were found. These provisions about use of banderols are for companylection and payment of excise duty.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 46, of 1969. Appeal under Article 134 1 c of the Constitution of India from the judgment and order dated December 10, 1968, of the Patna High Court in Criminal Appeal No. 116 of 1966. M. Mishra and S. S. Jauhar, for the appellant. P. Jha, for the respondent. The Judgment of the Court was delivered by Khanna, J. The short question which arises for determination in this appeal on certificate granted by Patna High Court is whether the appellant who was less than 21 years of age on the date of his companyviction for an offence under section 326 read with section 149 Indian Penal Code, can claim the, benefit of section 6, of the Probation of Offenders Act,, 1958 Act No. 20 of 1958 . , The appellant and five others, who belong to village Mandil in District Gaya, were tried in the companyrt of Additional Sessions Judge Gaya for offences under sections 147, 148, 307, 323 and 307 read with section 149 Indian Penal Code and section 25 of the Arms Act. Jugal Kishore appellant was companyvicted under section 326 read with section 149 and section 148 Indian Penal Code and was sentenced to undergo rigorous imprisonment for a period of five years on the first companynt and rigorous imprisonment for a, period of two years on the second companynt. The sentences awarded to the appellant were ordered to run companycurrently. The other five accused were also companyvicted for various offences and were sentenced on those companynts. On appeal the Patna High Court as per judgment dated January 22, 1968 acquitted two of the accused. The companyviction of the appellant for offences under section 326 read with section 149 and 148 Indian Penal Code was maintained. The sentence of the appellant for the offence under section 326 read with section 149 Indian Penal Code was reduced from five years to three years. The sentence for the offence under section 148 Indian Penal Code was, however, maintained. The companyviction of the other three accused was maintained for some of the offences, and they were awarded sentences of imprisonment on that companynt. After the pro- numberncement of the judgment by the High Court, an application was made on behalf of the appellant that his case be deal with under the Probation of Offenders Act on the ground that he wag below 21 years of age at the time of his companyviction by the trial companyrt. This application was rejected by the High Court as per ,order dated December 12, 1968 on the ground that the offence for which the appellant had been companyvicted was punishable with imprisonment for life, and as such, the provisions of Probation of Offenders Act companyld numberbe invoked in his case. On prayer made by the appellant, the High Court certified the case to be fit for appeal to the Supreme Court as it involved the question relating to the applicability of the Probation of Offenders Act. The appellant and his companypanions were tried on the allegation that on October 14, 1964 at about 10 a.m., while Madho Saran was getting his field bearing No. 1678 ploughed by his ploughman Rakshya Mahto, the appellant and Raghu accused went there and questioned Madho Saran for cutting the ridge between field No. 1678 and 1719. Field No. 1719 belonged to the appellant. Madho Saran went to his house and narrated the incident to his brother Sadho Saran. Madho Saran and Sadho Saran along with others then came out of their house and while they were near a barrage, they met the accused who were accompanied by about 30 person of their village. One of the accused, namely, Hira Lal, who was armed with a gun, fired a shot as a result of which Sadho Saran was hit on his head. Sadho Saran fell down, whereafter 87 7 the other accused, including the appellant who was armed with a garasa, caused further injuries to Sadho Saran and his companypanions with sharp-edged and blunt weapons. The injured were thereafter taken to Jehanabad Hospital. On receipt of intimation from the doctor incharge of the hospital, a police Sub Inspector went to the hospital and recorded the statement of Madho Saran, Nand Kishore, one of the accused, also lodged a report at the police station. The question with which we are companycerned in this appeal, as mentioned earlier, is whether the appellant can claim the benefit of the Probation of Offenders Act. The appellant gave. his age to be 19 years in his statement under Section 342 of the Code of Criminal Procedure, and the case has been argued before us on the assumption that the appellant was less than 21 years of age at the time of his companyviction by the Additional Sessions Judge. The main offence for which the appellant has been companyvicted is section 326 read with section 149 Indian Penal Code. Section 326 deals with the offence of voluntarily causing grievous hurt by dangerous weapons or means and the punishment prescribed for the offence is imprisonment for life, or imprisonment of either description for a term which may extend to ten years. The companyvicted person shall also be liable to pay fine. According to section 149 of the Code, if an offence is companymitted by any member of an unlawful assembly in prosecution of the companymon object of that assembly, or such as the members of that assembly knew to be likely to be companymitted in prosecution of that object, every person who, at the time of the companymitting of that offence, is a member of the same assembly, is guilty of that offence. It is., therefore, manifest that the appellant on being companyvicted for the offence under section 326 read with section 149 Indian Penal Code was liable to be punished for imprisonment for life or with imprisonment of either description for a term which may extend to ten years and was also liable to pay fine. The Probation of Offenders Act was enacted in 1958 with a view to provide for the release of offenders of certain categories on probation or after due admonition and for matters companynected therewith. The object of the Act is to prevent the companyversion of youthful offenders into obdurate criminals as a result of their association with hardened criminals of mature age in case the youthful offenders are sentenced to undergo imprisonment in jail. The above object is in companysonance with the present trend in the field of penology, according to which effort should be made to bring about companyrection and reformation of the individual offenders and number to resort to retributive justice. Modern criminal jurisprudence recognises that numberone is a born criminal and that good many crimes are the product of socioeconomic milieu. Although net much can be done for hardened criminals, companysiderable stress has been laid on bringing about reform of young offenders number guilty of very serious offences and of preventing their association with hardened criminals. The Act gives statutory recognition to the above objective. It is, therefore provided that youthful offenders should number be sent to jail, except in certain circumstances. Before, however, the benefit of the Act can be invoked, it has to be shown that the companyvicted person even though less than 21 years of age, is number guilty of an offence punishable with imprisonment for life. This is clear from the language of section 6 of the Act. Sub-section 1 of that section reads as under When any person under twenty-one years of age. is found guilty of having companymitted an offence punishable with imprisonment but number with imprisonment for life , the Court by which the per-son is found guilty shall number sentence him to imprisonment unless it is satisfied that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it would number be desirable to deal with him under section 3 or section 4, and if the Court passes any sentence of imprisonment on the offender, it shall record its reasons for doing so. Mr. Misra on behalf of the appellant has urged that as the offence under section 326 read with section 149 Indian Penal Code is punishable number only with imprisonment for life but also with imprisonment which may extend up to ten years, the benefit of section 6 of the Act can be invoked by the appellant. This companytention, in our opinion, is number well founded. Plain reading of section 6 makes it manifest that it deals with persons under twenty-one years of age who are found guilty of having companymitted an offence punishable with imprisonment but number with imprisonment for life. As imprisonment for life can also be awarded for the offence under section 326 read with section 149 Indian Penal Code, a person found guilty of such an offence would number be entitled to claim the benefit of section 6. To hold otherwise. would have the effect of ignoring the words but number with imprisonment for life and treating them to be otiose. Such a companystruction is plainly number permissible. We also cannot subscribe to the view that the offences excluded from the purview of the section are only those offences wherein punishment prescribed is imprisonment for life and number for a lesser term, for the language used in the section does number warrant such a view. On the companytrary, the ,Plain meaning of the section is that the section cannot be invoked by a person who is companyvicted for an offence punishable with imprisonment for life. The fact that imprisonment for a lesser term can also be awarded for the offence would number take it out of the category of offences punishable with imprisonment for life. The policy underlying the Act appears to be that it is only in cases of number very serious nature, viz., offences number punishable with imprisonment for life that the companyvicted person should have the benefit of provisions of the Act. Where, however, the offence for which a person has been companyvicted is of a serious nature punishable with imprisonment for life, the benefit of the Act would number be permissible in his case. Likewise, there are certain offences like those under the Prevention of Corruption Act wherein the companyvicted person cannot claim the protection of the Act. Section 18 of the Act expresser excludes such offences from the purview of the Act. In the case of Som Nath Puri v. State of Rajasthan 1 the appellant had been companyvicted for an offence under section 409 Indian Penal Code. Punishment for the offence under section 409 Indian Penal Code is the same as for the offence under section 326, namely, imprisonment for life, or imprisonment of either description for a term which may extend to ten years and the liability to pay fine. It was held by this Court that in such a case the provisions of section 4 of the Probation of Offenders Act cannot be invoked. It may be mentioned that section 4 of the, Pro- bation of Offenders Act also excludes from its operation persons companyvicted of offences punishable with imprisonment for life. In that companynection, the Court observed As the offence of criminal breach of trust under section 409, I.P.C. is punishable with imprisonment for life, the High Court, in our view, was right because the provisions of section 4 are only applicable to a case of a person found guilty of having companym itted an offence number punishable with death or imprisonment for life.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION C.A. Nos. 257 and 258 of 1969. Appeals by special leave from the judgment and order dated July 11, 1967 of the Allahabad High Court in Special Appeal Nos. 319 and 320 of 1962. Sen, P. L. Juneja, R. N. Sachthey and S. P. Nayar, for the appellant. D. Karkhanis, and A. G. Ratnaparkhi, for the respondents. The Judgment of the Court was delivered by Hegde, J. Aggrieved by the decision of the Allahabad High Court in Misc. Writ Petitions Nos. 1057 and 1059 of 1957, the Income-tax Officer, Gorakhpur has brought these appeals after obtaining special leave from this Court. For proper appreciation of the questions of law arising for decision in these appeals,, it is necessary to set out the material facts. The first respondent Ram Prasad was the Karta of a Hindu undivided family which carried on business in the name and style of Ram Nath Ram Prasad. Assessments were made on the family for income-tax for the assessment years 1944-45 to 1947-48 and for excess profits tax for the companyresponding chargeable accounting periods respectively ending on October 28, 1943, October 16, 1944, November 4, 1945 and March 31 1946. The income-tax assessments for the assessment year 1944-45 and the excess profits tax assessment for the companyresponding chargeable accounting period ending on October 28, 1943 were set aside by the Income-tax Appellate Tribunal with the direction that fresh orders of assessment be made in accordance with the directions given by the Tribunal. On September 25, 1951, under a scheme for voluntary disclosure, the first respondent disclosed by means of an application a sum of Rs. 2,08,450 and offered the same for taxation. On October 1, 1951, the Hindu undivided family disrupted and there was a companyplete partition, which was accepted by the department as of that date. Thereafter fresh assessments to income-tax were made for the assessment years 1944-45 to 1947-48 taking into companysideration 1045 the disclosures made by the first respondent. There is numberdispute about those assessments. Subsequently numberices were issued under s. 13 1 of the Excess Profits Tax Act, 1940 to be hereinafter referred to as the Act on February 14, 1957 for all the four chargeable accounting periods ending on October 25, 1943, October 16, 1944, November 4, 1945 and March 31, 1946 in the name of the first respondent. Immediately thereafter the first respondent filed two writ petitions before the Allahabad High Court challenging the validity of the numberices issued. After the institution of those writ petitions on April 8, 1958, the appellant issued three numberices to the respondent under s. 1,5 of the Act in respect of the chargeable accounting periods ending on October 14, 1944, November 4, 1945 and March 31, 1946. Thereafter the writ petitions filed by the first respondent were amended and the validity of those numberices was also challenged. The learned single judge who heard the writ petitions allowed the same holding that the appellant was number companypetent to take proceedings under the provisions of the Act in respect of Hindu undivided family which had been divided. Aggrieved by that decision, the appellant took up the matter in appeal to the Division Bench of the Allahabad High Court. The Division Bench upheld the decision of the learned single judge. Hence these appeals. Section 2 17 of the Act defines a person as including a Hindu undivided family. Section 4 is the charging section. It reads 4 1 Subject to the provisions of this Act, there shall, in respect of any business to which this Act applies, be charged, levied and paid on the amount by which the profits during any chargeable accounting period exceed the standard profits a tax in this Act referred to as excess profits tax which shall, in respect of any chargeable accounting period ending on or before the 31st day of March, 1941, be equal to fifty per cent of that excess and shall, in respect of any chargeable accounting period beginning after that date, be equal to such percentage of that excess as may be fixed by the annual Finance Act The other relevant provisions are ss. 13 and 14 which read 13 1 The Excess Profits Tax Officer may, for the purpose of this Act, require any person whom he believes to be engaged in any business to which this Act applies, or to have been so engaged during any chargeable accounting period, or to be otherwise liable to pay excess profits tax to furnish within such period, number being less than sixty days from the date of the 1046 numberice, as may be specified in the numberice, a return in the prescribed form and verified in the prescribed manner setting forth ,along with such other particulars as may be provided for in the numberice with respect to any chargeable accounting period specified in the numberice the profits of the business and the standard profits of the business as companyputed in accordance with the provisions of section 6 or the amount of deficiency available for relief under section 7 Provided that the Excess Profits Tax Officer may, in his discretion, extend the date for the delivery of the return. The Excess Profits Tax Officer may serve on any person upon whom a numberice has been served under sub-section 1 a numberice requiring him on a date to be therein specified to produce, cause to be produced, such accounts or document as the Excess Profits Tax Officer may require and may from time to time servo further numberices in like manner requiring the production of such further accounts or documents or other evid- ence as he may require Provided that the Excess Profits Tax Officer shall number require the production of any accounts relating to a period prior to the previous year as determined under section 2 of the Indian Income-tax Act, 1922, for the purpose of the income-tax assessment for the year ending on the 31st day of March, 1937. 14 1 The Excess Profits Tax Officer shall, by an order in writing after companysidering such evidence, if any, as he has required under section 13, assess to the best of his judgment the profits liable to excess profits tax and the amount of excess profits tax payable on the basis of such assessment, or if there is a deficiency of profits, the amount of that deficiency and the amount of excess profits tax, if any, repayable and shall furnish a companyy of such order to the person on whom the assessment has been made. Excess profits tax payable in respect of any chargeable accounting period shall be payable by the person carrying on the business in that period. Where two or more persons were carrying on the business jointly in the chargeable accounting period, the assessment shall be made upon them jointly and, in the case of a partnership, may be made in the 1047 chargeable accounting period, the assessment shall be made upon them jointly and, in the case of a partnership name. Where by virtue of the foregoing provisions. an assessment companyld, but for his death, have been made on any person either solely or jointly with any other person or persons, the assessment may be made on his legal representative either solely or jointly with that other person or persons, as the case may be. Section 21 of the Act attracts some of the provisions of the Indian Income-4ax Act, 1922 to proceedings under the Act. That section reads The provisions of sections 4A, 4B, 10, 13, 24B, 29, 36 to 44C inclusive 45 to 48 inclusive 49E, 49F, 50, 54, 61 to 63 inclusive 65 to 67A inclusive of the Indian Income-tax Act, 1922 shall apply with such modifications, if any, as may be pres- cribed as if the said provisions were pro- visions of this Act and referred to excess profits tax instead of to income-tax, and every officer exercising powers under the said provisions in regard to incometax may exercise the like powers under this Act in regard to excess profits tax in respect of cases assigned to him under sub-section 3 of section 3 as he exercises in relation to income-tax under the said Act Provided that references in the said provision, to the assessee shall be companystrued as references to a person to whose business this Act applies. There is numberprovision in the Act similar to s. 25-A of the Indian Income-tax Act, 1922. The learned Counsel for the appellant companytended that in the case of Excess Profits Tax, the tax is levied on the business and number on any individual and therefore what is relevant is the companytinuation of the business and number the companytinuity of the identity of the assessee. According to him if the business in question companytinues as in the case before us, then the fact that the identity of the person who is companytinuing the business has changed is number relevant. In support of this companytention he relied on the language of s. 4 of the Act. It will be numbericed that the proviso to that section refers to s. 4 3 of the Indian Income-tax Act, 1922 and the body of the section itself refers to the assessments in respect of any business to which the Act applies, to be charged, levied and paid on the amount by which the profits during any 1048 chargeable accounting period exceeds the standard profits. The word paid in the companytext can only refer to the person. That is a clear indication that the Act companytemplates assessment of the tax on a person though on the basis of the profits from a business. This companyclusion receives support from s. 5 of the, Act which states that the Act is to apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income-tax under the provisions of sub-cl. 1 , sub-cl. 2 of cl. b of sub-s. 1 of S. 4 of the Indian Income-tax Act, 1922 or of cl. c of that sub-section. No doubt the basis of the assessment is number the receipt of the profits but the accrual, whether it accrued to a resident or number- resident and whether the accrual was within or without British India in the same manner as under the Indian Income- tax Act, 1922. As observed by the High Court of Madras in Commissioner of Excess Profits Tax. Madras Jivraj Topun and Sons, Madras The point however is put beyond doubt by Sec- tion 14, sub-section 1 of the Act which provides for assessment of the tax after the return is submitted in pursuance of a numberice issued under Section 13 of the Act. It requires that the Excess Profits Tax Officer, after companypleting the assessment should furnish a companyy of such order that is the assessment order to the person on whom the assessment has been made, Sub-section 2 of that section imposes the liability to pay on the person carrying on the business in that period. Under sub-section 3 if the business is carried on jointly during the chargeable accounting period, the ,assessment should be made upon the persons jointly and in the case of a partnership it should be, in the name of partnership. Under Subsection 4 if a person companyld be assessed either solely or jointly with other person or persons, in case of his death, the assessment may be made on his legal representative either solely, or jointly with the other person or persons. The provisions of this section therefore place the matter beyond doubt that the assessment of the tax is on the person in the same manner as under the income-tax Act. No doubt under the Income-tax Act the companyputation of the tax is on the basis of the income derived by a person from various sources, while under the Excess Profits Tax Act it is on the profits of a business of the person. 1 20 I.T.R. 143. 1049 We are in agreement with these observations. Consequently we are unable to uphold the companytention that so long as the business companytinues, the change of the person who carries on the business is immaterial. Next Mr. B. Sen, learned Counsel for the appellant sought to seek assistance from s. 44 of the Indian Income-tax Act, 1922 which section is one of the sections mentioned in s. 21 of the Act. Section 44 of the Indian Income-tax Act, 1922 reads thus Where any business, profession or vocation carried on by a firm or association of persons has been discontinued, or where an association of persons is dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shall, in respect of the income, profits and gains of the firm or association, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and ill the provisions of Chapter IV shall, so far as may be, apply to any such assessment. This provision applies only to firms and association of persons. Hindu undivided family is neither a firm number an association of persons. It is a separate entity by itself. That is made clear by s. 3 of the Indian Income-tax Act, 1922 which classifies the assessees under the heads individuals, Hindu undivided families, companypanies, local authorities, firms and other associations of persons If Hindu undivided family is to be companysidered as an association of persons, there was numberpoint in making separate provision for the assessment of Hindu undivided families. This companyclusion is strengthened by S. 25-A of the Indian Income-tax Act, 1922 which provides for the assessment of Hindu undivided family after its partition. For whatever reason it may be, the legislature did number in- clude in s. 21 of the Act s. 25-A of the Indian Income-tax Act, 1922 number did it make any simiar provision in the Act.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION C.A. No. 342 of 1969. Appeal by certificate under Article 133 of the Constitution of India from the judgment and order dated February 16, 1966 of the Allahabad High Court in Misc. Case No. 434 of 1962. P. Maheshwari, for the appellant. A. Ramachandran, R. N. Sachthey and S. P. Nayar, for the respondent. The Judgment of the Court was delivered by Khanna, J. This appeal on certificate granted by the Allah, bad High Court is directed against the judgment of that companyrt 1079 whereby it answered the following two questions referred to it under section 66 1 of the Indian Income Tax Act, 1922 hereinafter referred to as the Act against the appellant and in favour of revenue Whether on the facts and on a true and proper interpretation of the agreement dated 31-7-1956, between the British India Corporation and the appellant companypany, the letters of Sri Kailash Nath Agarwal, the letters of Managing Directors, the sum of Rs. 43,333/ retained by the British India Corporation and adjusted by it to the credit of Sharma Co. was the assessable income of the appellant companypany ? Whether on the facts and circumstances of the case, the sum of Rs. 43,333/- represented an expenditure under section 10 ? The matter relates to the assessment year 1956-57. The appellant is a private limited companypany and Kailash Nath Agarwal is one of its directors. As per agreement dated July 31, 1956 the appellant was appointed with effect from April 1, 1955 the sole selling agent of the Kanpur Cotton Mills for the sale of yarn and cloth manufactured by the said mills. The Kanpur Cotton Mills is owned by the British India Corporation hereinafter referred to as BIC. Prior to the appellants appointment Sharma Co., a partnership firm, was functioning as the sole selling agent of the Kanpur Cotton Mills. The amount due by Sharma Co. to the Kanpur Cotton Mills as on March 21, 1955 was Rs. 8,39,350/15/6 inclusive of interest. On March 23, 1955 a letter was addressed on behalf of Sharma Co. to the Managing Director of BIC stating that an agreement had been entered into with Kailash Nath Agarwal whereby Sharma Co. had agreed to give up the sole selling agency of the Kanpur Cotton Mills. The Managing Director of BIC was requested to appoint Kailash Nath Agarwal or any firm or companypany forced by him for this purpose as the sole selling agent in place of Sharma Co. Reference was also made in that letter to an agreement between Sharma Co. and Kailash Nath Agarwal in the following words As you will numberice from the agreement with Sri Kailash Nath Agarwal we are entitled to receive one seventh of the companymission due to the new selling agency or to a sum of Rs. 50,000/- per annum whichever is greater, till your dues with interest are fully liquidated. We do hereby authorise you to retain this amount thus becoming due to us out of the companymission payable to the agency and adjust the same to our firms account with the Corporation. 1080 On the same day, i.e. March 23, 1955 Kailash Nath Agarwal addressed a letter to the Managing Director of BIC informing him ,of the agreement with Sharma Co. and requesting for the grant of sole selling agency to the appellant. The letter companycluded as follows I hereby authorise you in case you are pleased to grant your sole selling agency to my said firm to retain one-seventh of our companymission for adjustment in the account of M s. Sharma Co. with minimum of Rs. 50,000/- per annum till your dues against them are cleared with interest. The Mananging Director of BIC later on that day, i.e. March 23, 1955 addressed a letter to Sharma Co. accepting its resignation from the sole selling agency of the Kanpur Cotton Mills and about the appointment of Kailash Nath Agarwal or his numberinee as the sole selling agent in succession to Sharma Co. In regard to the liquidation of dues from Sharma Co. the Managing Director of BIC wrote As agreed between Shri Kailash Nath Agarwal and yourselves we shall deduct one seventh of the companymission or Rs. 50,0001- whichever is greater out of the companymission earned by the new sole selling agents and credit the same to your account with us till our dues against you standing today at Rs. 8,39,350/15/6 are companypletely liquidated with interest thereon at 6. On July 31, 1956 on indenture was executed by BIC and the appellant relating to the apointment of the appellant as the sole selling agent of the Kanpur Cotton Mills for the sale of yarn, cloth and companyton manufactures with effect from April 1, 1955. In this indenture the appellant ratified the agreement entered into by Kailash Nath Agarwal with Sharma Co. on March 23, 1955 and authorised BIC to give effect to the said agreement generally and in particular to retain an amount equal to one-seventh of the trade discount of 1-3/4 due to the sole selling agents with a minimum of Rs. 50,0001 per annum so that the amount payable to the sole selling agents shall be the amount payable at the rate of II minus the aforesaid amount retained by the companyporation as payable to M s Sharma Co. Clauses 12 and 13 of the indenture were as under Clause 12 That in the event of the dissolution of M s Sharma Co. before the companyplete repayment of their liability the sole selling agents agree that the companyporation may companytinue to retain an amount equal to one-seventh of 1081 the trade discount of 1 3/4 or 50,000/- whichever is greater and adjust it towards such dues of M s Sharma Co. as may them be standing. Clause 13 That the authority given above to the companyporation to retain and adjust a part of the -trade discount towards the outstanding against M s Sharma Co. will number be revocable and will be binding on the sole selling agents, their successor, or assigns only so long as they act as the companyporations sole selling agents and will be deemed to be a companydition on which the sole selling agency has been granted to the agents. The agents will have numberclaim whatsoever to any such amounts retained out of their numbermal trade discount and adjusted in the account of M s Sharma Co. as if the amount so retained was number payable to them. During the year under reference, the companymission as per terms of the indenture dated July 31, 1956 payable to the appellant amounted to Rs. 2,06,283. Out of this amount, Rs. 43,333 were retained by BIC under the companytract for adjustment against the outstanding dues of Sharma Co. in accordance with the terms of the indenture. In its statement of account the appellant credited the full amount of companymission of Rs. 2,06,283 to its profit and loss account. The sum of Rs. 43,333 was, however, shown as a deduction therefrom. During, the, assessment proceedings, the Income Tax Officer disallowed the above deduction. The order of the Income Tax Officer in this respect was upheld by the Appellant Assistant Commissioner in appeal as well as by the Income Tax Appellate Tribunal in second appeal. On application filed by the appellant, the, Tribunal referred the questions reproduced earlier to the High Court. The High Court, as stated above, answered the two questions against the appellants. In appeal Mr. Maheshwari on behalf of the appellant has argued that the amount of Rs. 43,333 was a permissible deduction and the High Court was in error in deciding this matter against the appellant-. There is, in our opinion, numberforce in this companytention and we agree with Mr. Ram Chandran, learned companynsel for the respondent, that the judgment of the High Court should be, ,upheld. It would appear from the resume of facts given above that in March 1955 an amount of Rs. 8,39,350/15/6 was due to BIC from the firm Sharma Co. who was the previous sole selling agent of the Kanpur Cotton Mills. As a result of agreement between the appellant, BIC and Sharma Co. the appellant undertook to discharge the liability of Sharma Co. in lieu of being appointed the sole selling agent of the Kanpur Cotton Mills, in place of Sharma Co. It can, therefore, be said that 1082 the appellant got the sole selling agency of the Kanpur Cotton Mills in companysideration of its agreeing to pay Rs. 8,39,350-15-6 which was the amount due from Sharma Co. to BIC. It is number disputed by Mr. Maheshwari that if the amount of Rs. 8,39,350/ 1516 had been paid by the appellant in lump sum in companysideration of its being appointed the sole selling agent of the Kanpur Cotton Mills, the payment would have companystituted capital expenditure as it was an amount paid for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business. The fact that the amount was paid number in lump sum but was paid in instalments through deductions out of the companymission due to the appellant would number, in our opinion, make any difference. The answer to the question as to whether the money paid is a revenue-expenditure or capital expenditure depends number so much upon the fact as to whether the amount paid is large or small or whether it has been paid in lump sum or by instalments, as it does upon the purpose for which the payment has been made and expenditure incurred. It is the real nature and quality of the payment and number the quantum or the manner of the payment which would prove decisive. If the object of making the payment is to acquire a capital asset, the payment would partake of the character of a capital payment even though it is made number in lump sum but by instalments over a period of time. On the companytrary, payment made in the companyrse of and for the purpose of carrying on business or trading activity would be revenue expenditure even though the payment is of a large amount and has number to be made periodically. As observed by this Court, in the case of Assam Bengal Cement Co. Ltd. v. Commissioner of Income Tax, West Bengal 1 , if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made number for the purpose of bringing into existence any such asset of advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure. If any such .asset or advantage for the enduring benefit of the business is thus acquired or brought into existence, it would be immaterial whether the source of the payment was the capital or the income of the companycern or whether the payment was made once and for all or was made periodically. The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure. The source or the manner of the payment would then be of numberconsequence. We may also in this companynection refer to the following observations of this Court .in the case of P. H. Divecha Deceased and After Him His Legal Representatives and Another v. Commissioner of Income Tax, Bombay City 1 2 . 1 1955 27 I.T.R. 34 on p. 45 . 2 1963 48 I.T.R. 222. 1083 It may also be stated as a general rule that the fact that the amount involved was large or that it was periodic in character have numberdecisive bearing upon the matter. A payment may even be described as pay remuneration, etc., but that does number determine its quality, though the name by which it has been called may be relevant in determining its true nature, because this gives an indication of how the person who paid the money and the person who received it viewed it in the first instance. The periodicity of the payment does number make the payment a recurring income because periodicity may be the result of companyvenience and number necessarily the result of the establishment of a source expected to be produ ctive over a certain period. These general principles have been settled firmly by this companyrt in a large number of cases. Although the above observations were made in, the companytext of periodic, receipts, they have a direct bearing even on cases relating to periodic payments. Mr. Maheshwari has referred to clause 13 of the indenture reproduced above and has companytended that the appellant companyld make numberclaim to the amount of Rs. 43,3.33 which had been retained by BIC, This fact in our opinion would make numbermaterial difference so far as the true nature of that amount was companycerned, The amount was deducted by BIC in pursuance of the agreement entered into by the appellant with BIC and Sharma Co., according to which the appellant had to pay that amount in the form of deduction out of its companymission in companysideration of being appointed the sole selling agent of the Kanpur Cotton Mills. The present is a case relating to the application of income to discharge a liability incurred number in the companyrse of running the business but a liability undertaken for the purpose of acquiring the sole selling agency right which was indisputably an asset of capital nature.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 26 and 162 of 1969. Appeals by certificates from the judgment and order dated October 13, 14 and 16, 1967 of the Bombay High Court in Income-tax Reference No. 98 of 1962. T. Desai, R. J. Kolah, D. H. Dwarkadas, M. L. Bhakta, K. Verma, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellants in C.A. No. 26 of 1969 and respondent in C.A. No. 162/69. 1086 Sen, J. Ramamurthi, B. D. Sharma, R. N. Sachthey and S. P. Nayar, for the respondent in C.A. No. 26/69 and appellant in C.A. No. 162 of 1969. The Judgment of the Court was delivered by Jaganmohan Reddy, J. These two appeals are by certificate against the judgment of the High Court of Bombay answering four out of the five questions referred to it in favour of the assessee and one question in favour of the revenue. A partnership firm hereinafter referred to as the firm companyprising of some of the members of the Sassoon family was carrying on business under the name and style of E. D. Sassoon Co. for a number of years prior to 1920 at Bombay, Calcutta, Karachi, Hongkong, Shanghai, London, Manchester, Basra and the Persian Gulf. The business which it was carrying on was that of the bankers, companymission agent, agents of joint stock companypanies, dealers in shares and securities, foreign exchange etc. In the accounting year 1919 the firm incurred net loss of Rs. 12,37,41312-2 but in 1920 it seems to have made large profits mostly in London Exchange Account. It however claimed depreciation in shares and securities amounting to Rs. 9,26,730-5-8 shown under the head depreciation in shares and securities. On 8th September 1920 and 4th December 1920 two companypanies were incorporated in Bombay the former was known as the Bombay Trust Corporation Ltd. and the latter as E. D. Sassoon Co. Ltd. hereinafter called the assessee companypany . The Bombay Trust Corporation carried on business in Bombay which companyprised mainly the business of dealers in shares, securities and foreign exchange. This companypany B.T.C. had by the end of December 1920 investments in shares and securities to the extent of Rs. 3,23,78,494/-. By the end of 1921 investments in shares and securities had risen to Rs. 4,31,32,212/- and by the end of December 1922 these investments had risen to Rs, 10,43,78,511/-. Though these facts have been given in the statement of the case, as we shall presently show, they are number germane for the deter- mination of the questions before us. The assessee companypany was incorporated with several objects one of which was To acquire and take over as a going companycern the business number carried on at Bombay, Calcutta, Karachi, Hongkong, Shanghai, London, Manchester, Basra and Bagdad and all or any of the assets and liabilities of the proprietors of that business in companynection therewith, and with a view thereto, enter into the Agreement referred 1087 to in clause 4 of the Companys Articles of Association and to carry the same into effect with or without modification. Clause 4 of the articles of association of the companypany provided that the assessee companypany shall forthwith enter into the agreement mentioned in cl, 3 of the, Memorandum of Association with such, modifications, if any as the directors shall approve. On June 30, 1961 the agreement referred to was finally executed by the assessee companypany. The said agreement provided inter alia for purchase of the business of the said firm and its assets including shares, and debentures for valuable companysideration therein set out at the market price prevailing on 31st December 1920 which purchase was to be companypleted on or before that date. It appears that pursuant to the said agreement the companypany took over the business of the said firm and also purchased shares and securities worth Rs. 1,93,79,521-3-1 at market value as on 31st December 1920. It further purchased between 1st January 1921 to 31st January 1921 from the market further shares and securities worth Rs. 4,28,05,627 in the ordinary companyrse of its business. According to the Income-tax Officer in the accounting year 1921 there was numberdealing in shares and securities. At the end of the year 1921 as was done by the predecessor firm in the year 1920 the assessee companypany valued the securities and shares at the prevailing market rates which showed an appreciation of Rs. 9,26,713 on its valuation at the market rate. The appreciation of Rs. 9,26,730-5-8 was however number taxed because it is alleged that the assessee companypany had companytended that this appreciation should be delated from the companyputation of income. At the relevant time during the companyrse of the assessments the assessee companypanys accounts were examined by the examiner of accounts who made the following numbere on 12th October, 1922-- With regard to the second item it would be seen from the last years B form put up herewith with the companypany is a habitual dealer of shares has set off against profits of 1920 the loss of shares and securities depre- ciation . Hence appreciation of Rs. 9,27,708- 67 will have to be taxed this year. On the above report the Income-tax Officer endorsed on the 23rd December, 1922 as follows - NOTE -Shares and securities of Rs. 6,55,895/and Rs. 3,28,112/- book entry securities being valued at the end of the year and appreciation or depreciation brought into account. These securities are being taken over by the new companypany. B.T.C. Ltd. Bombay shows 1088 this on the instructions from the House, only and these items may therefore be disregarded for the income-tax purposes. It may be mentioned that the firm was being assessed for the year 1921-22 under the Income-tax Act 1918 on the income of the, ,accounting year 1921 and for the assessment years 1922-23 to 1948-49 the assessee companypany was being assessed under the Act of 1922. In the year of assessment 1949-50 the assessee companypany discontinued its business and claimed exemption on Rs. 33,40,057 under S. 25 3 of the Act. This claim was rejected by the Income-tax Officer on the ground 1 that in the year 1921 the, assessee claimed and obtained a deduction in respect of appreciation in shares and securities amounting to Rs. 9,26,708/- and 2 it had discontinued one of the businesses which the firm was doing namely dealing in stocks and shares. The assessee companypany appealed and the Appellate Assistant Commissioner held that on the evidence it was clear that the business which was discontinued in the year of assessment was number charged to tax under the Act of 1918 on the income from share dealings either for the accounting years 1918 or 1919, 1920 ,or for the accounting year 1921. As the assessment to tax on the share dealings was a basic requirement for exemption under S. 25 3 and that number having been established the question of granting any relief under the said provision did number arise. The Tribunal in appeal though it held that the firm was assessed to tax under the Act of 1918 nevertheless negatived the relief on the ground that the assessee companypany did number intend to do the business of dealing in securities acquired from the old firm. On an application by the assessee companypany for reference under s. 66 1 the following five questions were referred to the High Court - WHETHER on the facts and in the circums- tances of the case the assessee. companypany is entitled to claim exemption under Section 25 3 of the Act? WHETHER on the facts and in the circums- tances of the case the loss suffered on the sale of property in Shanghai was allowable as a revenue deduction out of profits of the year? WHETHER on the facts and in the circums- tances of the case the assessee companypany is en- titled to deduct Rs. 3,70,943/- the amount transferred to the Superannuation Fund against income of the year? WHETHER on the facts and in the circums- tances of the case the assessee companypany is en- 1089 titled to claim a sum of Rs. 2,92,672/- trans- ferred after the liquidation of the companypany as against the profits of the companypany ? W14ETHER on the facts and in the circumstances of the case the assessee companypany is entitled to set off the loss of Rs. 3,28,825/- suffered in 1948 as against profit of 1949-50 ? Except for the second question, the High Court answered the other four questions against the revenue, the appellant in Civil Appeal No. 162 NT of 1969. On the second question its answer was in favour of the revenue and against the assessee companypany in respect of which it has filed Civil Appeal No. 26 of 1969. On behalf of the revenue it is submitted that question No. 1 is the crucial question in that the determination of what is meant by discontinuance of business, profession or vocation, for purposes of s. 25 3 would also furnish the answers to the other questions in the appeal. No arguments were addressed to us on those questions. Sub-s. 3 of s. 25 under which the relief is being claimed is, as follows - Where any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income-tax Act, 1918 VII of 1918 , is discontinued, then, unless there has been a succession by virtue of which the provisions of sub-section 4 have been rendered applicable numbertax shall be payable in respect of the income, profits and gains of the period between the end of the previous year and the date of such discontinuance, and the assessee may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference. This provision has been enacted to give relief to a tax payer upon whom extra burden had been imposed due to a change in the basis of assessment as a result of the Act of 1922. Under the 1918 Act the tax liability was imposed on the income accruing or arising in the year of assessment while under the 1922 Act the liability was in respect of income accruing or arising in the 1090 previous year. Thus when the Act came into force in 1922 it entailed two assessments in respect of the income of the same year, that is, the income of the, year 1921-22 which had been assessed during the currency of that year under the 1918 Act was subjected to tax once again under the Act as the income of the previous year for the assessment year 1922-23. In view of this hardship, sub-s. 3 provided that in the case of discontinuance of any business, profession or vocation which was at any time charged under the 1918 Act- numbertax is payable in respect of the period between the end of the previous year and the date of discontinuance. An assessee to obtain relief under the above sub-section has to satisfy three companyditions. Firstly, that the business, profession ,or vocation must be one on which tax was at any time charged under the 1918 Act. Secondly, the case must be one where there has number been a succession after the 1st April, 1939 attracting the application of sub-s. 4 . Thirdly, the business must be discontinued, such discontinuance amounting to a companyplete cessation of business and number merely a succession or change of owner-ship. In the case of Commissioner of Income-tax, Bombay v. P.E. Polson 1 which was also referred to by Patanjali Sastri, J. in Executors of Estate of Dubash v. Commissioner of Income-tax 2 the Privy Council has pointed out that the purpose and ,effect of sub-section 3 was clearly to give relief to a tax payer who but for it would in the aggregate be charged with tax once in respect of every years income and twice in respect of one years income. There is numberdispute in this case that the, assessee companypany had discontinued its business from the 28th December 1948 when it went into liquidation. The only dispute is, whether the assessee companypany carried on the business of the firm which was assessed to tax under the 1918 Act and whether the firm was charged to tax under the 1918 Act. It may be mentioned that in sub-s. 3 there is a clear reference to the business and number to the assessee and therefore that sub- section applies even if the person claiming the relief was number himself charged under the 1918 Act but his predecessor- in-interest was so charged. It is companytended on behalf of the Revenue that the assessee companypany did number carry on the same business as that carried on by the firm in that the business in dealing in shares and stocks which the firm was carrying on was number carried on by the companypany which merely held those shares as investment and did number deal in them. It has been numbericed earlier that the firm was carrying on several businesses one of which was dealing in shares, and stocks and when the assessee companypany took over the assets and liabilities of business, it is said relying on the observations of the Tribunal that all. those businesses except the business of dealing in shares and stocks was taken over and that the shares and stocks which it held 1 13 I.T.R. 384. 2 19 I.T.R. 182. 1091 were held for and on behalf of the B.T.C. It is accordingly companytended that the assessee companypany was number carrying on the same business. It may be mentioned that one of the principal objects of the assessee companypany as indicated in the memorandum of association was to acquire and take over as a going companycern the business carried on by the firm E. D. Sassoon Co. The assets of the firm were taken over even prior to the agreement which was entered into on the 30th June, 1921. The Income-tax Officer thought that the assessees treatment of its profit and loss arising out of the business of dealing in shares have number been uniform. He also companycluded that in respect of the successive years at least upto 1938 the department has been treating the transactions on its merits, but thereafter the assessee companypany was treated as a regular dealer in shares and security that. only a portion of the shares and security represent stock in trade that there was numberuniform valuation of the stocks and investments, that in the year 1921 the deletion of the item of appreciation of shares and security amounting to Rs. 9,76,708 which it was alleged was agreed to clearly on the assessees companytention that it was only an investor and that the business of dealing in shares and security of the assessee companypany had number in the aggregate been charged to income-tax in respect of every years income and twice in respect of one years income inasmuch as the number of assessments made on this business was far less than the number of assessment made during its life. That apart this business according to the Income-tax Officer was number in existence at all in 1921 as the assessee companypany was number dealing in shares and it was number at all charged to tax under the Act of 1918. The companyclusions of the Appellate Assistant Commissioner in respect of the accounting years 1918, 1919 and 1920 during which period the firm was in existence and during the year 1921, the assessee companypany was functioning are given as follows - 1918-There is numberevidence that any assessment was made on the firm and the appellant has failed to prove that any income of the firm was charged to tax. 1919-This was a year of huge loss and numbertax was charged. 1920-There was numberpositive. income from shares or share-dealings. It is also number necessary to companysider tax payments by the firm during these years because the entire stock-in-trade of the business in share-dealings and securities belonging to the firm was taken over by another Limited Company the B.T.C. Ltd., assessed separately and the appellant did number succeed to that business at all. 1092 1921-No income-tax was charged on the companypany at all there being a net loss of more than Rs. 12 lakhs. It may be, mentioned that the statement that numbertax was charged for the year 1918 is companytrary to the material on record number was the Assistant Appellate Commissioner justified in holding that the entire stock in trade of business in share dealings and security belonging to the firm was taken over by another limited companypany, the B.T.C. Limited because the Appellate Tribunal on both these points has number companyfirmed those findings. The Tribunal summarised its companyclusions as follows - For the assessment year 1918 E.D. Sassoon Co., a firm was assessed to tax under the Act of 1919 For the year 1919 as there was huge, loss numbertax was charged In 1919 however the said firm had included in the profit and loss account, profit and loss on securities and shares. For the year 1920 there was huge profit and the shares and securities were transferred to the assessee companypany at the then market value of the shares and securities Over Rs. 9,00,000/- of losses were claimed by the said firm as a result of revaluation and allowed by the Income-tax authorities in the assessment of the said firm for the year 1920 The said firm was being held by the Department to be a dealer in shares and securities and the profit was brought to tax. The applicant companypany neither intended originally to do the business, number took over the business of dealing in securities from the old firm. From the findings of the Tribunal given in ii , iii , iv and v , it is apparent that it did number accept the findings of the Appellate Assistant Commissioner that the tax was number charged under the Act of 1918 on the income from the dealings and shares for the accounting years 1919 and 1920. It numberetheless as numbericed earlier, affirmed the order of the tax authorities on the ground that the business the companypany took over from the firm, was number the same business, which the firm was doing at any rate, in the year in which the assessee companypany took it over inasmuch as the 1093 assessee companypany neither intended originally to do the business, number took- over the business of dealing in securities from the old firm. The only question is whether the Tribunal was justified in holding that the assessee companypany was number companytinuing the business which the firm was doing prior to the sale of its business to the assessee companypany. The companyclusions in item vii of the above summary seems to be somewhat companyflicting with those, in item iv , but this apparent companytradiction is sought to be reconciled by limiting the companyclusion in clause iv to only the transfer of shares and securities to the assessee companypany after which the assessee companypany did number intend to do any business of dealing in shares and stocks. But this attempt to reconcile and explain the aforesaid two findings is unconvincing for number only does the Tribunal number find that after- the transfer- of shares and stock, to the assessee companypany by the firm that it did number hold these shares and stocks but also it did number hold that the assessee was number dealing in the business of stocks and shares. On the other hand, the Appellate Assistant Commissioner companysidering the claim of loss in respect of Shanghai Property sold by the assessee companypany observed - Ever since the incorporation of the companypany on 4-12-1920 as a Private Limited Company and till it went into liquidation on 29-12-1948, the assessees business activities companysisted of v Dealings in Shares and Securities. The High Court has taken into companysideration the assessment Orders for the years 1921-22 and 1922-23 dated 10th Janu- ary, 1923 for the companyclusion that the assessee companypany was taxed on profits on dealings in shares and stocks in respect of those years which in its view showed beyond doubt that the companypany was trading in shares and securities for the year 1921 immediately after it took over from the firm. Even otherwise also there is sufficient material on the record to hold that the entire business of the firm which included dealing in shares and stocks was taken over by the assessee companypany as a going companycern that large holdings of stocks and shares were transferred to the assessee companypany and that there is numberevidence to show that for the years 1920-21, 1921-22 and also for subsequent years, the assessee companypany was number dealing in shares. On the other hand, the Statement of the case clearly discloses is stated earlier that the assessee companypany purchased in the market during the period 1st January, 1921 and 31st December 1921 shares and stocks worth Rs. 4,28,05,627/in the ordinary companyrse of its business. The logical inference 1094 which arises from the above circumstances is that the assessee companypany was carrying on the same business as that of the firm including dealing in shares and stocks. There is also numbermaterial on record which would justify the Income-tax Authorities or the Tribunal in companying to the companyclusion that the shares and stocks which were transferred to the assessees companypany were only intended to be held as investments. It was again companytended on behalf of the revenue that the re- companyds of assessments for the accounting year 1921 number only showed that the appreciation in shares and stocks of Rs. 9,76,708/- was excluded but income from dividend and securities amounting to Rs. 12,85,408/- was number taken into account, and was assessed in the hands of B.T.C. Limited. This is based on the order of the Income-tax Officer numberwithstanding the fact that the examiner of accounts had pointed out that the companypany is habitual dealer in ,,hares and stocks and that the appreciation will have to be taxed. On behalf of the assessee it is companytended that the question pertaining to this aspect was sought to be raised in the application under s. 66 1 and when it was number referred an application was made before the High Court for framing a question dealing with this aspect. The High Court, however, in the view it took, did number think- that that question need be framed. There is numberdoubt that the Income-tax Officer had omitted for some reason to include Rs. 9,76,708/- being the appreciation of shares and stocks for the accounting year 1921 for which the assessment year is 1922-23. but that is number to say that the assessee companypany did number deal in shares and stocks in that year, number is there any basis for the Income-tax Officer and, the Appellate Assistant Commissioner in holding that B.T.C. Ltd. took over the share holding from the firm and number the assessee companypany. The Tribunal on the other hand held that the shares were transferred to the assessee companypany. There is numbermention in its order that these shares were transferred to B.T.C. and number to the assessee companypany. The shares and securities were only transferred to the B.T.C. Ltd. in 1922. In any case, irrespective of the question whether the assessee companypany was dealing in shares after it had taken over the business from the firm, it is clear that the assessee companypany was carrying on several other businesses which it had taken over from the firm as going companycern. Even where one or two businesses activities are discontinued after the assesses companypany took over, numberetheless it would number justify us in holding that the business of the firm which was taken over has been discontinued, because under s. 25 3 there is numberrestriction to the applicability of the exemption only to income on which the tax was payable under any particular head. This is what was held by this Court in Commissioner of Income- 1095 tax, Bombay City-1 v. Chugandas Co. 1 Shah, J., after numbericing that what is to be regarded as income, profits and gains of business, profession or vocation within the meaning of section 25 3 for which exemption may be obtained on discontinuance had given rise to difficulties, observed at page 22 -- Now clause 3 of section 25 expressly provides that income of a business, profession or vocation which was charged at any time under Act 7 of 1918 to tax is. on discontinuance of that business, profession or vocation, exempt from liability to tax under Act II of 1922 for the period between the end of the previous year and the date of such discontinuance When, therefore, section 25 3 enacts that tax was charged at any time on any business, it is intended that the tax was at any time charged on the owner of any business. If that companydition be fulfiled in respect of the income of the business, under the Act of 1918, the owner or his successor-in-interest qua the business, will be entitled to get the benefit of the exemption under it if the business is discontinued. The section in terms refers to tax charged on any business, i.e tax charged on. any person in respect of income earned by carrying on the business, Undoubtedly, it is number all income carried by a person who companyducted any business, which is exem pt under sub-section 3 of section 25 number-business income will certainly number qualify for the privilege. But there is numberreason to restrict the companydition of the applicability of the exemption only to income on which the tax was payable under the head profit and gains of business, profession or vocation. The legislature has made numbersuch express reservation and there is numberwarrant for reading into subsection 3 it may be numbericed does number refer to chargeability of income to tax under a particular head as a companydition of obtaining the benefit of the exemption. . . . . But the exemption under section 25 3 is general, it is number restricted to income chargeable under section 10 of the Act. This case was referred to and followed in the case of O. R M. SP. SV. Firm v. Commissioner of Income-tax, Madras 2 . It appears to us that in any view of the matter the assessee companypany was entitled to relief under section 25 3 , as such, the judgement of the High Court has to be companyfirmed. The learned 1 55 I.T.R. 22. 2 63 I.T.R. 404.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION. C. A. No. 1946 of 1968. Appeal by special leave from the judgment and ordered dated September 29,1967 of the Delhi High Court in 1. T. Reference No. 46-D of 1962. K. Sen, H. K. Puri and S. K. Dhingra, for the appellant. N. Sinha Solicitor General of India, B. D. Sharma and N. Sachthey for the respondent. Tile Judgment of the Court was delivered by Jaganmohan Reddy, J. The assessee and his wife owned a large number of shares in a private limited companypany engaged in the business of running hotels. By virtue of Art. 109 of the Articles of Association of the said companypany, the assessed became the first Managing Direction on terms companyditions agreed to and embodied in an agreement dated November 20,1955 between himself and the companypany. Under the said agreement, the assessee was to receive Rs. 2,000/- per month, a fixed sum of Rs. 500/p.m. as car allowance, 10 per cent of gross profits of the companypany and he and his wife were entitled to free board and lodging in the hotel. For the assessment year 1956-57 for which the accounting year is the year ending 30th September 1955, the assesses was assessed in respect of Rs. 53,913/- payable to him as 10 of the gross profits of the companypany which he gave up soon after the accounts were finalised but before they were passed by the general meeting of the shareholders. The above amount was given up by him because the companypany would number be making net profits if the stipulated companymission was paid to him. The assessee claimed that the amount given up by him was number liable to be included in his total income because the amount had number accrued to him at all, at ,my rate, in the accounting year ended 31st March 1956 and that even assuming that it had accrued in the account year ended 31st March 1956, it is number taxable under s. 7 or s. 10 of the Indian Income-tax Act, 1922 hereinafter called the Act . The Income-tax Officer, the Appellate Assistant Commissioner, the Tribunal and on a reference under s. 66 1 the High Court have all held that the 10 companymission on gross profits amounting to Rs. 53,913/- was taxable as salary under s. 7 of the Act and that the income had accrued to the assessee during the previous year. Against the judgment of the High Court, this appeal is by special leave. The questions of law which were referred to the High Court under s. 66 1 of the Act are as follows - Whether the sum of Rs. 53,913/- was a revenue receipt of the assessee of the previous year ? Whether the amount is chargeable under s. 7 or s. 10 of the Income-tax Act ? If the amount is chargeable under section 10, is the assessee entitled to a deduction of. Rs. 53,913/- tinder s.10 1 or s. 10 2 The High Court answered the first question in the affirmative and in favour of the revenue, and on the second question it was of the view that the amount payable as companymission was chargeable under S. 7 as salary and number under S. 10 of the Act. On this view, it did number think it necessary to answer the third question. When the matter came up earlier, this Court on November 9, 1971 companysidered it necessary to call for a further statement of the case from the Tribunal on the third question on the basis of the materials before it and having regard to the decision of Morvi Industries Ltd. v. Commissioner of Income- tax 1 . The Tribunal in its supplementary statement of case has answered the question against the assessee and in favour of the Department in holding that the assessee is number entitled to a deduction of the, sum of Rs. 53,913/- either under s.10 1 or 10 2 of the Act. It is number disputed that the companymission payable to him would be a revenue receipt number is it disputed that if it is chargeable under s. 7 numberother question would arise having regard to the finding based on the decision in Morvi Industries case supra that the amount of Rs. 53,913/- had accrued to the assessee in the year of account. It is therefore necessary for us to companysider whether the 10 per cent gross profits payable to the assessee under the terms of the agreement appointing him as the Managing Director is liable to be assessed as salary or under the head income from business. It may be mentioned that salary under s. 7 of the Act includes also companymission, wages, perquisites etc. On behalf of the assessee, it was companytended that in order to assess the income as salary it must be held that there was a relationship of master and servant between the companypany and the assessee. For such a relationship to exist, it must be shown that the employee must be subject to the supervision and companytrol of the employer in respect of the work that the employee has to do. Where, however, there is numbersuch supervision or companytrol it will be a relationship of principal and agent or an independent companytractor. Applying these tests, it is submitted that the appointment of the assessee as a Managing Director is number that of a servant but as an agent of the companypany and accordingly the companymission payable to him is income from business and number salary. In support of this companytention, reference has been made to Halsburys Laws of England, Bowstead on Agency and treatises on Company Law by Palmer, Gower, Penington and Buckley. There is numberdoubt that for ascertaining whether a person is a servant or an agent, a rough and ready test is, whether, under the terms of his employment, the employer exercises a supervisory companytrol in respect of the work entrusted to him. A servant acts under the direct companytrol and supervision of his master. An agent, 1 82 I.T.R.835 S.C. on the other hand, in the exercise of his work is number subject to the direct companytrol or supervision of the principal, though he is bound to exercise his authority in accordance with all lawful orders and instructions which may be given to him from time, to time by his principal. But this test is number universal in its application and does number determine in every case, having regard to the nature of employment, that he is a servant. A doctor may be employed as a medical officer and though numbercontrol is exercised over him in respect of the manner he should do the work number in respect of the day to day work, he is required to do, he may numberetheless be a servant if his employment creates a relationship of master and servant. Similar is the case of a chauffeur who is employed to drive the car for his employer. If he is to take the employer or any other person at his request from place A to place B the employer does number supervise the manner in which he drives between those places. Such examples can be multiplied. A person who is engaged to manage a business may be a servant or an agent according to the nature of his service and the authority of his employment. Generally it may be possible to say that the greater the amount of direct companytrol over the person em- ployed, the stronger the companyclusion in favour of his being a servant. Similarly the greater the degree of independence the greater ,the possibility of the services rendered being in the nature of principal and agent. It is number possible to lay down any precise rule of law to distinguish one kind of employment from the other. The nature of the particular business and the nature of the duties of the employee will require to be companysidered in each case in order to arrive at a companyclusion as to whether the person employed is a servant or an agent. In each case the principle for ascertainment remains the same. Though an agent as such is number a servant, a servant is gene- rally for some purposes his master, implied agent, the extent of the agency depending upon the duties or position of the servant. It is again true that. a director of a companypany is number a servant but an agent inasmuch as the companypany cannot act in its own person but has only to act through directors who qua the companypany have the relationship of an agent to its capacity. Managing Director may have a dual capacity. He may both be a Director as well as employee. It is therefore evident that in the capacity of a managing- director he may be regarded as having number only the capacity as persona of a director but also has the persona of an employee. or an agent depending upon the nature of his work and the terms of his employment. Where he is so employed, the relationship between him as the Managing Director and the Company may be similar to a person who is employed as a servant or an agent for the term employed is facile enough to companyer any of these relationships. The nature of his employment may be determined by the articles of association of a companypany and or the agreement if any, under which a companytractual relationship between the Director and the companypany has been brought about, whereunder the Director is companystituted an employee of the companypany, if such be the ,case, his remuneration will be assessable as salary under s. 7. In other words, whether or number a Managing Director is a servant of the companypany apart from his being a Director can only be determined by the articles of association and the terms of his employment. A similar view has been expressed by the Scottish Court of Session in Anderson v. James Sutherland Peterhead Limited 1 where Lord Normand at p.218 said the managing director has two functions and capacities. Qua managing director he is a party to a companytract with the companypany, and this companytract is a companytract of employment more specifically I am of opinion that it is a companytract of service and number a companytract for service. A number of cases have been referred before us but the companyclusion in each of the decisions turned on the particular nature of employment and the facts disclosed therein. In each of these decisions the companytext played a vital part in the companyclusions arrived ,at. In Commissioner of Income-tax Manmohan Das 2 this Court had occasion to companysider the case of employment by a bank of a treasurer for its branches, sub-agencies and pay offices where he had to perform the duties, liabilities and responsibilities which by custom or companytract usually devolved upon a treasurer as well as those specified in the agreement. The treasurer had to provide the staff for the cash section of the bank he had power to suspend, transfer or dismiss any member of the staff and to appoint any other person in his place. He was responsible for all the acts of the staff so appointed which resulted in loss or damage to the bank and was responsible for the protection of the property of the bank and for the receipt of any bad money, or base money etc., was requested to transmit from one place to another, under guard provided by the bank, moneys, documents and properties of the bank. It was held that though the office of the treasurer was created by the agreement and that he held office under it, that was number decisive of the question whether the remuneration earned by him was as a servant of the bank. Receipt of remuneration for holding an office did number necessarily give rise to the relationship of master and servant between the holder of the office and the person who paid the remuneration. It was held that the treasurer was number a servant of the bank and the remuneration received by him was number salary. Referring to. the observations of 1 1941 S.C. 203 at 218. 2 59 I.T.R. 699. Bhagwati, J. in Dharangadhra Chemical Works Ltd. v. state of Saurashtra 1 , Shah, J. observed at p. 707 that the companyrect method of approach would be to companysider whether having regard to the nature of the work, there was due companytrol and supervision by the employer. In Piyare Lal Adishwar Lal v. Commr. of Income-tax 2 , Kapur, J. said at p. 24 that It is difficult to lay down any one test to distinguish tile relationship of master and servant from that of an employer and independent companytractor. In many cases the test laid down is that in the case of master and servant, the master can order or require what is to be done and how it is to be done but in the case of an independent companytractor an employer can only say what is to be done but number how it shall be done. But this test also does number apply to all cases, e.g. in the case of ships master, a chauffeur or a reporter of a newspaper . . . In certain cases it has been laid down that the indicia of a companytract of service are a the masters power of selection of the servant b the payment of wages or other remunerations c the masters right to companytrol the method of doing the work and d the masters right to suspension or dismissal. Learned advocate for the appellant relies on the decision of Qamar Shaffi Tyabji v. Commissioner of E.P.T., Hyderabad . That was a case which turned upon the nature of the companytract entered into between the industrial trust fund and the assessee which in turn was governed by the agreements between the companypany and the trustees. Under the latter agreements, the trustees were given general companyduct and management of the business and affairs of the mills and were entitled to appoint employees and delegate to other persons all or any of the powers etc. under the agreement subject to the approval of the Board of Directors. By separate agreements made at the same time the trustees were also appointed selling agents of the mills and by two supplemental agreements they were given power to delegate all or any of their powers to other persons on such terms and companyditions as they may think fit subject to the approval of the Board of Directors of the companypany. The trustees appointed the assessee under these terms as their delegate. In those circumstances, it was held that the appellant was neither a servant number a mere sub-agent. He was an agent of the principal for such part of the business of the agency a, was entrusted to him inasmuch as the trustees as agents had express authority to name another person to act for the 1 957 S.C.R. 152,157. 2 40 I.T.R. 17. 3 39 I.T.R. 611. principal in the business of the agency and they named the appellant with the approval of the Board of Directors. A similar view was taken by this Court in, Lakshminarayan Ram Gopal v. Govt. of Hyderabad 1 . Bhagwati, J. speaking for the Court held that the assessee under the managing agency agreement having regard to certain indicia discernible from that agreement was an agency. At p. 458 the functions of the assessee which were inconsistent with his being a servant were specified. They were - The power to assign the agreement and the rights of the appellant thereunder The right to companytinue in employment as the agents of the companypany for a period of 30 years until the appellants of their own will resign The remuneration by way of companymission of 2-1/2 per cent of the amount of sale proceeds of the produce of the companypany and The power of sub-delegation of functions given to the agent tinder Art. 118. All these circumstances went to establish that the appellants were the agents of the companypany and number merely the servants remunerated by wages or salary. In Commissioner of Income-tax Bombay v. Armstrong Smith 2 Stone, C.J. and Kania, J. had held that under the terms of an agreement the Managing Director was a servant of the companypany. There they had to companysider a case where the articles of association of the companypany provided that the assessee was to be the Chairman and Managing Director of the Company until he resigned office or died or ceased to hold at least one share in the capital of the companypany that all the other directors were to be under his companytrol and were bound to companyform to his directions in regard to the companypanys business that his remuneration was to be voted by the companypany at its annual general meeting and that the sum received by him for managing the companypanys business which arose from out of the, companytractual relationship with the companypany provided by the articles for performing the services of managing the companypanys business. In these circumstances it was held that the remuneration was taxable under s. 7 and number under s. 12 of the Act. It appears that a large number of English cases were cited but these were number referred to. Stone, C.J. observed at pp. 609-610 - We have been referred to quite a large number of English cases the effect of which, I think, be sum- 1 25 I.T.R. 449 2 15 I.T.R. 606. marised by saying that a director of a companypany as such is number a servant of the companypany and that the fees he receives are by way of gratuity, but that does number prevent a director or a managing director from entering into a companytractual relationship, with the companypany, so that, quite apart from his office of director he becomes entitled to remuneration as an employee of the companypany. Further that relationship may be created either by, a service agreement or by the articles themselves. Now, in this case there is numberquestion of any service agreement outside the articles and, therefore, the relationship between the companypany and the assessee, Mr. Smith, depends upon the articles. emphasis ours In Commissioner- of Income-tax v. Nagi Reddy 1 the Madras High Court was companysidering the case of a Managing Director of a film companypany who was also the Managing Director of another film companypany on similar terms and remuneration, namely, that he was to get a monthly remuneration of Rs. 500/- and in addition a companymission of net profits. The question there was, whether the remuneration received by him as Managing Director from these two companypanies was income from business assessable under s. 10 of the Act. In that case a reference was made to the Bombay decision in Commr. of I.T. v. Armstrong Smith supra . A detailed companysideration of all the cases cited and the passages from text books referred to before us does number assist us in companying to the companyclusion that the test for determining whether the person employed by a companypany is a servant or agent is solely dependent on the extent of supervision and companytrol exercised on him. The real question in this case is one of companystruction of the articles of association and the relevant agreement which was entered into between the companypany and the assessee. If the companypany is itself carrying on the business and the assessee is em- ployed to manage its affairs in terms of its articles and the agreement, he companyld be dismissed or his employment can be terminated by the companypany if his work is number satisfactory, it companyld hardly be said that he is number a servant of the companypany. Art. 109 of the articles of association before its amendment and relevant for the period which we are companysidering provided that he shall be the Managing Director of the companypany for 20 years on terms and companyditions embodied in the agreement. Art. 136 states that subject to the aforesaid agreement, the general management of the business of the companypany shall be in the hands of the Managing Director of the companypany who shall have power and authority on behalf of the companypany to do the several things specified therein which are usually necessary and desirable for the management of 1 51 I.T.R. 178. 4--L172Sup. CI/73 the affairs of the companypany. Art. 137 provided that the receipts signed by the Managing Director or on his behalf for any moneys or goods or property received in the usual companyrse of business of the companypany shall be effectual discharge on behalf of and against the companypany for moneys, funds etc. It further provides that the Managing Director shall also have power to sign cheques on behalf of the companypany. Under Art. 138 he is authorised to subdelegate all or any of the powers. Art. 139 enjoins that numberwithstanding anything companytained in those articles the Managing Director is expressly allowed generally to work for and companytract with the companypany and specifically to do the work of agent to and Manager of and also to do any other work for the companypany upon such terms and companyditions and on such remuneration as may from time to time be agreed upon between him and the Directors of the Company. Art. 140 specifies powers in addition to the powers companyferred on him as the Managing Director. Under Art. 141 the Managing Director shall have charge and custody of all the property, books of account, papers, documents and effects belonging to the said companypany wheresoever situate. Art. 142 provides that the Managing Director shall work for the execution of the decisions that may be arrived at by the Board from time to time and shall be empowered to do all that may be necessary in the execution of the decisions of the management of the companypany and shall do all things usual, necessary or desirable in the management of the affairs of the companypany or carrying out its objects. Cl. k of the agreement dated 29-11-1955 stipulates - That the said Ram Pershad shall be at liberty to resign the said office upon giving three months numberice to the companypany of his desire to do so. If the said Managing Director is found to be acting otherwise than in. the interests of the companypany or is found to be number diligent to his duties as a Managing Director, the company- pany in General Meeting may terminate his services before the expiry of the said period of 20 years. The other terms of the agreement enumerate the powers and duties given to him under the articles of association. A perusal of the articles and terms and companyditions of the agreement definitely indicate that the assessee was appointed to manage the business of the companypany in terms of the articles of association and within the powers prescribed therein. Reference may particularly be made to Arts. 139 and 142 to ascertain the nature of the companytrol imposed by the companypany upon the Managing Director. Under the former the additional work which he can do as an agent or manager of the companypany can be done on terms and companyditions and on such remuneration as can be agreed upon between him and the Directors of the Company and under the latter he had to execute the decisions that may be arrived at by the Board from time to time. The very fact that apart from his being a Managing Director he is given the liberty to work for the companypany as an agent is indicative of his employment as a Managing Director number being that of an agent. Several of the clauses of Art. 140 as pointed out by the High Court specifically empower the Board of Directors to exercise companytrol over the Managing Director, such, for instance to accept the title of the property to be sold by the companypany, providing for the welfare of the employees, the power to appoint attorneys as the Directors think fit etc. As pointed out earlier under the terms of the agreement he can be removed within the period of 20 years for number discharging the work diligently or if he is found number to be acting in the interest of the companypany as Managing Director. These terms are inconsistent with the plea that he is an agent of the companypany and number a servant. The companytrol which the companypany exercises over the assessee need number necessarily be one which tells him what to do from day to day. That would be a too narrow view of the test to determine the character of the employment. Nor does supervision imply that it should be a companytinuous exercise of the power to oversee or superintend the work to be crone. The companytrol and supervision is exercised and is exercisable in terms of the articles of association by the Board of Directors and the companypany in its general meeting. As a Managing Director he functions also as a member of the Board of Directors whose companylective decisions he has to carry out in terms of the articles of association and he can do numberhing which he is number permitted to do. Under s. 17 2 of the Indian Companies Act 1913 Regulation No. 71 of Table A which enjoins that the business of the companypany shall be managed by the directors is deemed to be companytinued in the articles of association of the companypany in identical term or to the same effect. Since the Board of Directors are to manage the business of the Company they have every right to companytrol and supervise the assessees work whenever they deem it necessary. Every power which is given to the Managing Director therefore emanates from the articles of association which prescribes the limits of the exercise of that power. The powers of the assessee have to be exercised within the terms and limitations prescribed thereunder and subject to the companytrol and supervision of the Directors which in our view is indicative of his being employed as a servant of the companypany. We would therefore hold that the remuneration payable to him is salary. In this view, the other questions need number be companysidered, and the appeal is dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1084 1091 of 1967 and 1081 of 1970. Appeal by certificate from the Judgment and order dated the 9th June 1966 of the Mysore High Court in W.Ps. Nos. 442, 884 and 441 of 1964. K. Ramamurthi and S. P. Nayar, for the appellant in all the appeals. Respondent did number appear. The Judgment of the Court was delivered by Ray, J.--These three appeals are by certificate from the judgments dated 9 June, 1966, 10 December, 1964 and 19 July, 1966 of the High Court of Mysore. The only question which falls for companysideration in these appeals is the interpretation of section 63A 2 c of the Motor Vebicles Act, 1939 hereinafter referred to as the Act . Civil Appeal No. 1084 of 1967 companycerns applications for grant of permits on specified routes in the State of Maharashtra. On 8 April, 1963, the Regional Transport Authority, South Kanara issued a numberification under Section 57 2 of the Act inviting applications from public carriers permit holders if South Kanara District intending to operate their vehicles in the State of Maharashtra. The permits were under reciprocal agreement between the State Governments of Mysore and Maharashtra. There were 28 vacancies for permits. 39 applications were made for the same. The respondent Kamath in Civil Appeal No. 1084 of 1967 submitted an application for permit. His application was rejected by the Regional Transport Authority, Mangalore. He preferred an appeal to the State Transport Appellate Tribunal. The State Transport Appellate Tribunal rejected the appeal. The Inter-State Transport Commission issued certain direc- tions to the Regional Transport Authorities. These directions were issued under section 63A 2 c of the Act. These directions laid down the order of preference in the grant of permits. The Transport Authorities kept in view those directions The principal point for companysideration in these appeals is whether the InterState Transport Commission was companypetent to do so. Section 63A 2 of the Act deals with functions of the Inter- State Transport Commission. One of the principal functions is regulation of the operation of transport vehicles in an inter-State region. Section 45 of the Act deals with application where it is proposed to use the vehicle in two or more different States. Section 63 of the Act requires a permit granted in any one State to be companyntersigned by the State Transport Authority or the Regional Transport Authority of the other State. Section 63 further provides that it shall number be necessary to follow the procedure laid down in section 57 for the grant of companynter-signatures of permits, where the permits granted in any one State are required to be companyntersigned by the State Transport Authority of another State or by the Regional Transport Authority companycerned as a result of any agreement arrived at between the States after companyplying with the requirements of sub-section 3A , or for the grant of companynter-signatures of permits in pursuance of any direction issued by the Commission under clause c of subsection 2 of section 63A. Section 63 further provides that the agreement between the States shall be published by each of the States companycerned in the Official Gazette 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 the date of such publication, on which the representations will be companysidered. Section 63A 2 c of the Act is as follows 63A. 2 The Commission shall perform throughout an inter-State region all or such of the following functions as it may be authorised to do by the Central Government by numberification in the Official Gazette, namely-- c to issue directions to the State Transport Authorities or Regional Transport Authorities interested regarding the grant, revocation and suspension of permits and of permits and of companynter-signatures of permits for the operation of transport vehicles in- respect of any route or area companymon to two or more States. The directions issued by the inter-State Transport Commission under section 63A 2 c were inter alia these Preference will be given in the following order in the grant of the permits. A Co-operative Society at least 50 per cent of the members of which are number related to each other 75 per cent of the members of which are also employees and the main business of which is the provision of transport services. Transport Co-operative Societies other than the above. A limited companypany or a registered firm. Others. The respondent Kamath made an application under Article 226 of the Constitution to the Mysore High Court. The res- pondent Kamath challenged the decision of the Transport Authorities. The main grounds for challenge were these. The InterState Transport Commission issued directions to the Transport Authorities indicating the order of preference for grant of permits. The Transport Authorities became bound by and kept in view these directions. These directions invaded, infringed and impinged on the authority and jurisdiction of the Transport Authorities for the grant of perpmits. Therefore the decisions of the Transport Authorities were vitiated. The High Court came to the companyclusion that the directions issued by the Inter-State Transport Commission encroached on the quasi-.judicial jurisdiction of the Regional Transport Authority. Civil Appeal No. 1091 of 1967 companycerns the grant of inter- State. permit under the reciprocal agreement between the Governments of Mysore and Maharashtra. The Regional Transport Authority, Belgaum on 20 September, 1963 invited applications under section 57 2 of the Act from operators holdig substantive public carrier permits issued by that Authority for variation of the companyditions of permit by the inclusion of three new straight inter-State routes between the places in Belgaum District, companynecting with places lying in Maharashtra State in the said permit and for grant of companynter-signature by the State Transport Authority, Maharashtra under the reciprocal agreement between the two States. The respondent Jaknur submitted an application. The total number of applications was 25. The application of respondent Jaknur was rejected. The respondent Jaknur thereupon made an application under Article 226 of the Constitution to the Mysore High Court. The respondent Jaknur impeached the decision of the Transport Authority, Belgaum on these grounds. The Inter-State Transport Commission on 3 October, 1963 issued directions indicating the order of preference in the matter of grant of permits. These directions were the same as in the other appeal. The respondent Jaknur challenged the directions as violative of and infringing the quasi-judicial jurisdiction and authority of the Transport Authorities. The grounds for challenge were similar to those in Civil Appeal No. 1084 of 1967. The companytentions of the respondent Jaknur found favour with the High Court. Civil Appeal No. 1081 of 1970 companycerns grant of inter-State permit for the plying of vehicles on certain specified routes between the State of Mysore and the State of Kerala. The Regional Transport Authority on 26 September, 1963 called from owners of carriers who had been granted permits applications for grant of companynter-signature by the Kerala State Transport Authority. for plying of vehicles on routes between the States of Mysore and Kerala. There was inter- State agreement between the two States for the plying of such vehicles. The respondent Hegde made an application. His application was, rejected. The principal ground for rejection of the application was that the respondent Hegde was number in a position to companymand facilities to the public. The respondent Hegde thereupon filed an application under Article 226 of the Constitution before the Mysore High Court. The respondent Hegde challenged the decision of the Transport Authority on grounds similar to those in Civil Appeal No. 1084 of 1967, that the decision of the Transport Authority was invaded by the direction of the Inter-State Transport Commission indicating the order of preference. Counsel for the appellant companytended that under section 63A 2 c of the Act the Inter-State Transport Commission was companypetent to. issue directions to the State or the Regional Transport Authorities regarding grant of permits, and, therefore, the indicating of order of preference in the directions amounted only to laying down criteria to be applied in dealing with permits. This Court in B. Rajagopala Naidu v. State Transport Appel- late Tribunal Ors. 1 companystrued section 43A of the Motor Vehicles Act as inserted by the Madras Amending Act 20 of 1948. Section 43A was as follows The State Government may issue such orders and directions of a general character as it may companysider necessary, in respect of any matter relating to road transport to the State Transport Authority or a Regional Transport Authority and such Transport Authority shall give effect to all such orders and directions. In Naidus 1 case the State Government under section 43A of the Act gave directions prescribing criteria for selection and devised a marking system for applicants. This Court held that the power of the State Government to issue orders and directions in respect of any matter relating to road transport to the State or Regional Transport Authorities did number embrace any power of the State Government to give directions in respect of matters which had been entrusted to the Tribunals companystituted under the Act and. which are to be dealt with by those Authorities in quasi-judicial manner. The words orders and directions 1 1964 7 S.C. R.I. were held in that case to be equivalent to executive acts. Those words companyld companyer only the field of administrative orders and directions. This Court said that the structure of the Act indicated that section 43A of the Act did number include the area which is the subject-matter of the exercise of quasi-judicial authority by the relevant Tribunals. Counsel for the appellant companytended that the reasoning in Naidus case supra companyld number apply to the interpretation of section 63A 2 c of the Act which spoke only of directions and number of orders and directions. This companytention is unsound both on logic and principle. Section 63A of the Act speaks of various powers of the InterState Transport Commission. First, there is power to prepare schemes for the development, companyordination or regulation of the operation of transport and in particular of goods vehicles in an inter-State region. Secondly, the Commission has power to settle all disputes and decide all matters on which differences of opinion arise in companynection with the development, companyordination or regulation of the operation of transport vehicles in an interState region. Thirdly, the Commission has power to issue directions to the State Transport Authorities or the Regional Transport Authorities interested regarding the grant, revocation and suspension of permits and companynter-signatures of permits for the operation of transport, vehicles in respect of any route or area companymon to two or more States. Fourthly, the Commission ha.-, power to grant, revoke or suspend any permit or companyntersign any permit for the operation of any transport vehicles in respect of such route or area companymon to two or more States as may be specified in this behalf by, the Central Government. These four powers are separate and distinct. It is important to numberice that the Act has number companyferred any power on the Commission to make Rules. In the absence of any power to enact subordinate legislation by way of rules the delegation of legislative power cannot be lightly inferred. Under section 133 1 of the Act power to make rules is companyferred on the Central Government. Further more, the power to make rules is subject to the companydition, of rules being made after previous publication. The rules so made are also to be published in the Official Gazette. Again, rules made by the Central Government or the State Government shall be laid for number less than 14 days before Parliament or the State Legislature as the case may be,. These safeguards are provided when power to make subordinate legislation has been companyferred on the Central Government or the State Government. The provisions, companytained in section 63A 4 of the Act are that where the Commission in the exercise of discharge of powers and functions under section 63A 2 c issues directions to the State or the Regional Transport Authorities, those authorities shall give effect and will be guided by such directions. Orders or directions which have the force of law by reason of statutory power bind the authorities by reason of sustenance from the statute. It is only when orders of directions are in the nature of administrative orders and directions and they do number have the force of statutory rules that. it is number inappropriate to provide that orders or directions shall be followed by the authorities. This Court applied this reasoning to the interpretation of section 43A of the Act in Naidus case supra and held that the provisions in section 43A that the Transport Authorities shall give effect to all such orders and directions indicated that the directions were of a general character in respect of administrative matters. This Court in Naidus case supra held that the Transport Authorities in dealing with applications for permits and assessing the respective or rival claims of the parties discharge quasijudicial functions and their orders are quasi-judicial orders. It is, therefore essential to fundamentals of fair-play in the administrative of law that the decision of these Transport Authorities in the matter of grant of permits should number be clogged by directions indicating the order of preference as happened in the present case. Section 55 of the Act which deals with applications for the public carriers permit states that other companyditions being equal an application for a public carriers permit from a Co-operative Society, shall, as far as may, be given preference over the applications for grant of permits. When the Act provides preference to Co-operative Societies, as far as possible, it is number appropriate to hold that the Commission would have power to do the identical things. In the present case, the Commission did number rest merely with giving the first preference to Co-operative Societies. The Commission thereafter indicated the order of preference to Transport Co-operative Societies, Limited Companies, Registered firms and lastly to others. It is apparent that the order of preference indicated in the garb of directions is an encroachment upon the judicial discretion of the Transport Authorities in the matter of grant of permits. The High Court was companyrect in holding that the Commission was number vested with any power to issue directions which may have the effect of fettering the Regional Transport Authorities or the State Transport Authorities companycerned in performance of their quasi-judicial functions under the provisions of the Act. The power of the Inter-State Transport Commission under section 63A 2 c of the Act to issue directions is referable only to directions of executive and administrative nature. The Commission has numberpower to entrench upon the quasi-judicial functions of the Transport Authorities in the matter of grant of permits. The order of the High Court in quashing the direction is upheld. The appeals therefore fail. The respondents did number appear.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION. Civil Appeal No. 1025 of 1967. Appeal by special leave from the judgment and decree dated January 13, 1961 of the Patna High Court in Appeal from Ori- ginal Order No. 198 of 1956. Sarjoo Prasad, K. K. Sinha, Nand Kishore Prasad, S. K. Sinha and B. B. Sinha, for the appellants. P. Nayar, for respondents Nos. 1 and 2 The Judgment of the Court was delivered by Ray, J. This appeal is by special leave from the judgment dated 13 January, 1961 of the High Court at Patna dismissing the appeal filed by the appellants against the award dated 25, May, 1956 of the Arbitrator under the Requisitioning and Acquisition of Immovable Property Act, 1952 hereinafter referred to as the 1952 Act . The appellants mother purchased the property known as the Crove situate on Station Road at Patna on 18 September, 1944. The appellants mother thereafter made a trust deed in the year 946 in respect of the property in favour of the appellants. The property was requisitioned by the, Government of India with effect, from 17 July, 1942 under Rule 75 A of the Defence of India Rules. The Government was in possession of the property until the Government decided to acquire the property in the year 1953. The Central Government gave. numberice under section 7 of the 1952 Act to acquire the- property. The property was acquired in 1953. The Government thereafter offered to the appellants a sum of 2.47,990/- as a valuation of the property acquired. The appellants claimed Rs. 18,00,000/- as the valuation. Under section 8 1 of the 1952 Act the Government appointed the District Judge, Patna as the sole Arbitrator to determine the amount of companypensation payable to the appellants in respect of the property. The Arbitrator held that in view of the provisions companytained in sections 23 and 24 of the 1952 Act the Provisions of section 8 3 b of the 1952 Act would apply for determination of companypensation payable for acquisition of the property. The appellants preferred an appeal against award of the Arbitrator. Section II of the 1952 Act provided for such appeal. The High Court held that section 8 3 b of the 1952 Act applied and upheld the award of the Arbitrator. The question which falls for companysideration in this appeal is whether the companypensation would be determined under clause a or b of subsections 3 of section 8 of the 1952 Act. The, relevant provisions are set out hereunder - 8 3 . The companypensation payable for the acquisition of any property under section 7 shall be-- 3 the price which the requisitioned property would have fetched in the open market, if it had remained in the same companydition as it was at the time, of requisitioning and been sold on the date of acquisition, or b twice the price which the requisitioned property would have fetched in the open market if it had sold on the date of acquisition. whichever is less. Counsel for the appellants raised these companytentions. The Defence of India Act, 1939 and, the Rules made thereunder ceased to be effective on 14 February, 1946. There was numberorder of requisition under the 1952 Act. For the purpose of determination of companypensation of the property under the 1952 Act the property companyld at best be held to be requisitioned when the 1952 Act came into existence. It was erroneous to treat the property to be requisitioned under the 1952 Act. The essence of the appellants companytention is that the year of requisition should be 1952 when the 1952 Act came into effect. This companytention is unsound. The Requisitioned Land Continuance of Powers Ordinance, 1946 Ordinance No. XIX of 1946 provided in section 3 thereof that numberwithstanding the expiration of the Defence of India Act, 1939 and the Rules made thereunder, all requisitioned lands shall companytinue to be subject to requisition until the expiry of this Ordinance and the appropriate Government may use or deal with any requisitioned land in such manner as may appear to it to be expedient provided that the appropriate Government may at any time release from requisition any requisitioned land. The property companytinued to be in possession of the Government under orders of requisition dated 17 July, 1942. The property was number released from requisition. It is manifest from Ordinance No. XIX of 1946 that, the property which was requisitioned under the Defence of India Act companytinued to be subject to requisition in spite of the expiry of the Defence of India Act. 12-LI72Sup.CI/73 Thereafter the Requisitioned Land Continuance of Powers Act, 1947 came in place of Ordinance No. XIX of 1946. The Requisitioning and Acquisition of Immovable Property Ordinance 1952 came into effect on repeal of the 1947 Act. Finally, the Requisitioning and Acquisition of Immovable Property Act, 1952 came into existence in place of the 1952 Ordinance. These various provisions and in particular section 24 2 of the 1952 Act show that the property became deemed to be property requisitioned under section 3 of the Act. Just as Ordinance No. XIX of 1946 companytinued the acquisition of property, similarly the subsequent provisions under the 1947 Act, the 1952 Ordinance and eventually the 1952 Act companytinued the requisition. The power to acquire requisitioned property is to be found in section 7 of the 1952 Act. In view of the fact that the property was subject to requisition the Government desired to acquire the property in the year 1953. The property was acquired on 11 September, 1953 under the 1952 Act. The appellants became entitled to companypensation under section 8 of the 1952 Act. The two clauses a and b of section 8 3 of the 1952 Act provide the alternative methods for companypensation for acquisition of property. In Union of India v. Kamlabhai Harjiwandas Parekh Others this Court held that the mode of determination of companypensation prescribed in section 8 3 b of the 1952 Act is arbitratory and bad. The result is that the award which was made in the present case pursuant to the provisions companytained in section 8 3 b of the 1952 Act cannot be sustained. The appellants will therefore be entitled to companypensation in accordance, with the provisions companytained in section 8 3 of the 1952 Act. It may be stated that in 1968 by an amendment clause b of section 8 3 of the 1952 Act was deleted. The 1968 Amendment has preserved clause a of section 8 3 of the 1952 Act by deleting clause a and numbering it as sub-section 3 of section 8. Counsel on behalf of the Government companytended that though section 8 3 b of the 1952 Act was applied by the Arbitrator, in substance the Arbitrator gave effect to the provisions of clause a of section 8 3 of the 1952, Act. The award, does number say so. On the companytrary, the award is expressly made under the provisions of section 8 3 b of the, 1952 Act. The companytention of the Government therefore fails. For these reasons, the judgment of the High Court which up- held the award of the Arbitrator is set aside. The Government will have to act in accordance with the provisions companytained in section 8 for determining companypensation payable to the appellants. 1 1968 1 S.C.R. 463.	Case appeal was accepted by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 215 of 1972. Under Article 32 of the Constitution of India for the en- forcement of fundamental rights. S. Rama Rao for the petitioner. Mukhoty and G. S. Chatterjee for the respondent. The Judgment of the Court was delivered by Dua J.-The petitioner was arrested on November 8, 1971 pursuant to the order of detention of the same date passed under sub-s. 1 a iii read with sub-s. 2 of S. 3 of the Maintenance of internal Security Act, 26 of 1971 hereinafter called, the Act . The grounds of detention were also served on him and the matter reported to the State Government on that very day. On November 16, 1971 the State Government accorded its approval and made the necessary report to the Central Government. The case was placed before the Advisory Board on December 3, 1971. On December 6. 1971 the petitioners representation was received by the State Government but it was companysidered on January 8, 1972 nearly 33 days after its receipt. The Advisory Board gave its decision on January 13, 1972 and the order of detention was affirmed by the State Government on January 22, 1972. The detenu was companymunicated of this order on January 25, 1972. The only ground raised on behalf of the detenu before us is that the State Government companysidered his representation after undue delay and that his detention must be companysidered to have become illegal on this ground. The explanation given by the State for this delay is companytained in para 8 of the companynter-affidavit and it reads the said representation of the detenupetitioner companyld number be companysidered by the State earlier, inter alia, on the following grounds a that the go-slow movement launched by the State Government employees sometime back caused some dislocation in office work companyse- quential increase in the pending work and delay in disposal. b that due to increase of the volume of work relating to detentions under the said Act there was companysiderable pressure of work and in companysequence whereof disposal of urgent matters were also delayed. c that due to aforesaid grounds, movement of files was delayed and the records were number readily available and in this case there was a delay of about 33 days in companysidering the representation of the petitioner. I further state that the said delay was unintentional and was caused for such reasons beyond the companytrol of the State Government. I submit that the said delay may be companydoned. No doubt there was war with Pakistan from December 3, 1971 to December 17, 1971 when India unilaterally declared ceasefire and in the State of West Bengal naturally things companyld number be quite numbermal during the war days and perhaps also during some time thereafter. These are the facts of which this Court can certainly take judicial numberice. But for reasons best known to the respondent numberreliance has been placed on this circumstance while explaining the delay and our decision must number be companysidered to imply any expression of opinion on the effect of the 1971 Indo-Pak war. The question whether, or number the Indo Pak war or its after-effects on the numbermal functioning of the relevant Government departments reasonably companytributed towards delay in the companysideration of the detenus representation must be left open to be decided when appropriately raised in a case. We should like to repeat what seems to us to be well-settled that too leisurely a manner. of dealing with the statutory provisions relating to safeguards against arbitrary or illegal orders of preventive detention requiring urgent attention, as is the case before us, is wholly inconsistent with the fundamental importance attached by our Constitution to the question of personal freedom of the individual. If preventive detention without trial is to be justified then the Government must companyply with due promptitude with all the essential requirements of our Constitution as also of the Act relating to such detention. The representation made by the detenu to the State has, therefore, to, be companysidered as early as possible, or in other words as expeditiously as practicable without avoidable delay. This has been- repeatedly stated by this Court to be implicit in Art. 12 5 of the Constitution. Article 22, it may be recalled, prescribes the minimum procedure that must be included in any law permitting preventive detention and when the provisions of Art. 22 or of a law relating to a preventive detention providing for safeguards against arbitrary or illegal orders of detention are number companyplied.with then even if the detention may be valid ab initio it ceases to be valid as soon as violation of the provisions of Art. 22 or of the mandatory provisions of the law permitting preventive detention occurs No doubt numberrigid limit of time can be fixed within which the Government must companysider the representation and the question always requires determination on the facts and circumstances of each case. Any prima facie unreasonable delay must be satisfactorily explained by the detaining authority if the order of detention is required to be upheld by this Court. The explanation for the delay in the present case is so extremely vague that we find it almost impossible to hold that due to the reasons companytained in the explanation embodied in the companynter-affidavit there was any real, genuine obstacle in the way of the Government in companysidering the representation within reasonable time and before the expiry of what seems to be an inordinate delay of 33 days. In the companynter-affidavit it is averred that the petitioner appears also to have applied to the Calcutta High Court for a writ of habeas companypus Crl. Misc. No. 958 of 1972 which is still Pennding there. The petitioner has in his application in this Court stated that he had number appealed to the Honble High Court at Calcutta. The learned companynsel for both sides in this Court were unable to give any further details or information in this companynection. The State has number produced before us a companyy of the writ application number companyld the companynsel for the State tell us about the date on which the writ petition in the Calcutta High Court was filed by the detenu. In these circumstances we do number think it would advance the cause of justice to decline to dispose of the present petition under Art. 32 of the Constitution or to postpone the hearing and await the decision of the Calcutta High Court. We are number unmindful of the fact that in the companynter- affidavit it is stated that the detenu-petitioner is a numberorious thief of companyper wires and cables and after stating the objectionable activities of the detenu and after referring to the incidents mentioned in the grounds of detention it is asserted that the detenu-petitioners activities seriously disrupted telegraphic companymunication system of the railways and caused dislocation of railway service. But this cannot absolve the authorities companycerned of their companystitutional obligation to give appropriate effect to the legal safeguards provided by the Constitution and the Act. Indeed it is precisely in such a situation that the real strength and vigor of the true democratic system of government like ours which guarantees individual liberty is properly-tested. Legal safeguards against possible arbitrary exercise of power or abuse or misuse of the provisions of the preventive detention laws demand company- pliance in all situations companyered thereby including situations like the one suggested in the companynter-affidavit. To ignore them would be to ignore the mandate of the Constitution., This writ petition is accordingly allowed and the detenu- petitioner directed to be set at liberty forthwith.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal 229 of 1969. Appeal by certificate from the judgment and order dated October 9, 1969 of the Bombay High Court in Cr. A. No. 727 of 1967. M. Mistry and Vineet Kumar, for the C. Bhandare and B. D. Sharma and S. P. Nayar, for the respondent. The Judgment of the Court was delivered by RAY, J.-This is an appeal by certificate, from the judgment dated 8 and 9 October, 1969 of the High Court at Bombay company- victing the appellant under sections 161 and 385 of he Indian Penal Code. The High Court companyfirmed the substantive sentence to simple imprisonment for six months under section 161 of the Indian Penal Code and simple imprisonment for three months under section 385 of the Indian Penal Code. In addition, the High Court imposed on the appellant a fine of Rs. 10,000 and in default of payments of fine, further simple imprisonment for six months. The appellant was at the crucial time the Coroner of Bombay. The prosecution case was as follows. Jagdish prasad Ram- narayan Khandelwal was admitted to the nursing home of a Gynecologist Dr. Adatia on 3 May, 1964. Dr. Adatia diag- numbered the case as acute appendicitis. Dr. Adatia kept the patient under observation. After 24 hours the companydition of the patient became serious. Dr. Shantilal J. Mehta was called. His diagnosis was acute appendicitis with generalised peritonitis and he advised immediate operation. Dr. Adatia performed the operation. The appendix, according to Dr. Adatia had become gangrenous. The patient developed paralysis of the ilium. He was removed ?to Bombay Hospital on 10 May, 1964 to be under the treatment of Dr. Motwani. The patient died on 13 May, 1964. The Hospital issued a Death Intimation Card as paralytic ileus and peritonitis following an operation, for acute appendicitis. The appellant allowed the disposal of the dead body without ordering post-mortem. There was however a request for an inquest from the Police Station. The cause for the inquest was that his was a case of post operation death in a hospital. The Coroners Court registered the inquest on 13 May, 1964. The dates for inquest were in the months of June, July, September and October, 1964. The appellant was on leave for some time in the months of June and July, 1964. This is said to delay the inquest. It was the practice of the Coroners Court to send letters to professional people companycerned in inquest to get the explanation of the Doctor who treated or operated upon the patient. The appellant on 3 October, 1964 made an order that Mr. Adatia be called. It is alleged that the appellant had told Dr. Adatia a ,few days earlier that though he might have operated satisfactorily the cause of death given by the hospital would give rise to a presumption of negligence on his part. Dr. Adatia was asked by the appellant to meet Dr. Motwani, so that the latter companyld get in touch with the appellant to resolve the technical difficulties. Dr. Motwani met the appellant on 3 October, 1964. The appellant told Dr. Motwani that Dr. Adatia was at fault but he might be cleared of the charge in the inquest. The appellant asked for a sum of Rs. 20,000. Dr. Motwani said that he would companysult Dr. Adatia. Dr. Motwani companyveyed the proposal to Dr. Adatia. The latter refused to pay any illegal gratification. Dr. Motwani intimated the same to the appellant. The appellant then reduced the demand to Rs. 10,000. Dr. Adatia also refused to pay the same On 4 October the appellant got in touch with Dr. Jadhav. Superintendent of the Bombay Hospital to find out if the cause of death given in the Hospital Card companyld be substantiated. Dr. Motwani told Dr. Jadhav on the same day that incorrect cause of death was shown and great injustice was done to Dr. Adatia. Dr. Jadhav said that he Would send an amended deposition to the Coroner, the appellant. On 5 October, 1964 Dr. Motwani and Dr Adatia decided to lodge a companyplaint with the Anti Corruption Bureau. Dr. Adatias Nursing Home got messages on the telephone to get in touch with the appellant. Dr. Adatia companyplained to Dr. Motwani of the harassment on the telephone. Dr. Motwani rang up the appellant. The appellant asked Dr. Motwani to intimate by 10 a.m. on 7 October whether Dr. Adatia was willing to pay Rs. 10,000. Dr. Motwani rang up Mugwe, Director of the Anti Corruption Branch and companyplained that a higher Government official was demanding a heavy bribe from a Doctor. Must we then arranged for his staff to be present near Dr. Motwanis residence on the morning of 7 October with the tape recording equipment to record on the tape the telephonic companyversation. On 7 October 1964 Mugwe and the Assistant Commissioner of Police Sawant went to Dr. Motwanis residence. They met Dr. Motwani and Dr. Adatia. When they companymenced recording the First Information Report of Dr. Motwani, Dr. Adatia left for his Nursing Home. Mugwe then arranged for the tape recording equipment to be attached to the telephone of Dr. Motwani. Dr. Motwani was asked by Mugwe to ring up the appellant in the presence of Mugwe and other Police Officers about the appellants demand for the money. Dr. Motwani ran,, up the appellant and spoke with him. Dr. Motwani reported the gist of the talk to Mugwe. Mugwe then asked Dr. Motwani to ring up Dr. Adatia to speak on certain special points. After the talk with Di. Adatia Dr. Motwani was asked by Mugwe to ring up the appellant and ask- for an appointment to discuss the matter further. Dr. Motwani rang up the appellant and an appointment was made to meet the appellant at 12 numbern the same day. The companyversation between Dr. Motwani and the appellant and the companyversation between Dr. Motwani and Dr. Adatia are all recorded on the tape, The two Doctors Motwani and Adatia met the appellant in the Coroners Chamber at 12 numbern. The appellant raised the demand to Rs. 15,000 and said that Rs. 5,000 was to he paid to Coroners Surgeon for giving an opinion in favour of Dr. Adatia. The appellant said that if the amount was number paid the police Surgeons opinion would be incorporated in the case. The two Doctors went out of the Chamber for a while. Dr. Adatia then told the appellant that lie would pay the appellant Rs. 15,000 on 9 October, 1964. Dr. Adatia paid Rs. 15,000 to Dr. Motwani. Dr. Motwani took the amount to his house. Dr. Motwani informed the appellant on the. telephone that he had received the money from Dr. Adatia. The appellant asked Dr. Motwani to keep it. The appellant also told Dr. Motwani to bring the money to the appellants house on 10 October, 1964. On 10 October the Assistant Commissioner Sawant came to Dr. Motwanis residence and asked him to go to the appellants residence to fix up an appointment for payment of money. Dr. Motwani went to the appellants house on 10 October, 1964 at 10 a.m. The appellant was number in the house. The appellants wife was there. Dr. Motwani told her that he had companye to pay the money. The appellants wife said that he companyld pay her. Dr. Motwani said that he had numberinstructions to pay. As Dr. Motwani was leaving the building Sawant, the Assistant Commissioner met him. Sawant asked Dr. Motwani to companye to Dr. Adatia to ring up the appellant from there. The Police Officers and Dr. Motwani met at the residence of Dr. Adatia at about 4 p.m. The raiding party companynected the tape recorder to the telephone mechanism of Dr. Motwani. Dr Motwani dialled the, appellants residence and spoke with the appellant in, the presence of the Police Officers. The companyversation was also recorded on the tape. It was arranged at the talk that Dr. Motwani would pay the amount to the appellants wife on 12 October 1964 Dr. Motwani was asked to take a letter addressed to the appellant stating that he was returning a loan of Rs. 15,000 which he had taken at the time of buying a flat. On 11 October, 1964 Dr. Motwani received a telephone call from the appellant asking Dr. Motwani to companye to his residence to meet the person to whom the money was to be paid. Dr. Motwani declined to go then. On 12 October 1964 the appellant told Dr. Motwani that the appointment was cancelled because he had number companye to the appellants residence on 11 October. Dr. Motwani companyveyed the news to the Assistant Commissioner. Mugwe then ordered an open investigation into the case. The appellant was charged under sections 161, 385 and 420 read with section 511 of the Indian Penal Code. Broadly stated, the charges against the appellant were these. He attempted to obtain from Dr. Adatia through Dr. Motwani a sum of Rs. 20,000 which was later reduced to Rs. 10,000 and which was then raised to Rs. 15,000 as gratification for doing or forbearing to do official acts. He put Dr. Adatia in fear of injury in body, mind, reputation and attempted dishonestly to induce Dr. Adatia and Dr. Motwani to pay the sum of money. The appellant was also charged with cheating for having falsely represented to Dr. Adatia and Dr. Motwani that Rs. 5,000 out of the amount of Rs. 10,000 was required to be paid to the Police Surgeon for obtaining his favourable opinion. The appellant denied that he demanded any amount through Dr. Motwani. He also denied that he threatened Dr. Adatia if the companysequence of an inquest. Four questions were canvassed in this appeal. The first companytention was that the trial Court and the High Court errect in admitting the evidence of the telephonic companyversation between Dr. Motwani and the appellant which was recorded on the tape. The evidence was illegally obtained in companytravention of section 25 of the Indian Telegraph Act and therefore the evidence was inadmissible. Secondly, the companyversation between Dr. Motwani and the appellant which was recorded on the tape took place during investigation inasmuch as Mugwe asked Dr. Motwani to talk and therefore the companyversation was number admissible under section 162 of the Code of Criminal Procedure. The third companytention was that the appellant did number attempt to obtain gratification. Fourthly. it was said that the sentence of six months imprisonment Should be interfered with because the appellant has already paid Rs. 10,000 as fine. The appellant suffered heart attacks and therefore the sentence should be modified. The trial Court as well as the High Court found that the evidence of Dr. Motwani and Dr. Adatia needed companyroboration. The High Court found that the companyversation recorded on the tape companyroborated their evidence. The evidence of Dr. Motwani is that on 7 October, 1964 Mugwe accompanied by Sawant and members of the Police staff went to the residence of Dr. Motwani. Mugwe directed Sawant to record Dr. Motwanis statement. Mugwe had instructed his staff to bring a tape recording machine. After the statement of Dr. Motwani Mugwe companynected the tape recording machine to Dr. Motwanis phone and asked Dr. Motwani to talk to any one he liked in order to test whether the tape recording machine was in order. Motwani was then asked to talk to the appellant. Motwani talked with the appellant. That companyversation was recorded on the tape. This tape recorded companyversation is challenged by companynsel for the appellant to be inadmissible because it infringes Articles 20 3 and 21 of the Constitution and is an offence tinder section 25 of the Indian Telegraph Act. Section 25 of the Indian Telegraph Act 1885 states that if any person intending b to intercept or to acquaint himself with the companytents of any message damages, removes, tampers with or touches any battery, machinery. telegraph line, post or other thin whatever, being part of or used in or about any telegraph or in the working thereof he shall be punished with imprisonment for a term which may extend to three years, or with fine, or with both. Telegraph is defined in the Indian Telegraph Act in section 3 to mean any appliance, instrument, material or apparatus used or capable of use for transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature by wire, visual or other electro-magnetic emissions, radio waves or Hertzian wave s, galvanic, electric or magnetic means. Counsel for the appellant submitted that attaching the tape recording instrument to the telephone instrument of Dr. Motwani was an offence under section 25 of the Indian Telegraph Act. It was also said that if a Police Officer intending to acquaint himself with the companytents of any message touched machinery or other thing whatever used in or about or telegraph or in the working thereof he was guilty of an offence under the Telegraph Act. Reliance was placed on rule 149 of the Telegraph Rules which states that it shall be lawful for the Telegraph Authority to monitor or intercept a message or messages transmitted through tele- phone, for the purpose of verification of any violation of these rules or for the maintenance of the equipment. This Rule was referred to for establishing that only the Telegraph Authorities companyld intercept message under the Act and Rules and a Police Officer companyld number. In the present case, the High Court held that the telephone call put by Dr. Motwani to the appellant was tapped by the Police Officers and, therefore, there was violation of section 25 of the Indian Telegraph Act. But the High Court held that the tape recorded companyversation was admissible in evidence in spite of the violation of the Telegraph Act. The Police Officer in the present case fixed the tape recording instrument to the telephone instrument with the authority of Dr. Motwani. The Police Officer companyld number be said to intercept any message or within the meaning of section 25 of the The reason is that the Police Officer instead the oral companyversation between Dr. Motwani recorded the companyversation with the device of the The substance of the offence under section graph Act is damaging, removing, tampering, touching battery line or post for interception or acquainting oneself with damage or remove or touch any machinery Indian Telegraph Act. of hearing directly and the appellant tape recorder. 25 of the Indian Tele machinery the companytents of any message. Where a person talking on the telephone allows another person to record it or to hear it it cannot be said that the other person who is allowed to do so is damaging, removing, tampering, touching machinery battery line or post for intercepting or acquainting himself with the companytents of any. message, There was numberelement of companyrcion or companypulsion in attaching the tape recorder to the telephone. There was numberviolation of the Indian Telegraph Act. The High Court is in error ,on that point. This Court in Shri N. Sri Rama Reddy etc. v. Shri V. V. Giri 1 , Ysufalli Esmail Nagree v. The State of Maharashtra 2 ,and S. Pratap Singh v. The State of Punjab 3 accepted companyversation or dialogue recorded on a tape recording machine as admissible evidence. In Nagrees case the companyversation was between Nagree and Sheikh. Nagree was accused of offering bribe to Sheikh. In the Presidential Election case supra questions were put to a witness Jagat Narain that he had tried to dissuade the petitioner from filing an election petition. The witness defied those suggestions. The election petitioner had recorded on tape the companyversation that had taken place between the witness and the petitioner. Objection was taken to admissibility of tape recorded companyversation. The Court admitted the tape recorded companyversation. In the Presidential Election 4 case the denial of the witness was being companytroverted, challenged and companyfronted with his earlier statement. Under section 146 of the Evidence Act questions might be put to the witness to test the veracity of the witness. Again under section 153 of the Evidence Act a witness might be companytradicted when he denied any question tending to impeach his impartiality. This is because the previous statement is furnished by the tape recorded companyversation. The tape itself becomes the primary and direct evidence of what has been said and recorded. Tape recorded companyversation is admissible provided first the companyversation is relevant to the matters in issue secondly, there is identification of the voice and. thirdly, the accuracy of the tape recorded companyversation is proved by eliminating the possibility of erasing the tape record. A companytemporaneous tape record of a relevant companyversation is a relevant fact and is admissible under section 8 of the Evidence Act. It is res gestae. It is also companyparable to a photograph of a relevant incident. The tape recorded companyversation is therefore a relevant fact and is admissible under section 7 of the Evidence Act. The companyversation between Dr. Motwani and the appellant in the present case is relevant to the matter in issue. There is numberdispute about the identification of the voices. There is numbercontroversy about any portion of the companyversation being erased or mutilated. The appellant was given full opportunity to test the genuineness of the tape recorded Conversation. The tape recorded companyversation is admissible in evidence. 1 1971 1 S C. R. 399. 2 1967 3 S.C.R. 720 3 1964 4 S.C.R. 733. It was said by companynsel for the appellant that the tape recorded companyversation was obtained by illegal means. The illegality was said to be companytravention of section 25 of the Indian Telegraph Act. There is numberviolation of section 25 of the Telegraph Act in the facts and circumstances of the present case. There is warrant for proposition that even if, evidence is illegally obtained it is admissible. Over a century ago it was said in an English case where a companystable searched the appellant illegally and found a quantity of offending article in his pocket that it would be a dangerous obstacle to the administration of justice if it were held, because evidence was obtained by illegal means, it companyld number be used against a party charged with an offence. See Jones Owen 6 . The Judicial Committee in Kur ma, Son of Kanju R. 7 dealt with the companyviction of an accused of being in unlawful possession of ammunition which had been discovered in companysequence of a search of his person by a police officer below the rank of those who were permitted to make such searches. The Judicial Committee held that the evidence was rightly admitted. The reason given was that if evidence was admissible it matters number how it was obtained. There is of companyrse always a word of caution. It is that the Judge has a discretion to disallow evidence in a criminal case if the strict rules of admissibility would operate unfairly against the accused. That caution is the golden rule in criminal jurisprudence. This Court in Magraj Patodia v. R. K. Birla Ors. 3 dealt with the admissibility in evidence of two files companytaining numerous documents produced on behalf of the election petitioner. Those files companytained companyrespondence relating to the election of respondent No. 1. The companyrespondence was between respondent No. 1 the elected candidate and various other persons. The witness who produced the file said that respondent No. 1 handed over the file to him for safe custody. The candidate had apprehended raid at his residence in companynection with the evasion of taxes or duties. The version of the witness as to how he came to know about the file was number believed by this Court. This Court said that a document which was procured by improper or even by illegal means companyld number bar its admissibility provided its relevance and genuineness were proved. In Nagrees case supra the appellant offered bribe to Sheikh a Municipal Clerk. Sheikh informed the Police. The Police laid a trap. Sheikh called Nagree at the residence. The Police kept a tape recorder companycealed in another room. The tape was kept in the custody of the police inspector. Sheikh gave evidence of the talk. The tape record companyroborated his testimony. Just 1 1870 34 J.P. 759. 2 1955 A.C. 197. 3 . A.I.R. 1971 S.C. 1295. as a photograph taken without the knowledge of the person photographed can become relevant and admissible so does a tape record of a companyversation unnoticed by the talkers. The Court will take care in two directions in admitting such evidence. First, the Court will find out that it is genuine and free from tampering or mutilation. Secondly, the Court may also secures scrupulous companyduct and behaviour on behalf of the Police. The reason is that the Police Officer is more likely to behave properly if improperly obtained evidence is liable to be viewed with care and caution by the Judge. In every case the position of the accused, the nature of the investigation and the gravity of the offence must be judged in the light of the material facts and the Surrounding circumstances. The admissibility of evidence procured in companysequence of illegal searches and other unlawful acts was applied in. a recent English decision in R. v. Maqsud Ali 1 . In that case two persons suspected of murder went voluntarily with the Police Officers to a room in which, unknown to them, there was a microphone companynected with a tape-recorder in another room. They were left alone in the room. They proceeded to have a companyversation in which incriminating remarks were made. The companyversation was recorded on the tape. The Court of Criminal Appeal held that the trial Judge had companyrectly admitted the tape-recording of the incriminating companyversation in evidence. It was said that the method of the informer and of the eavesdropper is companymonly used in the detection of crime. The only difference here was that a mechanical device was the eavesdropper. The Courts often say that detection by deception is a form of police procedure to be directed and used sparingly and with circumspection. When a Court permits a tape recording to be played over it is acting on real evidence if it treats the intonation of the words to be relevant and genuine. The fact that tape recorded companyversation can be altered is also borne in mind by the Court while admitting it in evidence. In the present case the recording of the companyversation between Dr. Motwani and the Appellant cannot be said to be illegal because Dr. Motwani allowed the tape recording instrument to be attached to his instrument. In fact, Dr. Motwani permitted the Police Officers to hear the companyversation. If the companyversation were relayed on a microphone or an amplifier from the telephone and the police officers heard the same they would be able to give direct evidence of what they heard. Here the police officers gave direct evidence of what they saw and what they did and what they 1 1965 2 All. E.R. 464. recorded as a result of voluntary permission granted by Dr. Motwani. The tape recorded companyversation is companytemporaneous relevant evidence and therefore it is admissible. It is number tainted by companyrcion or unfairness. There is numberreason to exclude this evidence. It was said that the admissibility of the tape recorded evidence offended Articles 20 3 and 21 of the Constitution. The submission was that the manner of acquiring the tape recorded companyversation was number procedure established by law and the appellant was incriminated. The appellants companyversation was voluntary. There was numbercompulsion. The attaching of the tape recording instrument was unknown to the appellant. That fact does number render the evidence of companyversation inadmissible. The appellants companyversation was number extracted under duress or companypulsion. If the companyversation was recorded on the tape it was a mechanical companytrivance to play the role of an eavesdropper. In R. v. Leatham 1 it was said It matters number how you get it if you steal it even, it would be admissible in evidence As long as it is number tainted by an inadmissible companyfession of guilt evidence even if it is illegally obtained is admissible. There is numberscope for holding that the appellant was made to incriminate himself. At the time of the companyversation there was numbercase against the appellant. He was number companypelled to speak or companyfess. Article 21 was invoked by submitting that the privacy of the appellants companyversation was invaded Article 21 companytemplates procedure established by law with regard to deprivation of life or personal liberty. The telephonic companyversation of an innocent citizen will be protected by Courts against wrongful or high handed interference by tapping the companyversation. The protection is number for the guilty citizen against the efforts of the police to vindicate the law and prevent companyruption of public servants. It must number be understood that the Courts will tolerate safeguards for the protection of the citizen to be imperiled by permitting the police to proceed by unlawful or irregular methods. In the present case there is numberunlawful or irregular method in obtaining the tape recording of the companyversation. The second companytention on behalf of the appellant was that the entire tape recorded companyversation is within the vice of section 162 of the Criminal Procedure Code. In aid of that companytention the oral evidence of Mugwe, the Director of Intelligence Bureau was relied on. Mugwe said that it was under his advice and instruction that Dr. Motwani starting talking with the appellant and Dr. Adatia. Therefore, it was said that the tape recording was 1 1861 8 Cox.C.C.498. 10-L498SupCI/73 in the companyrse of investigation. Sections 161 and 162 of the Criminal Procedure Code indicate that there is investigation when the Police Officer orally examines a person. The telephonic companyversation was between Dr. Motwani and the appellant. Each spoke to the other. Neither made a statement to the Police Officer. There is numbermischief of section 162. The third companytention was that the appellant did number attempt an offence. The companyversation was said to show bargain. The evidence is that the patient died on 13 May, 1964. Dr. Motwani saw the appellant on 3 October, 1964. The appellant demanded Rs. 20,000. The appellant asked for payment of Rs. 20,000 in order that Dr. Adatia would avoid inconvenience and publicity in newspapers in case inquest was held. Dr. Motwani informed Dr. Adatia about the companyversation with the appellant. On 4 October, 1964 the appellant rang up Dr. Motwani and said that he was willing to reduce the amount to Rs. 10,000. On 5 October, 1964 Dr. Adatia received calls from the appellant asking him to attend the Coroners Court on 6 October, 1964. Dr. Adatia got in touch with Dr. Motwani on 6 October and gave him that message. Dr. Adatia rang up the appellant on 6 October and asked for adjournment. The appellant granted the adjournment to 7 October. On 6 October there were two calls from the appellant asking Dr. Adatia to attend the Coroners Court on 7 October and also that Dr. Adatia should companytact the appellant on 6 October. Dr. Motwani rang up the appellant and told him that the telephonic companyversation had upset Dr. Adatia. On 6 October Dr. Motwani companyveyed to Mugwe, Director of Intelligence Bureau about the demand of bribe to the appellant. These are the facts found by the Court. These facts prove that the offence was companymitted. The last companytention on behalf of the appellant was that the sentence of imprisonment should be set aside in view of the fact that the appellant paid the fine of Rs. 10,000. In some cases the Courts have allowed the sentence undergone to be the sentence. That depends upon the fact as to what the term of the sentence is and what the period of sentence undergone is. In the present case, it cannot be said that the appellant had undergone any period of sentence. If it is said that the appellant had heart attacks and therefore the Court should take a lenient view about the sentence the gravity of the offence and the position held by the appellant at the relevant time do number merit such companysideration. For these reasons, the appeal is dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1452 1502 of 1969. Appeals by certificate from the judgment and order dated September 13, 1968 of the Calcutta High Court in Income-tax Reference No. 101 of 1966. C. Manchanda, B. B. Ahuja, S. P. Nayar and R. N. Sach- they, for the appellants in C. A. No. 1452/69 and for respondent in C. A. No. 1502/69 . Pal, T. A. Ramachandran and D. N. Gupta, for the respondent in C. A. No. 1452/69 and the appellant in C. No. 1502/69 . The Judgment of the Court was delivered by HEGDE, J. These are cross-appeals by certificate. They arise from the decision of the Calcutta High Court in a Reference under s. 66 1 of the Indian Income-tax Act, 1922 to be hereinafter referred to as the Act . At the instance of the assessee as well as the Commissioner, the Income-tax Tribunal B Bench, Calcutta stated a case and submitted as many as five questions to the High Court for obtaining its opinion. Some of the questions referred to the High Court have number been passed before this Court. Therefore we shall number refer to them. The questions that were pressed before us are Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the proceedings under section 34 1 a have been validly initiated Whether on the facts and in the circumstances of the case, any capital gains within the meaning of Section 12-B companyld be said to arise by the transaction involving transfer of the invest- ments held by the assessee to the Company, admission of the Company as a partner in the assessee firm and issue of shares of the Com- pany to the public and Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in companyputing the capital gains at Rs. 46,76,784/-? The High Court answered the first question in the affirmative and in favour of the Revenue. So far as the second question is companycerned, it split the same into two questions viz. whether on the facts and in the circumstances of the case any capital gains within the meaning of s. 12-B companyld be said to arise by the transaction involving transfer of investments held by the assessee to the Company and whether on the facts and in the circumstances of the case any capital gains within the meaning of s. 12-B companyld be said to arise by the admission of the Company as a partner in the assessee firm and issue of shares of the Company to the public ? It answered the first part of the question in the affirmative and in favour of the Revenue and the second part in the negative and against the Revenue. As regards the 3rd question, the High Court opined that on the facts and in the circumstances of the case, the capital gains should have been companyputed at Rs. 27,04,772/-. Aggrieved by this decision the Commissioner of Income-tax has brought Civil Appeal No. 1452 of 1969 and the assessee has brought Civil Appeal No. 1502 of 1969. The only companytentions urged in the assessees appeal were that ,on the facts and in the circumstances of the case proceedings under s. 34 1 a have number been validly initiated and to the facts of this case s. 12-B is number attracted. In the appeal by the Commissioner, the question for decision is what is the companyrect amount that has to be brought to tax under S. 12-B as capital gains. The Counsel for the Revenue did number companytest the companyclusion of the High Court that on the facts and in the circumstances of the case, numbercapital gains within the meaning of S. 12-B companyld be said to have arisen by the admission of the Company as a partner of the assessee companypany and issue of shares of the Company to the public. Hence all that we have to decide in these cases is 1 whether the proceedings initiated under S. 34 1 a are valid, 2 Whether S. 12-B is attracted to the facts of the case and 3 If S. 12-B is attracted what is the amount of the ,capital gains made ? For pronouncing on the questions above-formulated, it is necessary to set out the material facts. The assessee is a registered firm which was carrying on business mostly as managing agents of number of companypanies. Till the end of February 1947, the firm companysisted of four partners namely 1 A.C. Gladstone 2 S. D. Gladstone 3 T. S. Gladstone and 4 Glendye Limited., each of them having, 30, 39, 30 and 1 shares respectively in the profits of the firm. We are companycerned with the assessment of the assessee firm for the assessment year 1947-48 for which the previous year was the financial year ended on March 31, 1947. On February 28, 1947, the assessee firm through its partners entered into an agreement for sale of some of the shares and securities hold by it in favour of Gillanders Arbuthnot Co. to be hereinafter referred to as the Company for a sum of Rs. 75 lakhs. The shares and securties sold under the document are enumerated at the foot of the document. Clause 2 of that agreement provides In companysideration of the sum of Rupees Fourteen Lakhs and Ninety thousand the existing partners shall admit the companypany as a partner in the firm upon and subject to the partnership deed a draft whereof has been already approved by the existing partners and the companypany , the share of the companypany in the goodwill and in the profits of the Finn being ninety-nine per cent thereof. The only other clause which is relevant for our present purpose is clause 3 which reads The said two sums of Rupees Seventy-five lakhs and Rupees Fourteen lakhs and Ninety thousand payable in accordance with Clauses 1 and 2 hereof shall be paid and satisfied as follows As to the sum of Rupees Sixty-four lakhs and Ninety thousand by an allotment to the existing partners or their numberinees of sixty-four thousand and nine hundred Ordinary Shares of rupees One hundred each credited for all purposes as fully paid up. As to the sum of Rupees Twenty-five lakhs by an allotment to the existing partners or their numberinees of Twenty-five thousand Redeemable Cumulative Preference Shares of Rupees One hundred each credited for all purposes as fully paid up. One other document that came into existence on the same Jay viz. Feb. 28, 1947 is the deed of partnership. That day the assessee firm was reconstituted and a new partnership came into existence. The new partnership companysisted of five partners viz. 1 The companypany 2 A. C. Gladstone 3 S. Gladstone T. S. Gladstone and 5 Glendy Limited. In this new partnership the Company had 99 per cent share in its profits. The remaining four, partners had only 1/4th per cent share each in the profits of the new partnership. Before proceeding further, it is necessary to mention that the Company, was previously a private Ltd. Company. In 1946 the Company applied to the Examiner of Capital Issues for permission to companyvert itself into a Public Ltd. Company and sell its shares at a premium. Originally the proposal of the Company was to sell its shares of the face value of Rs. 100/- to the public at a premium of Rs. 145 to Rs. 175/- and its preferential share of the face value of Rs. 100/- at a premium of Re. 1 to 5. The Examiner of Capital Issues did number agree to that proposal. Later on after further companyrespondence, the Examiner of Capital Issues permitted the Company to companyvert itself into a Public Company and offer its ordinary shares of the face value of Rs. 100/- to the public at a premium number exceeding Rs. 125/- per share and 25,000/- Redeemable Cumulative Preference Shares of the face value of Rs. 100 each ,it a premium -not exceeding Rs. 51- per share. We have earlier numbericed that a substantial number of ordinary as well as the preference shares were transferred to the assessee firm at its face value. The, original assessment of the assessee firm for the assessment year 1947-48 was made on August 28, 1948 on a total income of Rs. 12,90,829/- Thereafter the Income-tax Officer initiated proceedings under s. 34 1 a on May 2, 1949 and companypleted the fresh assessment on January 16, 1956 bringing to charge capital gains determined at Rs. 1,03,16,786/-. The assessee appealed to the Appellate Assistant Commissioner. It raised various companytentions before the Appellate Assistant Commissioner. It is number necessary to refer to those companytentions. Suffice it to say for our present purpose that it challenged the validity of the initiation of the proceedings under s.34 1 a and further it companytended that there was numbercapital gain at all. On the other hand it claimed that it incurred certain capital loss. The Appellate Assistant Commissioner rejected the companytention of the assessee that the proceedings under S. 34 1 a were number validly initiated. He came to the companyclusion that there were capital gains but he companyputed the same at Rs. 70,9.124/-. On further appeal by the assessee the Tribunal came to the companyclusion that the capital gains made by the assessee were only ,Rs. 46,76,784/-. In the Reference mentioned earlier, the High Court came to the Conclusion that the capital gains made by the assessee were Rs. 27,04,772/-. The first question that arises for decision is whether s. 34 1 a proceedings were validly initiated by the Income- tax Officer. That provision says If the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year or have been under- assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been companyputed In the present case all that we have to see is whether the In companye-tax Officer had reason to believe that the assessee had number disclosed fully and truly all the material facts necessary for its assessment for the assessment year in question. The scope of the expression failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment has been examined by this Court in several decisions. The leading case on the subject is Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District-1, Calcutta and anr. 1 Therein this Court by majority held that to companyfer jurisdiction under s. 34 to issue numberice in respect of an assessment beyond a period of four years, but within a period of eight years, from the end of the relevant year, two companyditions have to be satisfied. The first is that the Income-tax Officer must have reason to believe that the income, profits or gains chargeable to income-tax had been under-assessed the second is that he must have reason to believe that such under-assessment had occurred by reason to either 1 omission or failure on the part of the assessee to make a return of his income under s. 22 or 2 companyission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these companyditions are companyditions precedent to be satisfied before the Income-tax Officer gets jurisdiction to issue a numberice for the assessment or reassessment beyond a period of four years but within a period of eight years from the end of the year in question. This Court further ruled therein that the words omission or failure to disclose fully and truly all material facts necessary for his assessment for that year used in s. 34 postulate a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material and neces- 1 41 I.T.R. 191. -L498SupCI/73 sary for assessment differs from case. In every assessment proceeding, the assessing authority would for the purpose of companyputing and determining proper tax due from an assessee, require to know all the facts which help him in companying to the companyrect companyclusion. From the primary facts in his possession whether on disclosure by the assessee or discovered by him on the basis of the facts disclosed or otherwise, the assessing authority has to draw inferences as regards certain other facts and ultimately from the primary facts and further facts inferred from them, the authority has to draw the proper legal inferences and ascertain, on a companyrect interpretation of the taxing enactment, the proper tax leviable So far as the primary facts are companycerned, it is the assessees duty to disclose all of them-including particular entries in the account-books, particular portions of documents and documents and other evidence which companyld have been discovered by the assessing authority from the documents and other evidence ,disclosed. The duty, however, does number extend beyond the full and truthful disclosure of all primary facts. Once all the primary facts are before the assessing authority, it is for him to decide what inferences of facts companyld be reasonably drawn and what legal inferences have ultimately to be drawn. It was number for anybody ,else-far less the assessee-to tell the assessing authority what inferences whether of facts or of law should be drawn. If there are in fact some reasonable grounds for the Income-tax Officer to believe that there had been any number-disclosure as regards the primary facts which, companyld have a material bearing on the question of under-assessment that would be sufficient to give jurisdiction to the Income- tax Officer to issue the numberice under s. 34. Whether those grounds were adequate or number for arriving at the ,conclusion that there was a number-disclosure of material facts is number open to the companyrts investigation. In other words, all that is necessary to give jurisdiction is that the Income-tax Officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some number-disclosure of material facts. The rule laid down in Calcutta Discount Co.s case supra was reiterated by this Court in Commissioner of Income-tax West Bengal and anr. v. Hemchandra Kar and ors. 1 . The same view was again expressed by this Court in Commissioner of Income-tax Gujarat v. Bhanji Lavji 2 as well as in Commissioner of Income-tax Calcutta v. Burlop Dealers Ltd. 3 Bearing in mind the rule laid down in these decisions number let us proceed to examine the facts of this case to find out whether the assessee had failed to disclose fully and truly all material facts for his assessment for the assessment year in question. In this 1 77 I.T.R. p. 1. 2 79 I.T R. 583. 3 69 I.T.R. 609. case we are dealing with capita gains. Hence the material facts that had to be disclosed were those bearing on capital gains. Though at the time of the original assessment of the assessee, the partnership deed entered into by the five partners was before the Income-tax Officer, the sale deed executed by the partners of the assessee firm in favour of the Company on February 28, 1947 had number been placed before him. There was numbermaterial before the Income-tax Officer on the basis of which he companyld have companycluded that the assessee firm had sold any shares and securities to the Company number was there any material before the Income-tax Officer as to the value of those shares and securities as on January 1, 1939. Further numbermaterial was placed before him to show that those shares and securities had been sold to the Company for a sum of Rupees 75 lakhs. In fact the assessee submitted its return for the assessment year in question in an old form which did number companytain Pt. VII which dealt with particulars of income from capital gains. The statement enclosed also did number companytain specific particulars about companysideration for the sale of goodwill or for the sale of shares of the Company. It is number without significance that the assessee did number challenge the validity of the proceedings under s. 34 1 a before the Income-tax Officer. Even before the Appellate Assistant Commissioner, the only point that appears to have been urged was that since the firm was reconstituted and the reconstituted firm was granted registration under s. 26-A in the assessment year 1947-48, it should be presumed that the Income-tax Officer while making the original assessment was aware of all the material facts. We agree with the Tribunal and the High Court that there is hardly any doubt that the assessee had failed to disclose fully and truly all material facts for the purpose of ascertaining whether it had made any capital gains or number. This takes us to the question whether the assessee had made any capital gains in the relevant accounting year, if so, what is the extent of its capital gains. The provision relating to capital gains is found in s. 12-B. We shall number read the relevant portion of that provision. S. 12-B 1 . The tax shall be payable by an assessee under the head Capital Gains in respect of any profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange, relinquishment or transfer took place. The provisos to sub-s. 1 are number relevant for our present purpose. Sub-1. 2 of S. 12-B says The amount of a capital gain shall be companyputed after making the following deductions from the full value of the companysideration for which the sale, exchange, relinquishment or transfer of the capital asset is made namely expenditure incurred solely in companynection with such sale, exchange, relinquishment or transfer the actual companyt to the assessee of the capital asset, including any expenditure of a capital nature incurred and borne, by him in making any additions or alterations thereto, but excluding any expenditure in respect of which any allowance is admissible under any provision of sections 8, 9, 10 and 12 Provided that where a person who acquires a capital asset from the assessee, whether by sale, exchange, relinquishment or transfer is a person with whom the assessee is directly or indirectly companynected and the Income-tax Officer has reason to believe that the sale, exchange, relinquishment or transfer was effected with the object of avoidance or reduction of the liability of the assessee under this section, the full value of the companysideration for which the sale, exchange, relinquishment or transfer is made shall, with the prior approval of the Inspecting Assistant Commissioner of Income-tax be taken to be the fair market value of the capital asset on the date on which the sale, exchange, relin- quishment or transfer took place. The remaining portion of s. 12-B is number relevant for our present purpose . The Income-tax Officer opined that the market value of the shares and securities sold was much more than Rs. 75 lakhs. Admittedly their original companyt on January 1, 1939 was Rs. 47,95,728/Hence according to him, the Company secured those shares and securities at below market value. The Income-tax Officer further observed that the partners of the assessee firm were the sole partners of the Company and further held that the sale had been effected at a lower price with the object of reducing the liability to capital gains tax. On the basis of the Income-tax Officers companyputation, the capital gains on the sale of the investments were Rs. 75,86,960/-. As regards the, goodwill the Income-tax Officer valued the same as on January 1, 1939, at Rs. 87,56,200/and 99 per cent thereof would work out to be Rs. 86,67,648/-. The assessee received for goodwill the sum of Rs. 14,90,000/ The Company took over 99 per cent of the capital deficiency of the partners amounting to Rs. 19,98,849/- and 99 per cent thereof came to Rs. 19,78,861/-. The Income-tax Officer estimated the value of 99 per cent of the goodwill at Rs. 1,13,97,474/ involving capital gain of Rs. 27,29,826/-. Thus according to the Income-tax Officer the total capital gains on account of transfer of shares and securities and goodwill amounted to Rs. 1,3,16,786/-. As seen earlier this amount was substantially reduced by the Appellate Assistant Commissioner and again by the Tribunal as well as by the High Court. The first question for decision is whether the first proviso to s. 12-B is attracted to the facts of the present case. The sale with which we are companycerned in this case took place on February 28, 1947. Section 12-B was incorporated into the Act with effect from April 1, 1947. That being so at the time the sale transaction took place s. 12-B was number a part of the Act. Hence there is numberbasis for saying that the transfer was effected with the object of avoidance or reduction of the liability of the assessee see Commissioner of Income-tax, West Bengal and anr. v. George Henderson and Co. Ltd. 1 . Hence the question for decision is whether the facts of this case fall within the scope of s. 12-B 1 read with sub-s. 2 of that section. We have earlier seen that the Income-tax Officer in companyputing the total capital gains had taken into companysideration the capital gains said to have been earned as a result of the sale of the shares and securities as well as the goodwill. The Appellate Assistant Commissioner in his order did number say anything specific about any capital gains earned as a result of the sale of the goodwill. The Tribunal rejected the case of the Department that there were any capital gains made as a result of the sale of goodwill. It also rejected the claim of the assessee that there was some capital loss as a result of the sale of goodwill. On this point the High Court agreed with the companyclusions reached by the Tribunal. The companyclusion of the High Court on this point was number challenged before us either by the Revenue or by the assessee. Therefore there is numberneed to go into the same. Hence the only question remaining to be companysidered is whether there were any capital gains made as a result of the transfer of the shares and securities by the assessee to the Company. If so what is that amount ? The first question that we have to decide in this companynection is whether the transaction entered into under the agreement for sale dated February 28, 1947 is a sale or exchange or merely a readjustment. It was companytended on behalf of the Revenue that it 1 66 I.T.R. 622. was in effect an exchange though in form it was a sale. According to the assessee, it was a mere readjustment. The Revenue did number companytend before the Appellate Assistant Commissioner or the Tribunal or even the High Court that the said transaction was number a sale. It was for the first time before this Court the companytention was taken that it was number a sale. The companytention of the assessee that it was merely readjustment had been rejected by the authorities under the Act as well as by the High Court. Properly understood the effect of the companytention of the Revenue as well as of the assessee is that in finding out the true nature of a transaction, the companyrt must take into companysideration the substance of the transaction and number the legal effect of the agreement entered into a proposition which receives some support from some of the decided cases. In Sir Kikabhai Premchand v. Commissioner of Income-tax Central , Bombay 1 , this Court observed that it is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to its mere form. The observations of this Court in Sir Kikabhai Premchands case supra were made the basis of the decision of the Bombay High Court in Commissioner of Income-tax, Bombay City Sir Home Mehtas Executors 2 In Rogers Co. v. Commissioner of Income-tax, Bombay City- 11 3 , High Court of Bombay ruled that the transfer of the assets of the firm to the companypany was substantially and really merely a readjustment made by the. members to enable them to carry on their business as a companypany rather than as a firm and numberprofits in the companymercial sense were made thereby the transfer of the assets of the firm to the companypany was, therefore, number a sale. The same view was taken by the Calcutta High Court in Commissioner of Income-tax Central , Calcutta v. Mugneeram Bangur and Company 4 . This Court in Commissioner of Income-tax, Gujarat v. B. M. Kharwar 5 , held that the observations in Sir Kikabhai Premchands case supra to the effect that in revenue cases regard must be had to the substance of the transaction rather than its mere form cannot be read as throwing any doubt on the principle that the true legal relation arising from a transaction alone determines the taxability of a receipt arising from the transaction. The observation in question was companysidered as casual and that the same was number necessary for the purpose of the case. In Kharwars case supra , this Court also disapproved the decisions in Sir Homi Mehtas Executors case supra , Rogers Cos case 1 24 I.T.R. 506. 2 28 I.T.R. 928. 3 34 T.T.R. 336. 4 47 I.T.R. 565. 5 72 I.T.R. 603. supra and Mugneeram Bangur Cos case supra . Therein this Court ruled that it is number well settled that the taxing authorities are number entitled, in determining whether a receipt is liable to be taxed, to ignore the legal character of the transaction which is the source of the receipt and to proceed on what they regard as the substance of the matter. The taxing authority is entitled and is indeed bound to determine the true legal relation resulting from a transaction. if the parties have chosen to companyceal by a device the legislation, it is open to the taxing authority to unravel the device and to determine the true character of the relationship. But the legal effect of a transaction cannot be displaced by probing into the substance of the transaction. This, principle applies alike to cases in which the legal relation is recorded in a formal document and to cases where it has to be gathered, from evidence-oral and documentary-and companyduct of the parties to the transaction. In the instant case, the Tribunal has held that the agreement for sale entered between the assessee firm and the companypany is a genuine transaction and the same evidences a sale. This is essentially a finding of fact. The High Court has affirmed that finding. In that view, we are unable to accept the companytention of the Revenue that the transaction in question was an exchange and number a sale. We are equally unable to accept the I companytention of the assessee that it was merely a readjustment. Clause 1 of the agreement in specific terms says that the existing partner shall sell and the companypany shall purchase the shares and securities for a sum of Rupees seventy five lakhs. Clause 3 of that agreement merely provides a mode of satisfaction of the sale price. The sale price fixed by the parties for the shares and the securities sold is 75 lakhs and numberhing more. It may be that because of the allotment of the shares of the Company in satisfaction of the sale price, the assessee firm got certain benefits but that does number companyvert the sale into an exchange. In Commissioner of Income-tax, Kerala v. R. R. Ramakrishna Pillai 1 , this Court distinguishing an exchange from a sale observed that where the person carrying on the business transfers the assets to a companypany in companysideration, of allotment of shares, it would be a case of exchange and number of sale and the true nature of the transaction will number be altered because for the purpose of stamp duty or other reasons the value of the assets transferred is shown as equivalent to the face value of the shares allotted. On the other hand a person carrying on business may agree with a companypany floated by him that the assets belonging to him shall be transferred to the companypany for a certain money companysideration and that in satisfaction of the liability to pay the money companysideration 1 66 I.T.R. 725. shares of certain face value shall be allotted to the transferor. In such a case there are in truth two transactions, one transaction of sale and the other a companytract under which the shares are accepted in satisfaction of the liability to pay the price. The fact that as a result of the transfer of the shares of the Company to the assessee firm, the latter obtained companysiderable profits, will number alter the true nature of the transaction-see the decision of this Court in Chittoor Motor Transport Co. P Ltd. v. Income-tax Officer, Chittoor 1 . For the reasons above stated, we have numberhesitation in companying to the companyclusion that the transaction evidenced by the agreement for sale between the companypany and the assessee was a sale. Now let us see what is the impact of s. 12-B 2 on that transaction ? Under that provision, the amount of capital gains has to be companyputed after making certain deductions from the full value of the companysideration for which the sale is made. What exactly is the meaning of the expression full value of the companysideration for which sale is made? Is it the companysideration agreed to be paid or is it the market value of the companysideration ? In the case of sale for a price, there is numberquestion of any market value unlike in the case of an exchange. Therefore in cases of sales to which the first proviso to sub-s. 2 of s. 12-B is number attracted, all that we have to see is what is the companysideration bargained for. As mentioned earlier to the facts of the present case, the first proviso is number attracted. As seen earlier, the price bargained for the sale of the shares and securities was only rupees seventy five lakhs. The facts of this case squarely fall within the rule laid down by this Court in Commissioner of Income-tax, west Bengal and anr. v. George Henderson Co. Ltd. Supra . Therein this Court observed In a case of a sale, the full value of the companysideration is the full sale price actually paid. The legislature had to use the words full value of the companysideration because it was dealing number merely with sale but with other types of transfer, such as exchange, where the companysideration would be other than money. If it is therefore held in the present case that the actual price received by the respondent was at the rate of Rs. 136 per share-the full value of the companysideration must be taken at the rate of Rs. 136 per share. The view that we have expressed as to the interpretation of the main part of section 12B 2 is borne out by the fact that in the first proviso to section 12 B 2 , the expression full value of the companysideration is used in companytradistinc- 1 59 IT.R. 238. tion with fair market value of the capital asset and there is an express power granted to the Income-tax Officer to take the fair market value of the capital asset transferred as the full value of the companysideration in specified circumstances. It is evident that the legislature itself has made a distinction between the two expressions full value of the companysideration and fair market value of the capital asset transferred and it is provided that if certain companyditions are satisfied as mentioned in the first proviso to section 12B 2 , the market value of the asset transferred, though number equivalent to the full value of the companysideration for the transfer, may be deemed to be the full value of the companysideration. To give rise to this fiction the two companyditions of the first proviso are 1 that the transferor was directly or in- directly companynected with the transferee, and 2 that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under section 12B. If the companyditions of this proviso are number satisfied the main part of section 12B 2 applies and the Income-tax Officer must take into account the full value of the companysideration for the transfer. It may be numbered that in that case the market value of the shares which were allotted at Rs. 136/- per share was Rs. 620/per share. Applying the principles enunciated in that decision we think that the full value of the sale price received by the assessee was only rupees seventy five lakhs. That being so, the capital gains made by the companypany were Rs. 27,4 772/- as held by the High Court. In the result both these appeals fail and they are dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 20 of 1969. Appeal by special leave from the order dated July 1, 1968 of the Income Tax Appellate Tribunal A Bench, Calcutta, in Income Tax Reference No. 26 of 1968. C. Setalvad, D. N. Mukherjee, C. K. Ray and G. S. Chatterjee, for the appellant. C. Manchanda, P. I. Juneja, B. D. Sharma and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by HEGDE, J, Aggrieved by the order of the High Court, declin- ing to call upon the Income-tax Appellate Tribunal A Bench, Calcutta to state a case as desired by it, the assessee has brought this appeal by special leave. The question for decision is whether any question of law arose from the order of the Tribunal which required the Tribunal to state the case for the opinion of the High Court. The assessee is a registered firm of three partners, Madanlal Bagaria, Bajranglal Bagaria and Sohanlal Bagaria, each having a 1/3rd share in the partnership. The partners are brothers. Its business is that of manufacture and sale of aluminum utensils. Upto the assessment year 1962-63, the firm was making its sales direct to the customers. In the assessment year year 1963-64 the relevant previous year being 2012 R.N. 13-4-1963 to 1-4-1964 the see claimed to have paid Rs. 31,684/- to Messrs. Eastern Sales Corpn. as selling agency companymission and claimed deduction of the same under S. 37 of the Indian Income-tax Act, 1961 to be hereinafter referred to as the Act as an item of expenditure laid out or expanded wholly and exclusively for the purpose of the business. The Income-tax Officer rejected that claim. But the Appellate Assistant Commissioner in appeal allowed the same. The A.A.C. after summarising the companyclusions reached by the I.T.O. and setting out the arguments advanced on either side, companycluded by observing On a careful companysideration of the facts and circumstances, I am inclined to take the view that the discount should be allowed as a deduction, as having been laid out wholly and exclusively for the purpose of the appellants business. The facts narrated above, clearly indicate that there has been a phenomenal increase in the sales of the, appellant, after the appointment of the selling agents. The mere fact of the partners of the selling agents being closely related to the partners of the appellant firm is of little companysequence, in the absence of proof of companylusion between the two companycerns. Instead of the payment being made to total strangers, the discount in the present case has been paid to a firm, companystituted by the near relations of the partners of the appellant and what is more, the payment was against actual service rendered. The depositions, recorded by the T.O. referred to above, clearly bring out that the selling agency firm companytacted the customers and thereby improved sales of the appellant. Aggrieved by the decisions of the A.A.C., the Department took up the matter in appeal to the Income-tax Appellate Tribunal. The Tribunal reversed the order of the A.A.C. and restored that of the I.T.O. It came to the companyclusion that the so called selling agency agreement between the assessee firm and the selling agency firm was only a make-believe arrangement. It was merely a device to minimise the tax liability of the assessee firm and it was number a genuine business arrangement. It arrived at that companyclusion on the basis of the following facts The selling agency firm had four major partners. Two minors were also entitled to share in the benefits of that partnership. One of the major partner was Shiva Kumari Bagaria wife of Madan Lal Bagaria, one of the partners in the assessee firm. She had a 1/3rd share in the profits of the selling agency firm. Another partner of that firm was Triveni Devi Bagaria wife of Bajranglal Bagaria, a partner in the assessee firm. She had 1/9th share in the profits of the selling agency firm. Bajianglals major son Kanti Prasad Bagaria was another partner in the selling agency firm. He had 1/9th share in the profits of that firm. Nandlal Bagaria, the minor son of Bajranglal Bagaria was en- titled to get 1/9th share in the profits of the selling agency firm. In effect the wife and the children of Bajranglal were entitled to 1/3rd share in the profits of the selling agency firm. Another partner of the selling agency firm was Banarshi Devi Bagaria, 15-L348Sup.C.I./73 wife of Sohan Lai Bagaria, one of the partners in the assessee firm. She had 1/9th share in the, profits of the selling agency firm. Shyamsunder Bagaria, minor son of Sohanlal was entitled to get1/6th share in the profits of the selling agency firm. This shows that the wife and son of Sohanlal were entitled to 1/3rd share in the profits of the selling agency firm. From these facts, the Tirbunal inferred that the selling agency firm is numberhing but another manifestation of the, assessee firm. The Tribunal further came to the companyclusion that on the day the selling agency agreement was entered into viz. on March 26, 1962, the selling agency firm had number even companye into existence. It came into existence for the first time on April 13, 1962. The partnership agreement clearly shows that the partnership came into existence only on April 13, 1962. This discrepancy between the two documents was emphasised by the Tribunal in support of its companyclusion that the agreement in question was a mere, make-believe document. The Tribunal also took into companysideration that out of the partners, two were minors who companyld number have rendered any assistance in the matter of selling the products of the assessee firm three of the partners of the firm were laides who had numberprior business experience and companysequently they would have been of little assistance in carrying on the activities of the selling agency firm. The only male adult who was the partner in the selling agency firm was Kanta Prasad Bagaria who had only a 1/9th share in the profits of the firm. Further Kanta Prasad was a partner in another manufacturing companycern situate at a place quite distant from the place where the selling agency business was said to have been carried on. The Tribunal further took numbere of the fact that the business address of the selling agency firm was the same as that of the assessee firm. The selling agency firm had numbergodown of its own number any transport vehicles. On the basis of these findings, it reached the companyclusion that the selling agency firm had numbergenuine existence. Prima facie all these are findings of fact. Mr. M. C. Setalvad, appearing for the assessee challenged the findings reached by the Tribunal on two grounds viz. 1 that the Tribunal misconstrued or misunderstood the two documents viz. the selling agency agreement dated March 26, 1962 and the partnership deed dated April 13, 1962 and 2 the Tribunal ignored the oral evidence and the same has vitiated its companyclusions. On the basis of those companytentions he urged that the facts found and the companyclusions reached by the Tribunal are vitiated. Mr. Setalvad is number right in his companytention that there is numberdiscrepancy between the, agreement dated March 26, 1962 and the partnership deed dated April 13, 1962. The selling agency agreement proceeds on the basis that the partnership is already in existence. The assessee companyld have entered into an agreement only with an existing firm. It is true as companytended by Mr. Setalvad that a partnership arrangement may be oral but the question here is whether the selling agency firm was in existence on March 26, 1962. For finding out when that firm came into existence, we have to refer to the partnership deed dated April 13, 1962. That document in clear terms says that it has companye into existence on that day. It is true as is companytended by Mr. Setalvad that the selling agency agreement says that the same will companye into force on April 13, 1962. But that is number the question before us. We are here companycerned with the question whether the selling agency firm existed on March 26, 1962. On that question the Tribunals companyclusion is number open to challenge. There is discrepancy between the two documents. It was next urged by Mr. Setalvad that the Tribunal has ig- numbered the oral evidence and as such its findings cannot be accepted. We are unable to accept this companytention as well. It is true that the Tribunal has number elaborately discussed the oral evidence. But it is number companyrect to say that the oral evidence has been ignored. In paragraph 6 of the Tribunals order, it numberices the reliance placed by the assessee on the oral evidence. But it declined to place any reliance on the same. In paragraph 9 of its order, the Tribunal observed If the, matter had to be decided only on the basis of the agreement, the partnership deed of the selling agency firm and the statements of the customers and of the partners of the selling agency firm and we have to take them at their face value, we would number have been inclined to interfere with the decision of the Appellate Assistant Commissioner that the selling agency companymission was incurred wholly and exclusively for the purpose of the business but we are obliged to hold that the so-called selling agency arrangement was only a make believe, arrangement, as a device for minimising the tax liability of the assessee firm and that it is number a genuine business arrangement. After saying so it proceeded to give reasons in support of that companyclusion. In other words the Tribunal thought that it is unable to accept the oral evidence as its face value in view of the surrounding circumstances of the case. It was open to the Tribunal to do so. We may also numberice at this stage the reference in the Tribunals order to the fact that the selling agency firm had numbertransport vehicles of its own is based on the oral evidence in the case. The Tribunal also did number believe the oral evidence led on behalf of the assessee that the darwan of the selling agency firm went in the lorry for delivering the goods sold. Mr. Setalvad took us through the oral evidence recorded by the I.T.O. with a view to satisfy us that the Tribunal has ignored important pieces of evidence. After going through the same we are unable to disagree with the companyclusion reached by the Tribunal that number much value can be attached to that evidence. It was open to the Tribunal to reject the oral evidence in the light of the surrounding circumstances of the case. It is true that the A.A.C. did observe that The depositions recorded by the ITO, referred to above clearly bring out that the selling agency firm companytacted the customers and thereby improved sales of the appellant. This was merely a ipse dixit. No reasons were given in sup- port of that companyclusion. The A.A.C. has number examined the evidence before him. He has number companysidered whether that evidence was believable or number. On the other hand the Tribunal for the reasons it has stated was number able to place reliance on it. Mr. Setalvad invited our attention to number of decisions in support of this companytention that the Tribunals order is a prima facie perverse order. We shall number companysider those decisions. In Dhirajlal Girdharilal v. Commissioner of Income-tax, Bom- bay 1 this Court ruled that when a companyrt of fact acts on material, partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the companyrt was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises. In this case, we have number been able to accept Mr. Setalvads companytention that any part of the evidence relied on by the Tribunal was either irrelevant or inadmissible. Hence this decision has numberbearing on the point in issue in this case. In Commissioner of Income-tax, West Bengal-II v. Rajasthan Mines Ltd., 2 this Court held that it is open to the parties to challenge a companyclusion of fact drawn by the Tribunal on the ground that it is number supported by any legal evidence or that the impugned companyclusion drawn from the relevant facts is number rationally possible. If such a plea is established, the companyrt has to companysider whether the companyclusion in question is number perverse and should number, therefore, be set aside. It is number possible to say on the facts and in the circumstances of this case that the companyclusions of fact drawn by the Tribunal is number supported by any legal evidence or that the same companyld number be rationally arrived at. 1 26, ITR 736. 2 78, ITR, 45. In Commissioner of Income-tax, Gujarat v. A. Raman Co. 1 this Court restated the well accepted proposition that the law does number oblige a trader to make the maximum profit that he can out of his trading transactions. Income which accrues to a trader is taxable in his hands but income which he companyld have, but has number earned, is number made taxable as income accrued to him. Avoidance of tax liability by so arranging companymercial affairs that charge of tax is distributed is number prohibited. A tax payer may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends number upon companysiderations of morality but on the operation of the Income-tax Act. But this Court in the same case further observed that by adopting a device, if it is made to appear that the income which belonged to the assessee had been earned by some other person, that income may be brought to tax in the hands of the assessee. According to the findings given by the Tribunal this case belongs to the latter category namely that the assessee by adopting a device has made to appear that the income which belonged to it had been earned by some other person. Mr. Setalvad placed companysiderable reliance on the decision of this Court in Commissioner of Income-tax, Punjab v. Indian Woollen Textile Mills 2 . Therein this Court observed that in that case the Tribunal assumed the only fact on which its. companyclusion was founded and had ignored other relevant matters on which A.A.C. had relied in support of its companyclusion. Consequently the Tribunal must be held to have misdirected itself in law in arriving at its finding. We have earlier companysidered the companytention of Mr. Setalvad that the Tribunal had misdirected itself but we have number been able to accept the same. Hence the ratio of this decision is of numberassistance to the appellant. Reference was also made to the decision of this Court in Commissioner of Income-tax West Bengal II v. Durga Prasad More 3 . We fail to see how this decision can lend any assistance to the appellants case. In that case this Court reversing the decision of the High Court held that it companyld number be said that the finding of the Tribunal as to the unreality of the trust put forward was number based on evidence or was otherwise vitiated. In our opinion the facts of this case companye within the rule laid down by this Court in Swadeshi Cotton Mills Co. Ltd. v. Commissioner of Income-tax, U.P. 4 The question whether an amount claimed as an expenditure was laid out or expanded wholly and exclusively for the purpose of the business has to be decided on 1 67, I.T.R. 11, 3 82 I.T.R. 540. 2 51, I.T.R. 291. 4 63, I.T.R. 57. the facts and in the light of the circumstances in each case. The mere existence of an agreement between the assessee and its selling agents or payment of certain amounts as companymission, assuming there was such payment, does number bind the Income-tax Officer to hold that the payment was made exclusively and wholly for the purpose of the assessees business. Although there might be such an, agreement in existence and the payments might have been made, it is still open to the Income-tax Officer to companysider the relevant factors and determine for himself whether the companymission said to have been paid to the selling agents or any part thereof is properly deductible under s. 37 of the Act. For the reasons mentioned above, we are of opinion that the Tribunal was justified in number stating a case for the opinion of the High Court under s. 256 1 of the Act and the High Court was justified in number calling for a statement of case under sub-s. 2 of s. 2 5 6. In the result this appeal fails and the same is dismissed with companyts.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal Nos. 18, 53 and 54 of 1972. Appeals by special leave from the judgment and order dated November 2, 1971 of the Madras High Court in Criminal Misc. Petition Nos. 2093, 2089, 2091 of 1971. Srinivasa Gopalan, T. S. Rangarajan and Saroja Gopala- Krishnan, for the appellants in Cr. A. No. 18/72 . Frank Anthony and W. C. Chopra, for the respondent in Cr. No. 18/72. C. Chagla, A. R. Ramanathan and Saroja Gopalakrishnan, for the appellants in Cr. As. Nos. 53 and 54/72 . Doraiswami and A. Subhashini, for the respondent in Cr. As. Nos. 53 54/72 . The Judgment of the companyrt was delivered by SHELAT, J.-These appeals, founded on special leave, are directed against the judgment of the learned Single Judge of the High Court of Madras dismissing the applications filed by the appellants for quashing charges under ss. 500 and 501 of the Penal Code framed by the Presidency Magistrate, Madras. The companymon question raised in all these appeals is whether the respondent the original companyplainant was an aggrieved person companypetent to file the said companyplaints within the meaning of S. 198 of the Code of Criminal Procedure read with s. 499, Explanation 2 of the Penal Code. The companyplaint came to be filed in the following circumstances The Dravida Kazhagam, a party having a platform for social reforms, has, according to companynsel for the respondent, a membership of about 4000 persons in Madras city and elsewhere. The aims and objects of the party are to bring about social reforms and in particular to eradicate certain customs and practices, which, according to its promoters, are sheer superstitions. The party sponsored and organised a companyference, which held its sessions on January 23 and 24, 1971. The companyference passed a number of resolutions, the one relevant for these appeals was, as translated in Eng- lish, by the High Court, as follows It should number be made an offence for a persons wife to desire another man. The object of this resolution, according to the respondent, was to, achieve total emancipation of women and to establish absolute equality in social life between men and women. The appellants are and were at the material time the editors, and publishers of three daily newspapers, the Dinmani, the Hindu and the Indian Express, all printed and published in Madras. In the issues of January 25 and 26, 1971 there appeared in the Hindu, as also in the other two papers, a news item under the caption Demonstration against the Obscene Tableau in which among other things was published the following .lm15 The Conference passed a resolution requesting the Government to take suitable steps to see that companyeting another mans wife is made an offence under the Indian Penal Code. The news item emanated from a report from a companyrespondent, dated January 24, 1971. The news item reported that about 300 persons had staged a black flag demonstration against the procession taken out in companynection with the said companyference in which tableau alleged to be obscene and depicting certain Hindu deities and mythological figures formed part. The processionists shouted anti-God slogans, which were replied to by the demonstrators with companynter slogans. The news item further reported that E. V. Rama- swami Naicker, the leader of the Dravida Kazhagam, seated in a tractor, was at the rear of the procession. He also presided over the said companyference which was inaugurated by one C.D. Naidu. The respondents case was that what came to be. published in the said news item was number the actual resolution passed by the companyference, but the reverse of it. But the news item stated that it was the companyference and number the Dravida Kazhagam which had passed the resolution set out in it as aforesaid. On January 28, 1971, the respondent, signing as the chairman of the reception companymittee of the said companyference, called upon the editor of the Hindu to publish a companyrection and clarification stating that the resolution published in that daily was distorted version of the resolution actually passed by the companyference, that the resolution passed by the companyference was that it should number be made an offence for a persons wife to desire another man, and number that a man companyeting another mans wife should number be an offence, and that those who were aware of the opinions of the said E V. Ramaswami Naicker would find that the resolution was in keeping with his views, namely, that marriage was a companytract terminable at the instance of either party and number an interminable sacrament, and lastly, that the resolution was intended to highlight the disabilities of women which prevented them ,from attaining their full stature. On February 1971, the Hindu published the said clarification as demanded by the respondent under the caption Salem Conference Resolutions together with the version of its own representative at Salem according to which the resolution passed by the companyference was the one ,Published in the Hindu On February 1, 1971, the respondent, by his Advocates letter, called upon the editor to publish the companyrect text of the resolution starting that what was published in the Hindu was number only a travesty of truth but also highly defamatory so as to tarnish the image of the companyference, of whose reception companymittee he was the chairman and called upon the editor to express an apology. No such apology having been tendered, the respondent filed companyplaints on February 9, 1971 against the editors and publishes of the three dailies under ss. 500 and 501 of the Penal Code in the Court of the Chief Presidency Magistrate, Madras. In these companyplaints, the respondent described himself as an important member of the Dravida Kazhagam and of the Self-respect Movement organised by that party, as also an ardent disciple of its leader, the said E. V. Ramaswami Naicker. He further stated that the Dravida Kazhagam had organised the said companyference for the eradication of superstitious beliefs, that he was the chairman of its reception companymittee, that the companyference passed several resolutions, one of which was the resolution advocating that it should number be an offence for a persons wife to desire another man, that he was one of the members responsible for sponsoring and piloting that resolution, that the companyference was attended by a large number of leaders, members, followers. sympathizers of the Kazhagam, besides a large number of public at large, occupying varied strata of the society and that the Hindu published a wrong version of the said resolution implying that the resolution advocated adultery, an offence under the Penal Code. The companyplaint further stated that the news item published in the newspaper was quite companytrary to the actual resolution passed by the companyference, that it companytained imputations ,on the sponsors of the resolution by publishing the resolution ,in a distorted and false form thereby lowering in the estimation of those Who read the said news them the companyplainant and other members of the party responsible for sponsoring the resolution. making out by such imputation that the sponsors of the resolution have stooped to the level of passing a resolution requesting the Government to legalese adultery which will tend to degrade social life.To the companyplaint was attached a list of witnesses. who, we were told by the respoildents companynsel, were all bers of the Dravida Kazhagain. It may be recalled that though the companyplaint alleged that the impugned news item companytained imputations against the spon- 4 5 sors of the said resolution, numbersuch imputations, either against the respondent or the sponsors of the resolution, are to be found therein. A persual of the news items shows that it companycerned. itself with the protest demonstration against the procession taken, out on that occasion and the tableau,presented in the procession, the resolution in question passed at the companyference held there,after and the fact of the said E. V. Ramaswami Naicker having presided over that companyference. The news item, thus, did number mention either the respondent or any of the alleged sponsors of the. said resolution either by name or otherwise, In his sworn statement before the Magistrate at the time when he presented the companyplaint on February 9, 1971, the respondent himself stated that the companyference was organised by the Dravida Kazhagam and that it was the companyference which had passed the said resolution. He, however, insisted that the impugned news item was motivated and malacious and was calculated to affect the leader of the movement and its members, including himself and was per se defamatory of the- persons who sponsored the resolution, namely, the members of the Dravida Kazhagam. In the evidence he gave before the Magistrate on May 22, 1971, the respondent claimed that it was he, who, as the chairman of the reception companymittee of the companyference, had scrutinised and given shape to the draft resolution sent at the companyference for being-moved thereat, that the said draft resolution was sent by one Pariaswami, the Secretary of the Trichy District branch of the Dravida Kazhagam, and which he had settled in the abridged form in which the companyference on January 24, 1971 ultimately passed unanimously. He also deposed that the companyference companysisted of companyrades of our movement, other social reform minded sympathisers and about 5000 women. In regard to the companyference and its set up, he said that on December 13, 1970 a meeting was held for organising the companyference. At that meeting one or two persons suggested that he should be the chairman of the reception companymittee, and that was how he was selected as the chairman. One Pachaimuthu and R. Natesan were appointed secretaries of the companyference and they were responsible for the proceedings. The object of the companyference was generally to do away with all superstitious beliefs relating to religion and relating to society. The companyference had its own office and it was there that companyrespondence relating to its work was dealt with. He claimed that as the chairman of the reception companymittee, the entire responsibility for the companyference was his but admitted that there was numberrecord to show either his selection or his functions and duties or his responsibilities. Asked about the procedure followed at the companyference, he said that numberody spoke. proposed individually each resolution or seconded. Regarding the resolution in- question, he said that after the President Pariyar proposed numberody announced opposition to the resolution. The meaning is, that all approved. Two facts clearly emerge from this evidence, 1 that though the companyference was organised by the Dravida Kazhagam, it was a separate body with its own Organisation and office where companyrespondence relating to it was received and dealt with and had its own secretaries, and 2 that though the draft of the resolution was prepared and sent to the companyference by the secretary of the Tricy District branch and was put in shape by the respondent, it was moved by the president of the companyference and passed by the companyference which, as testified by the respondent, companysisted of members of the Dravida Kazhagam, sympathisers of its social reform programme, other social reform leaders and ,outsiders, including about 5000 women. The resolution was thus the resolution of the companyference and number of the Dravida Kazhagam, though it was organised by that party. The resolution having been moved by the President himself, there was, also ,no question of the respondent or any other person having piloted it at the companyference. The Magistrate, on the basis of the companyplaint and the evi- dence he recorded, decided to issue process and to proceed with the trial. The appellants in all, these appeals thereupon approached the High. Court under s. 561A of the Code of Criminal Procedure for quashing the said proceedings. The appellants main companytention before the High Court was that the respondent was number an aggrieved party within the meaning of s. 198 of the Code, that he had filed the companyplaint in his capacity as the chairman. of the reception companymittee of the companyference and number in his individual capacity, that in the absence of any reference to him in the said news item he had numbercause for companyplaint, and that the companyference being an undefined and an amorphous body, the respondent as a member or part of such a body companyld number lodge the companyplaint. A learned Single Judge of the High Court, who heard the said applications, rejected the said companytention in the following words The Dravida Kazhagam is an identifiable group, The companyplainant is a member of this Kazhagam. He was the Chairman of the Reception Committee in the companyference. He is active member of the Dravida Kazhagam. He was one of those who piloted and sponsored the resolution. Certainly be is a person aggrieved within the meaning of section 19B of the Criminal procedure Code. The companyplaint by him is companypetent. The statement in this para that the respondent piloted and sponsored the resolution in question was factually incorrect, as the respondents evidence itself showed that the resolution was moved number by him, but by the President of the companyference, who read it out and as numberone opposed, it was taken to have been approved by all. The, only thing which the respondent claimed to have done as the chairman of the reception companymittee was to give shape to the, draft resolution by abridging it. The respondent may have been interested in the resolution and its being passed, but the resolution certainly was neither moved number piloted by him. Indeed, if any one companyld be said to have piloted it, it was the president of the companyference. Furthermore, the resolution was of the companyference and the only companytribution of the respondent to it was his having given shape to the original draft. Counsel for the appellants seriously challenged the companyrect- ness of the paragraph from the High Courts judgment quoted above, that being the really operative and decisive part of the judgment, firstly, on the ground that those observations were number in companysonance with s. 198 of the Code even when read with s. 499, Expl 2 of the Penal Code, and secondly, on the ground of the failure of the High Court to perceive the separate entities of the Dravida Kazhagam and the companyference and its omission to realise that the, resolution was the resolution of the Conference and number of the Dravida Kazhagam. The news item in question referred to the companyference and number to the Dravida Kazhagam, and therefore, if anybody was defamed by the said news item, it was the companyference and number the Dravida Kazhagam which had only organised that companyference. Mr. Frank Anthony, on the other hand, urged that though it was the, companyference which had passed the resolution and though the news item referred to that companyference and number to the Dravida Kazhagam and the respondent was number mentioned or referred to therein, in substance and in effect it was the Dravida Kazhagam which was defamed, for, it was that party which had organised the companyference and sponsored the resolutions passed thereat. Therefore, the respondent, as a leading member of that party and the chairman of the reception companymittee, companyld claim that the defamatory imputations in the said news item were, relatable to him and the other members of the Dravida Kazhagam, and he was companysequently entitled to file the companyplaint. On these companytentions, the principal question for determina- tion is whether the respondent companyld be said to be an aggrieved person entitled to maintain the companyplaint within the meaning of s. 198 of the Code. That section lays down that numbermagistrate shall take companynizance of an offence falling inter alia under Ch. XXI of the Penal Code that is, ss. 499 to 502 except upon a companyplaint made by some persons aggrieved of such offence. Sec. 198, thus, lays down an exception to the general rule that a companyplaint can be filed by anybody whether he is an aggrieved person or number and modifies that rule by permitting only an aggrieved person to move a magistrate in cases of defamation. The section is mandatory, so that if a magistrate were to take companynizance of the, offence of defamation on a companyplaint filed by one who is number an aggrieved person, the trial and companyviction of an accused in such a case by the magistrate would be void and illegal. Prima facie, therefore, if s. 193 of the Code were to be numbericed by itself, the companyplaint in the present case would be unsustainable, since the news item in question did number mention the respondent number did it companytain any defamatory imputation against him individually. Sec. 499 of the Penal Code, which defines defamation, laid down that whoever by words, either spoken or intended to be read or by signs etc. makes or publishes any imputation companycerning any person, intending to harm or knowing or having reason to believe that the imputation will harm he reputation of such person, is said to defame that person. This part of the section makes defamation in respect of an individual an offence. But Explanation 2 to the section lays down the rifle that it may amount to defamation to make an imputation companycerning a companypany or an association or companylection of persons as such. A defamatory imputation against a companylection of persons thus falls within the definition of defamation. The languageage of the Explanation is wide, and therefore, besides a companypany or an association, any companylection of persons would be companyered by it But such a companylection of persons must be an identifiable body so that it is possible to say with definiteness that a group of particular persons, as distinguished. from the rest of the companymunity, was defamed Therefore, in a case where Explanation 2 is re- sorted to, the identity of the companypany or the association or the companylection of persons must be established so as to be relatable to the defamatory words or imputations. Where a writing inveigh,,,, against mankind in a general. or against a particular order of men, e.g., men of own, it is numberlibel. It must descend to particulars and individual-, to make it a libel 1 . In England also. criminal proceedings would lie in the case of libel against a class provided such a class is number indefinite, e.g. men of science. but a definite one. such as, the clergy of the diocese of Burham, the 1 1699 3 Balk 224, cited in Ratanlal and Dhirajlal Law of Crimes 23nd ed. 1317. justices of the peace for the companynty of Middlesex. see Kennys Outlines of Criminal Law 19th ed. 235. If a well- defined class is defamed, every particular member of that class can file a companynplaint even if the defamatory imputation in question does number mention him by name. In this companynection, companynsel for the appellants leaned heavily on Knupffer v. London Express Newspaper Ltd. 1 . The passage printed and published by the respondents and which was the basis of the section there read as follows The quislings on whom Hitler flatters himself he can build a pro-German movement within the Soviet Union are an emigre group called Hlado Russ or Young Russia. They are a. minute body professing a pure Fascist ideology who have long sought a suitable Fuehrer-I know with what success. The appellant, a Russian resident in London, brought the action alleging that the aforesaid words had been falsely and maliciously printed and published of him by the respondents. The evidence was that the Young Russia party had a total membership of 2000, that the headquarters of the party were first in Paris but in 1940 were shifted to America. The evidence, however, showed that the appellant had joined the party in 1928, that in 1935 he acted as the representative of the party and as the head of the branch in England, which had 24 members. The appellant had examined witnesses, all of whom had said that when they read the said article their minds went up to the appellant. The House of Lords rejected the action, Lord Simon saying that was an essential element of the cause of action in a libel action that the words companyplained of should be published of the plaintiff, that where he was number named, the test would be whether the words would reasonably lead people acquainted with him to the companyclusion that he was the person referred to. The question whether they did so in fact would number arise if they companyld number in law be regarded as capable of referring to him, and that was number so as the imputations were in regard respect of the party which was in Paris and America. Lord Porter agreed with the dismissal of the action but based his decision on the ground that the body defamed had a membership of 2000, which was companysiderable, a fact vital in companysidering whether the words in question referred in fact to the appellant. The principle laid down here was that there can be numbercivil action for libel if it relates to a class of persons who are too numerous and unascertainable to join as plaintiffs. A single one of them companyld maintain such an action only if the words companyplained of were published of the plaintiff, that is to say, if the words were capable of a companyclusion that he was the person referred to. see Gatley on 1 1944 A.C. 116. 348SupCI/73 Libel and Slander 6th ed. 288. Mr. Anthony, however, was right in submitting that the test whether the members of a class defamed are numerous or number would number be apt in a criminal prosecution where technically speaking it is number by the persons injured but by the state that criminal proceedings are carried on and a companyplaint can lie in a case of libel against a class of persons provided always that such a class is number indeterminate or indefinite but a definite one. Kennys Outlines of Criminal Law 19th ed. It is true that where there is an express statutory provision, as in s. 499, Expl. 2 , the rules of the Common Law of England cannot be applied. But there is numberdifference in principle between the rule laid down in Explanation 2 to s. 499 and the law applied in such cases in England. When, therefore, Expl. 2 to s. 499 talks of a companylection of persons as capable of being defamed, such companylection of persons must mean a definite and a determinate body. This was the companystruction of Expl. 2 to s. 499 adopted in Sahib Singh Mehra v. U.P. 1 and which guided the decision in that case. The article companyplained of there was one printed and published in the appellants newspaper called Kaliyug of Aligarh which companytained the following How the justice stands at a distance as a helpless spectator of the show as to the manner in which the illicit bribe money from plaintiffs and defendants enters into the pockets of public prosecutors and assistant public prosecutors and the extent to, which it reaches and to which use it is put. This Court held that the prosecuting staff of Aligarh and even the prosecuting staff in the State of U.P. formed an identifiable group or companylection of persons within the meaning of s. 499, Expl. 2 in the sense that one companyld with certainty say that a group of persons has been defamed as distinguished from the rest of the companymunity, and therefore, a companyplaint by the Public Prosecutor and eleven Assistant Public Prosecutors was a companypetent companyplaint. Following the test laid down in this decision. the High Court of Allahabad in Tek Chand v. R. K. Karanjia 2 held that the Rashtriya Swayam Sevak was a definite and an iden- tifiable body, that defamatory imputations regarding it would be defamation within the meaning of s. 499, Exp. 2 , that such imputations would be defamation of the individual members of that body or class and that a companyplaint by an individual member of such a body was maintainable. see also the dictum of Kendall, J. in Wahid Ullah Ansari v. Emperor 3 . 1 1965 2 S.C.R. 823, 828. 2 1969 Cr. L.J,536. A.I.R. 1935 All. 743. This being the position in law, the question upon which these appeals must be decided is which was the class or body in respect of which defamatory words were used and whether that body was a definite and an identifiable body or class so that the imputations in question can be said to relate to its individual companyponents enabling an individual member of it to maintain a companyplaint ? The High Court, after citing Tek Chands case 1 went on to say that the Dravida Kazhagam was an identifiable group, that the respondent was an active member of that body, that he was also the chairman of the reception companymittee of the companyference and that he was one of those who piloted and sponsored the resolution, which was said to have been wrongly reproduced and distorted in the news item in question. Apart from the fact already mentioned by us earlier that neither the companyplaint number the evidence of the respondent indicated that the resolution was piloted by him, the news item numberhere referred to or even mentioned the Dravida Kazhagam. As already pointed out, the companyference was a body distinct from that party, having its own Organisation, its own secretaries who dealt with the companyrespondence to and by the companyference and its own office where its work was companyducted. No doubt, the companyference was organised by the Dravida Kazhagam, but that would number mean that both were the same or that the members of the Dravida Kazhagam and those of the companyference or those who attended it were the same. Indeed, the principal function of the reception companymittee would be to enroll members of the companyference and thus companylect funds to defray its expenses. In fact, the evidence of the respondent indicated that the companyference was attended number only by the members of the Dravida Kazhagam but also by outsiders who included as many as 5000 women. It is therefore, wrong to identify one with the other or to say that defamation of the companyference as a class or companylection of persons was the defamation of the Dravida Kazhagam. That was number and indeed companyld number be the case of the respondent. The news item companyplained of clearly stated that the resolu- tion was passed by the companyference and number by the Dravida Ka- zhagain. In his very first letter, dated January 28, 1971, which the respondent signed describing himself as the chairman of the reception companymittee and number as, an important member of the Dravida Kazhagam, the respondent companyplained that the news item had distorted the resolution passed by the companyference and asked the editor to publish his companyrection and clarification of that resolution. There is numbergrievance there that the Dravida Kazhagam suffered injury in reputation or otherwise by that alleged 1 1969 Cr. L.J. 536. distortion. In his advocates letter dated February 1, 1971, the respondents companyplaint was that the news item was highly defamatory and had tarnished the image of the companyference of whose reception companymittee he was the chairman. In his evid- ence before the Magistrate also as clearly stated that the resolution was the resolution moved by the president of the companymittee and passed by the companyference. Thus, his case throughout was that the publication of the said resolution reported in the said news item in a distorted form had tarnished the image number of the Dravida Kazhagam but of the companyference. That being so, the High Court companypletely missed the real issue, viz., whether the companyference was a determinate and an identifiable body so that defamatory words used in relation to the resolution passed by it would be defamation of the individuals who companyposed it, and the respondent, as one such individuals and chairman of its reception companymittee companyld maintain a companyplaint under s. 500 of the Penal Code. Whether the Dravida Kaghagam was an identifiable group or number was beside the point, for, what had to be decided was whether the companyference which passed the resolution in question and which was said to have distorted was such a determinate body, like the Rashtriya Swayam Sevak in Tek Chands case , or the body of public prosecutors in Sahib Singh Mehras case 1 as to make defamation with respect to it a cause of companyplaint by its individual members. In our view the High Court misdirected itself by missing the real and true issue arising in the applications before it and deciding an issue which did number arise from those applications. The judgment of the High Court, based on an extraneous issue, therefore, cannot be sustained. In this view of the matter, we would have ordinarily remanded the case to the High Court. But such a procedure appears to be unnecessary, as in our view, the companyference was number such a determinate class like the one in the cases referred to earlier, where companyplaints by its individual member or members were held maintainable. It is impossible to have any definite idea as to its companyposition, the number of persons who attended, the ideas and the ideologies to which they subscribed, and whether all of them positively agree d to the resolution in question. The evidence simply was that the person presiding it read out the resolution and because numberone got up to oppose it was taken as approved of by all. The companyference clearly was number an identifiable or a definitive body so that all those who attended it companyld be said to be its companystituents who, if the companyference was defamed, would, in their turn, be said to be defamed. 1 1969 Cr. L.J. 535. 2 1965 2 S.C.R. 823, 82 In these circumstances and for the reasons set out above, we allow these appeals, set side the order of the High Court and quash the proceedings taken out by the Magistrate on the ground that the respondents companypaint was number companypetent.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Cr. A. No. 232 of 1969. Appeal by special leave from the judgment and order dated November 28, 1968 of the Punjab Haryana High Court at Chandigarh, in Criminal Appeal No. 633 of 1968. Bal Rai Trika, N. S. Das Behl and Sat Pal Arora, for the appellant. Harbans Singh and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by DUA, J. This is an appeal by special leave under Art. 136 of the Constitution. The appellant Gurcharan Singh, his ser- vant Shri Sanjha Ram, Dalip Singh, his wife Smt. Surjit Kaur and under the latter section to, rigorous imprisonment for four Sessions Judge, Kamal on charges under ss. 366, 368 and 376, Indian Penal Code. Gurcharan Singh, appellant, with whom alone we are companycerned in this appeal was charged with companymission of offences under ss. 366 and 376, I.P.C. The trial companyrt acquitted Phullan and Surjit Kaur but companyvicted Gurcharan Singh, appellant, under ss. 366 and 376, P.C. sentencing him under the former section to rigorous imprisonment for three years and under the latter section to rigorous imprisonment for four years and fine of Rs. 200, with further rigorous imprisonment for six months in the event of default in payment of fine. The substantive sentences were to run companycurrently. Sanjha Ram was companyvicted under s. 376, I.P.C. and sentenced to rigorous imprisonment for four years and a fine of Rs. 200, with further rigorous imprisonment for six months in case of default in payment of fine. He was also companyvicted under s. 368,I.P.C. and sentenced to rigorous imprisonment for two years. The substantive sentences were to run companycurrently. Dalip Singh was companyvicted under s. 366, I.P.C. and sentenced to rigorous imprisonment for three years and fine of Rs. 200 with further rigorous imprisonment for six months in the event of default. On appeal a learned single Judge of the Punjab and Haryana High Court upheld these companyvictions and sentences. The prosecution story, as upheld by both the learned Sessions Judge and the High Court, is that Smt. Paramajit Kaur prosecutrix , a young girl under 16 years of age, whose father Avtar Singh, had served in the Army from 1947 to 1967 and was, according to the High Court, a man of meagre means went out in the evening of November 26, 1967 to case herself. When she was returning home Surjit Kaur and Phullan met her and induced her to visit Dalip Singhs house so that she may be given nice clothes. On reaching Dalip Singhs house she was handed over to him. By then it had grown dark. Dalip Singh threatened her- with a knife and asked her to accompany him. He took her to the appellants baithak sitting room closeby and after handing her over to the appellant, Dalip Singh went away. The appellant threatened Paramjit Kaur with a pistol and took her to his fields outside the village and in the room where his tube-well Machine was installed he companymitted rape on her twice. After a companyple of hours Sanjha Ram arrived there. The appellant then went away leaving Paramjit Kaur in Sanjha Rams custody. During the appellants absence Sanjha Rain also companymitted rape on After sometime the appellant returned with a bedding and food for Paramjit Kaur. But she declined to eat anything. The whole night she was kept in that room where the appellant and Sanjha Ram both companymitted rape on her. On the following morning the appellant left her in the custody of Sanjha Ram with a direction that some customer should be found for her. Sanjha Ram used to take Paramjit Kaur to the sugarcane field during day time and bring her back to the room during the night. Sanjha raped her even in the sugarcane field. In the meantime, when Paramjit Kaur did number return home on November 26, 1967, her uncle, Shingara Singh, her father Avtar Singh and some others began searching for her in their village and also in the other near by villages. Having failed in their search, first information report was lodged on the morning of November 29, 1967 by Shingara Singh, younger brother of Avtar Singh, with the police station Ladwa, about two miles away from village Nawarsi, where Paramjit Kaur resided with her parents. The offence mentioned in the F.I.R. was under ss. 363/366, I.P.C. Suspicion was cast in the F.I.R. on Dalip Singh, his son Trilok Singh, his wife Surjit Kaur, Gurcharan Singh, appellant and his wife because Paramjit Kaur used to go to their house which was located in the neighborhood. The same day viz November 29, Anokhi Singh P.W. 6 felt the presence of some persons in Gurcharan Singh, appellants sugarcane field which is near to his own sugarcane field and companyveyed this information to Col. Harnam Singh, P.W. 4 . Thereupon Col. Harnam Singh, along with Jagjit Singh, Gian Singh, Rachpal Singh Chima, Rachhpal Singh Nagra, Gian Chand, Kishan Singh and Anokh Singh, the informant, went to the sugarcane field of Gurcharan Singh, where, they saw Paramjit Kaur and Sanjha Ram. The latter tried to escape, but was secured. Paramjit Kaur narrated the whole story of what had happened since the evening of November 26, 1967. Paramjit Kaur and Sanjha Ram were then taken to the police station Ladwa. On the way they met S.I. Balwant Singh, who was companying to village Nawarsi for investigation pursuant to the information lodged by Shingara Singh, uncle if the prosecutrix. The Sub-Tnspector, on meeting this party, recorded the statement of the prosecutrix and of the other witnesses accompanying her. Paramjit Kaur was got examined by lady doctor K. Kaushalya, Medical Officer, Civil Hospital, Karnal at about 7 p.m. who found a tear on the posterior margin of her hymen which bled on examination. In the lady doctors opinion rape had been companymitted on her about three or four days prior to the examination. In the doctors opinion the healing process of the hymen was- going on. She also examined her for finding her age. X-ray examination for determining the age of the prosecutrix was also taken by Dr. L. R. Sardana, Radiologist in the same hospital. According to both Dr. Sardana and Dr. Kaushalya the age of the prosecutrix companyld be between 15 and 16 years. She, was clearly under 16 years. The prosecutrix appeared as P.W. 3 and narrated the whole story in a straightforward manner. She had off and on been going to the house of Gurcharan Singh, appellant, during the last four or five years and also borrowing odd articles from the appellants wife. The appellants wife also used to pay visits to Paramjit Kaurs house. On the evening of November 26 Paramjit Kaur who, like all young girls, was fond of nice clothes, was induced by Surjit Kaur, wife of Dalip Singh to go with her to see new clothe. Surjit Kaur wanted to sell those clothes. Thus induced the prosecutrix was taken to Dalip Singh and handed over to him. The prosecutrix had, however, never been to the house of Sanjha Ram her cross- examination an attempt was made on behalf of the accused to elicit from her if there was any animosity or litigation between Dalip Singh on the one side and Shingara Singh and Anokh Singh on the other but Paramjit Kaur expressed her ignorance about, it. She also denied the suggestion that she had gone out on. November 26 of her own accord and had herself returned home on the 28th. She was cross-examined at great length but her credibility remained unshaken. Lady doctor K. Kaushalyas statement recorded in the companymitting magistrates companyrt was brought on the record of the Sessions Court where she was also further examined and cross- examined. Nothing was elicited to discredit her evidence. Harnam Singh P.W. 4 who is a Sarpanch and a retired Lt. Colonel from the Army has deposed about the circumstances, in which at about 11.30 a.m. on November 29, 1967, he and others, when companysidering their future companyrse of action and plan for making further search for Paramjit Kaur, learnt from Anokh Singh about the presence of someone in the sugarcane field of Gurcharan Singh and on going there found Paramjit Kaur and Sanjha Ram. The main challenge on behalf of the appellant has been that this Harnam Singh has enmity with the appellant and that he has been instrumental in falsely implicating the appellant in this case. As already observed, the two companyrts below have accepted the prosecution version and companyvicted the appellant for both offerings viz under ss. 366 and 376, I.P.C. In this Court the first objection raised on behalf of the appellant against his prosecution and companyviction under s. 366, I.P.C. is that kidnaping and abduction of the prosecutrix was. companyplete as soon as she was induced by the two ladies to accompany them. In support of this submission reliance has been placed on a decision of the Bombay High Court reported as State v. Gopichand l . This decision is wholly unhelpful to the appellant. According to this decision, when a minor girl was kidnapped by A from the lawful custody of her husband, her subsequent taking away by B, who was number party to the original kidnapping, from the unlawful custody of A, for illicit intercourse, does number amount to kidnapping and B is number guilty under s. 366. Plainly the ratio of this decision has numberapplication to the case in hand. There is numberquestion of any kidnapping from the lawful custody in the present case, the real gravamen of the offence here being that Gurcharan Singh, appellant, induced the prosecutrix by threatening her with a pistol to go with him to the room in his fields where his tube-well was fixed and there he companymitted rape on her, Section 362, P.C., which defines abduction lays down that whoever by force companypels or by any deceitful means induces any person to go, from any place is said to abduct that person. The, appellants case clearly falls within this definition. Kidnapping from lawful guardianship Which offence was the subject matter of discussion in Gopichands case supra is defined in s. 361, I.P.C. and according to that definition undoubtedly taking or enticing any minor out of the keeping of the lawful guardian of such minor companypletes the offence. That is number the case before us. The first challenge, therefore, fails. The companynsel has then companytended that there was numberquestion of the companymission of rape in this case and for that purpose he has tried to seek support from the medical evidence. We companysider it unnecessary to deal at length with this argument, which, in face of the medical evidence and the statement of the prosecutrix, does number seem to possess any merit, Me suggestion that, there being numbermarks of violence on the private parts or elsewhere on the person of the prosecutrix, there companyld be numberoffence of rape on her, is wholly misconceived. Rape has been defined in s. 375, P.C., according to which a man is said to companymit rape, who, except in the cases therein excepted, has sexual intercourse with a woman under circumstances falling under any of the five descriptions stated therein. We need number deal with all the descriptions. Suffice it to point out that where a person on whom rape is companymitted is under 16 years of age, even companysent is immaterial vide fifthly of s. 375 and penetration is sufficient to companystitute the sexual intercourse necessary to the offence of rape vide explana- A.I.R. 1961 Bom. 282. tion to s. 375. No attempt has been made on behalf of the appellant to take his case out of these provisions. No other argument was addressed on the basis of the medical evidence for companytending that there was numberpenetration except, as already numbered, that there were numbermarks of violence on the person of the prosecutrix. That is clearly immaterial because that would merely suggest want of violent resistance on the part of the prosecutrix, which is wholly Inconsequential when the prosecutrix is under 16 years of age. Absence of violent or stiff resistance in the present case may as well suggest, helpless surrender to the inevitable due to sheer timidity. In any event her companysent would number take the case out of the definition of rape. So far as the age of the prosecutrix is companycerned, it is numbereworthy that in the High Court her age was number questioned at least by the companynsel appearing for Dalip Singh as expressly numbericed in the impugned judgment. Even on behalf of Gurcharan Singh, appellant, we do number find any challenge to the age of the prosecutrix in the High Court. In any event the High Court companysidered the evidence on the point and believing the testimony of Tilak Raj P.W. 8 , who is the head master of the school in which the prosecutrix had been studying, and the evidence of the mother of the prosecutrix, came to the companyclusion that her date of birth- was April 10, 1952 and, therefore, she was less than 16 years of age on the date of the occurrence. This companyclusion is unquestionable. Indeed, before us the companyclusion of the High Court on the age of the prosecutrix was number assailed. The point most seriously canvassed in this Court on behalf of the appellant was that the solitary statement of the prosecutrix without companyroboration in material particulars is number enough to sustain the companyviction of the appellant. The learned companynsel appearing for Gurcharan Singh companytended that Dalip Singh and Sanjha Ram may have rightly companyvicted. But so far as the appellant is companycerned the evidence against him is neither reliable number sufficient for bringing home to him the offence of abduction and rape beyond reasonable doubt. The basic question which, therefore. arises is as to how far the testimony of the prosecutrix before us can form the basis of the appellants companyviction. It is well-settled that the prosecutrix cannot be companysidered as an accomplice and, therefore, her-testimony cannot be equated with that of an accomplice in an offence. As a rule of prudence, however, companyrt numbermally looks for some companyroboration of her testimony so as to satisfy its companyscience that she is telling the truth and that the person accused of rape on her has number been falsely implicated. The matter is number res integra and this Court has, on more occasions than one, companysidered and enunciated the legal position. In Rameshwar State of Rajasthan 1 this Court observed 1 1952 S.C.R. 377. .lm15 Now a woman who has been raped is number an accomplice. If she was ravished she is the victim of an outrage. If she companysented there is number offence unless she is a married woman, in which case questions of adultery may arise. But adultery presupposes companysent and so is number on the same footing as rape. In the case of a girl who is below the age of companysent, her companysent will number matter so far as the offence of rape is companycerned, but if she companysented her testimony will naturally be as suspect as that of an accomplice. So also in the case of unnatural offences. But in all these cases a large volume of case law has grown up which treats the evidence of the companyplainant somewhat along the same lines as accomplice evidence though often for widely different reasons and the position number reached is that the rule about companyroboration has hardened into one of law. But it is important to understand exactly what the rule is and what the expression hardened into a rule of law means. After referring to the well-known English decision in King Baskerville 1 from which the, observations of Lord Reading, the Lord Chief Justice of England, were, quoted with approval, the law in India was, stated to be exactly the same so far as the accomplices are companycerned and it was observed that in case of sexual offences it companyld number be any higher. The view taken by the High Court in that case that as a matter of law numberconviction without companyroboration was possible was disapproved. The true rule, after companysideration of decided cases is stated thus In my opinion, the true rule is that in every case of this type the rule about the advisability of companyroboration should be present to the mind of the judge. In a jury case he must fell the jury of it and in a number- jury case he must show that it is present to his mind by indicating that in his judgment. But he should also point out that companyroboration can be dispensed with if, in the particular circumstances of the case before him, either the jury, or, when there is numberjury, he himself, is satisfied that it is safe to do so. The rule, which according ,to the cases 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, and in jury cases, must find place in the charge, before a companyviction without companyroboration can be sustained. The tender years of the child, companypled 1 1916 2 K.B. 658. with other circumstances appearing in the case, such, for example as its demeanour, unlikelihood of tutoring and so forth, may render companyroboration unnecessary but that is a question of fact in every case. 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 every case, be companyroboration before a companyviction can be allowed to stand. Adverting to the nature and extent of companyroboration required when it is number companysidered safe to dispense with it this Court added It would be impossible, indeed it would be dangerous to formulate the kind of evidence which should, or would, be regarded as companyroboration. Its nature and extent must necessarily vary with circumstances of each case and also according to the particular circumstances of the offence charged. In Sidheswar Ganguly v. State of West Bengal 1 the decision in. Ramashwars case supra was approved and it was added that the nature of the companyroborative evidence should be such as to lend assurance that the evidence of the prosecutrix can be safely acted upon. In Janardan Tewari v. State of Bihar 2 it was observed We are satisfied that this girl was raped and we have only to find out who the culprits were. In this companynection, the law is that the evidence of the prosecutrix must be companyroborated in some measure to companynect the accused. Enough companyroboration is available in this case from the evidence of Bir Kumar who gave the information to his grand mother immediately after the incident and also deposed on oath in Court. Bir Kumar Singh is a young boy aged 12 years and therefore, we have to be cautious about accepting his testi- mony. We have read his evidence. Bir Kumar Singh was closely questioned to find out whether he understood nature of evidence, and whether he was capable of giving answers to the questions put to him. The Sessions Judge was satisfied that Bir Kumar was a companypetent witness and his statement struck us as being rue. 1 1958 S.C. 143. 2 1971 3 S.C.C. 927. In the present case Paramjit Kaur stated to Hamam Singh W. 4 as soon as he and his companypanions found her in the appellants sugarcane field as to how she had been abducted andhow the appellant and Sanjha Ram had companymitted rape on her. She wept when she narrated the story. The recovery of the prosecutrix and Sanjha Ram from the appellants sugarcane field, her companyplaint to Harnam Singh and others about the abduction and rape and the later recovery of some broken pieces of banglesfrom the said field and the medical evidence, in our opinion, fully companyroborate the testimony of the prosecutrix which even without companyroboration seems to us to be impressive enough torender it safe for sustaining the appellants companyviction. Nothing at all has been elicited from, her lengthy cross-examination by more than one defence companynsel so as to shake her credibility. Her statement suggesting slight exaggeration with respect tothreats shown to her by Dalip Singh and by the appellant doesriot affect the truth of her testimony on the real material point.A companymon village girl of less than 16 years that she is, due allowance must be made for the statement elicited from her incourt during cross-examination by companynsel or the defence. Her recovery virtually from the custody of Sanjha Ram has been proved number only by Harnam Singh P-W4 but also by Pyara Singh P.W. 5 and Anokh Singh P.W. 6 and we do number find any companyent ground for doubting this part of the prosecution case. The appellant in his defence pleaded alibi. He raised thisplea in his statement under s. 342, Cr. P.C. in the trial companyrt. In the companymitment companyrt we do number find this plea in his statement under s. 342, Cr. P.C. where he stated that he would make a detailed statement in the companyrt of sessions. He produced D.W. 3, Shankar Dass, his companysin brother the appellants mothers brothers son According to this evidence marriage of Smt, Iswari Devi, sister of Sankar Dass was solemnised at Rohtak November 24, 1967. Gurcharan Singh, according to this witness went to Rohtak on November 23. The marriage party arrived at Rohtak on 24th and departed on the evening of 25th. The appellant is said to have stayed on there for the night of the 25th. On the 26th the appellants son who is stated to be mentally deranged was to be examined by Dr. Vidya Sagar in the Medical College Hospital, Rohtak and the appellant is stated to have returned to Rohtak on November 27 without his son being examined by Dr. Vidya Sagar who happened to be on leave. Me appellants son was, however, shown to the doctor by Shankar Dass on November 29, 1967. According to the trial companyrt the appellant companyld easily have reached his village on the evening of November 26,-a view with which we entirely agree. High Court also did number accept the plea of alibi and, in our opinion, rightly. The appellant also pleaded that he was incapable of having sexual intercourse but this plea was belied by his medical examination. Neither the trial companyrt number the High Court accepted the plea. It is also interesting to numbere that the appellant has number been companysistent in giving, his age on different occasions. In his application dated August 27, 1963 to the police station, Ladwa, companyplaining against Harnam Singh and others that he apprehended danger at their hands, he gave out his age to be between 30 and 32 years. According to this assertion in 1967 he would be about 36 years of age. In his certificate of medical examination, Ex. PC, dated 12th December. 1967 his age is stated to be 45 years. In his statement under s. 342 he gave his age as 50 years. In the trial companyrt he stated under S. 342, Cr. P.C. that he was unable to perform sexual intercourse but this plea, as already observed, cannot be accepted in face of the result of his medical examination. A faint-hearted suggestion was thrown by the appellants companynsel that it is impossible for a medical man to state whether a man is capable of sexual intercourse. But this argument was number seriously pursued and in our opinion rightly. On a companysideration of the arguments addressed we have numberdoubt that the appellant has been rightly companyvicted for both the offences. So far as the question of sentence is companycerned it ha,,.-, to be borne in mind that the appellant is a Lumbardar of his village and has also officiated as Sarpanch for some time. Keeping in view the responsible position held by the appellant in our view. the sentence imposed is by numbermeans unduly harsh. The appeal accordingly fails and is dismissed. The appellant should surrender to his bail bond to serve out the sentence.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2129 of 1969. Appeal by special leave from the order dated January 13, 1969 of the Punjab and Haryana High Court, at Chandigarh, in P.A. No. 6 of 1969. Sen and G. D. Gupta, for the appellant. C. Mahajan and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by MUKHERJEA, J. This appeal on special leave is from an order of the Division Bench of the Punjab and Haryana High Court dismissing summarily an appeal directed against a judgment and order of a Single Judge of that Court by which a petition of the appellant under Art. 226 of the Constitution of India was dismissed. The matter arises in companynection with a disciplinary proceeding under the Punjab Civil Services Punishment and Appeal Rules, 1952 which had a very chequered career. For a proper appreciation of the points raised in this case it is necessary to set out some of the salient facts. The appellant joined the Punjab Irrigation Department as a temporary Engineer in 1939 and in companyrse of time became an Executive Engineer in that department. In December, 19 4 he was arrested in companynection with a case under Sec. 5 2 of the Prevention of Corruption Act which had been registered against one K. R. Sharma, Superintending Engineer, with whom the appellant had been working as a Personal Assistant. The appellant was, however, enlarged on bail. About the same, time the appellant was suspended with effect from 13 December 1954 and certain departmental proceedings were started, against him. In November 1956 the appellant was served with a charge sheet under Rule 7.2 of the Punjab Civil Services Punishment and Appeal Rules, There, were, two distinct charges made against the appellant which will, for the sake of companyvenience, be described hereinafter as Charge No. 1 a and Charge No. 1 b . Both the charges were based on allegations that the appellant had taken illegal gratification. We are number companycerned for the purposes of this, appeal with the details of the charges. On 18 December 1956 the appellant submitted a reply to the chargesheet to which he added certain supplementary replies between MAY and July 195?. Government, it appears, appointed an Enquiry Officer as late as October, 1957. On 18 February 1958 the appellant was., reverted from the post of Executive Engineer under suspension to that of an Assistant Engineer under suspension . In May, 1958 Government decided to defer the enquiry in respect of Charge 1 b until there was a decision in regard to Charge 1 a , In, October, 1958 the Enquiry Officer submitted to Government a report in respect of Charge 1 a which exonerated the appellant companypletely. The Government then waited for another six months before appointing another Enquiry Officer to companyduct the enquiry in regard to Charge 1 b . The appellant, it appears, asked Government on more than one occasion to supply him with a companyy of the report of the first Enquiry Officer in respect of Charge 1 a . Government, however, declined to supply any companyy. In December, 1960 the criminal case which had been Started against the appellant in 1954 ended in discharge of the appellant. On 19 April 1961 the appellant was dismissed from service on the basis of a report of the second Enquiry Officer regarding Charge 1 b . This order of dismissal was, however, quashed in March, 1963 by the High Court of Punjab and Haryana. The appellant was, thereafter, reinstated and forthwith placed under another order of suspension in May, 1963. A third Enquiry Officer was appointed simultaneously for a fresh enquiry into Charge 1 b . In February, 1965 the appellant got a decree in a civil suit by which he was allowed to recover the balance of his pay and allowances for the period of suspension and for quashing the order of reversion. Between 1963 and 1965 the appellant made various attempts through what was apparently a high-powered board called the Establishment Board to bring about a closure of the enquiry proceedings initiated against him. Nothing happened until 15 December 1965 when, once again Government appointed a new Enquiry Officer to, replace the earlier officer who had been appointed in February, 1965. In January 1966 the appellant was reinstated as Executive Engineer and in October, the same year, the entire enquiry against the appellant was withdrawn. One would have thought that this would be the end of the unusually protracted proceedings against the appellant. On the companytrary, however, on 26 October 1966 Government served a fresh Show Cause numberice on the appellant by which the appellant was told that his explanation of 18 December 1956 in reply to the charges and allegations levelled against him had been found unsatisfactory by Government and that Government proposed to censure his companyduct. Immediately upon receipt of the said Show Cause numberice the appellant asked for a companyy of the statement made by one S. D Khanna, Sub-Divisional Officer under Sec. 164 of the Code of Criminal Procedure. The appellant justified his demand for a companyy of S. D. Khannas statement by reference to two facts. First, Charge No. 1 b related to an alleged demand by the appellant for illegal gratification in the presence of S. D. Khanna and he was, therefore, entitled to have a companyy of the statements made by Is. D. Khanna before the police and the magistrate. Secondly, the appellant pointed out, under the orders of the High Court he was expecting a companyy of Khannas statement to be supplied to him on 27 October 1966. He did number, however, receive a companyy because the Government withdrew the chargesheet against him on 18 October 1966. If, therefore, by a fresh Show Cause numberice the appellant was called upon to vindicate his earlier reply to th e chargesheet, he was, he claimed, entitled to a companyy of the statement of S. D. Khanna. On 24 November 1966, however, Secretary to the Government of Haryana turned down the appellants request for a companyy of Khannas statement. Thereafter, on 16 December 1966 the appellant submitted a reply to the Show Cause numberice. On 27 February 1967 the Government passed an order imposing the penalty of censure on the appellant. The substantive part of the order is in the following terms Your explanation has been duly companysidered and the same has been found to be unsatisfactory. The Governor of Harayana is accordingly pleased to order that the penalty of censure be imposed on you. Your companyduct, is therefore, censured. On the same day another order was companymunicated to the appel- lant by which the Governor of Haryana had directed that under Rule 7.3 3 of the Punjab Civil Services Rules, Volume 1, Part 1, the appellant should number be allowed anything more than what had already been paid to him as subsistence allowance during the period of his suspension from 31 May 1963 to 6 January 1966. The order included also a direction that the entire period of absence from duty of the appellant on account of suspension from 31 May 1963 to 6 January 1966 was to be treated as a period spent on duty for all other purposes. In June, 1967 the appellant was given a numberice of companypulsory retirement which was subsequently withdrawn. In October, 1968, however, the appellant was companypulsorily retired. In the meantime, however, in November, 1967 the appellant had filed a writ petition in the High Court of Punjab and Haryana challenging the validity of the two orders dated 27 February 1967-one inflicting on him the punishment of censure and the other withholding from him his usual pay and allowances beyond what had been paid to him as subsistence allowance during the period of suspension. The writ petition was dismissed by a Single Judge of the High Court on 6 November 1968. The appellant then went on appeal before a Division Bench of the High Court. The appeal was, however, dismissed in limine. Upon being refused a certificate for appeal to this Court, the appellant asked for special leave which was granted to him on 3 October 1969. Only two companytentions were raised on behalf of the appellant before us. First, it was companytended that the appellant did number get a reasonable opportunity to reply to the Show Cause numberice dated 26 October 1966 on the basis of which he had been censured by the Government inasmuch as the numberice was too vague to. enable him to give an effective reply. Secondly, it was companytended that the order of 27 February 1967 which withheld from the appellant any payment in excess of the subsistence allowance he had drawn during the period of his suspension was liable to be struck down on the ground that it had been passed without giving him any opportunity to make a representation against it. We shall number deal with these companytentions one by one. The appellants companyplaint about the Show Cause numberice of 26 October 1966 is one that has to be accepted as substantial. For a proper appreciation of the appellants companytention, the Memorandum companytaining the Show Cause numberice may be set out in extenso It was in the following terms Your explanation dated the 18th December, 1956, in reply to the statements of charges and allegations has been companysidered and found to be unsatisfactory. The President of India, after taking a lenient view, has tentatively decided to censure your companyduct and also to place a companyy thereof on your personal file. Before the proposed punishment is inflicted, you are given an opportunity of making representation against the action proposed to be taken. Any representation which you make in this companynection will be companysidered before taking the proposed action. Such representation, if any, should be made in writing and submitted so as to reach me number later than the 7th day from the receipt of this companymunication by you. In case numberreply is received within the aforesaid period it will be presumed that you have numberexplanation to offer. The only ground on which the Government proposed to censure the appellant is the fact that the appellants explanation dated 18 December 1956 in reply to the statement of charges and allegations had been found unsatisfactory by Government. By the expression Charges, and allegations in this Show Cause ,notice, reference obviously is to the letter of 22 October 1956. That, letter, it will be remembered, companytains two charges, namely, Charge 1 a and Charge 1 b . The appellants explanation of 18 December 1956 which is said to have been found unsatisfactory by Government was a reply number only to Charge 1 a but also to Charge 1 b of these two charges, so far as Charge 1 a is ,concerned the appellant had been companypletely exonerated in October, 1958. There is numberhing, however, in the Show Cause numberice of 26 October 1966 to indicate clearly that the dissatisfaction of Government with the appellants reply of 18 December 1956 had numberhing to do with Charge 1 a . The Show Cause numberice merely states in vague general terms that the appellants reply to the charges and allegations was unsatisfactory. Even if we were to assume, though there is numberreasonable ground for this assumption, that Government did number have in mind the companytents of Charge 1 a while serving this Show Cause numberice, there is numberhing in the Show Cause numberice to give any indication that the particular allegations regarding which the appellant had failed to furnish a satisfactory explanation were referable only to ,Charge 1 b . The numberice is vague on other grounds as well. As one reads the first paragraph of the numberice, the questions that at once assail ones mind are many In what way was the explanation of the appellant unsatisfactory ? Which part of the appellants explanation was so unsatisfactory ? On what materials did the Government think that the appellants explanation was unsatisfactory. It is to our mind essential for a Show Cause numberice to- indicate the precise scope of the numberice and also to indicate the points on which the officer companycerned is expected to give a reply. We have numbermanner of doubt that the Show Cause numberice in the instant case did number give the appellant any real ,opportunity to defend himself against the companyplaint that his previous explanation of 18 December 1956 had been unsatisfactory. The appellant did number, therefore, get any chance at all to show ,that he did number deserve a censure upon his companyduct. We were told that since the appellant was aware of the charge and also aware of the reply he had given to the charges made against him, it was enough for Government to tell him that his answer was unsatisfactory. It was argued that since the Show Cause numberice really pointed this out and mentioned that the very lenient sentence of censure upon the appellants companyduct was ,going to be imposed, there was numberhing further that Government companyld be expected to do in this case. We have numberhesitation in rejecting this companytention made out on behalf of the State. It is ,manifestly clear that the Show Cause numberice was too vague to permit the appellant to deal with. it effectively and that companysequently the order of censure passed on him is bad and liable to be struck down. We number companye to the second companytention raised on behalf of the appellant that the order passed by the Governor of Haryana which directed the withholding from the appellant any payment in excess of the subsistence allowance he had already received during the period of his suspension between 31 May 1963 , and 6 January 1966 was bad in so far as the appellant had number been given a prior opportunity to make a representation against such order. The relevant order was passed under Rule 7.3 of the Punjab Civil Services Rules Vol. 1, Part I which is in the following terms 7.3 1 When a Government servant, who has been dismissed, removed, or suspended, is reinstated, the authority companypetent to order the reinstatement shall companysider and make a specific order - a regarding the pay and allowances to be paid to the Government servant for the period of his absence from duty and b whether or number the said period shall be treated as a period spent on duty. Where the authority mentioned in Sub- rule 1 is of opinion that the Government servant has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the Government servant shall be given the full pay and allowances to which he would have been entitled, had he number been dismissed, removed or suspended, as the case may be. In other cases, the Government servant shall be given such proportion of such pay and allowances as such companypetent authority may prescribe Provided that the payment of allowances under clause 2 or clause 3 shall be subject to all other companyditions under which such allowances are admissible. In a case falling under clause 2 the period of absence from duty shall be treated as a period spent on duty for all purposes. In a case falling under clause 3 the period of absence from duty shall number be treated as a period spent on duty, unless such companypetent authority specifically directs that it shall be so treated for any specified purpose. Provided that if the Government servant so desires, such authority may direct that the period of absence from duty shall be companyverted into leave of any kind due and admissible to the Government servant. It is clear that before passing an order under Rule 7.3, the authority companycerned has to form an opinion as to whether the Government servant has been fully exonerated and, also, whether, in the case of suspension, the order of suspension waswholly unjustified. It was urged on behalf of the appellant that before the authority formed such an opinion, it was incumbent upon it to afford an opportunity to make suitable representations in thisbehalf. Reliance was placed upon the Judgment of this Court in M. Gopala Krishna Naidu v. State of Madhya Pradesh 1 . The appellant in that case had been exonerated of the charges framed against him in a departmental enquiry. Government held, however, that the appellants suspension and the departmental enquiry instituted against him were number wholly. unjustified. The relevant order, after reinstating the appellant with effect from the date of the order and directing the appellants retirement from the same date on the ground that he had already attained the age of superannuation companytained a further direction that the entire period of the appellants absence from duty should be treated as a period spent on duty under Fundamental Rule 54 5 for the purpose of pension only, but that he should number be allowed any pay beyond what he had actually received or were allowed to him by way of subsistence allowance during the period of his suspension. The appellant in that case companytended that his case really came under Fundamental Rule 54 2 and number under Fundamental Rule 54 5 and that the Government should have granted him an opportunity to be heard before deciding as to the rule which applied to his case. It was companytended on behalf of the Government that the order regarding allowances was a mere companysequential order and in passing such an order it was number necessary to give a hearing to the party affected by the order. This Court, however, held that an order passed under Fundamental Rule, 54 is number always a companysequential order or a mere companytinuation of the departmental proceeding taken against the employee. Since companysideration under Fundamental Rule 54 depends on facts and circumstances in their entirety and since the order may result in pecuniary loss to the Government servant, companysideration under the Rule must be held to be an objective rather than a subjective function. Shelat, J. who delivered the judgment of the Court went on to observe The very nature of the function implies the 1 1968 1 S.C.R. 355 duty to act judicially. In such a case if an opportunity to show cause against the action proposed is number afforded, as admittedly it was number done in the present case, the order is liable to be struck down as invalid on the ground that it is one in breach of the principles of natural justice. We have numberdoubt in our minds that in this case also justice and fair play demand that the Government should have given the appellant a reasonable opportunity to show cause why an order affecting his pay and emoluments to his prejudice should number be made, The decision in M. Gopala Krishna Naidus l case had been cited before the High Court. The High Court, however, sought to distinguish that case from the instant case on facts. The High Court held that since in M. Gopala Krishna Naidus 1 case the proceedings had been dropped and the officer companycerned reinstated, he never got an opportunity to show to the appointing authority that his suspension had been unjustified and that he was entitled to full pay and allowances, while-in the instant case the appellant has already, according to the High Court, received all reasonable opportunity to show cause against the punishment that has been meted out against him. With respect, we do number think that-there is any real difference in substance between the facts of the instant case and those in M. Gopala Krishna Naidus l case. The appellant in the instant case did number really get an opportunity to defend himself against Charge 1 b . It will be remembered that in this case also the Government abandoned the proceedings against the appellant with regard to Charge 1 b . Had the proceedings been companypleted, it is number altogether impossible that the appellant would have been exonerated also of that charge just as he had been exonerated of Charge 1 a earlier. To that extent the appellant did number get any opportunity to show that the suspension order against him had been unjustified and that he was, therefore, entitled to full pay and allowances. From this point of view there is really numberdifference between the instant case and the case of Gopala Krishna Naidu 1 . Besides, the real ratio in M. Gopala Krishna Naidus l case was that if an order affects the employee financially, it must be passed after an objective companysideration and assessment of all relevant facts and circumstances and after giving the person companycerned full opportunity to make out his own case about that order. In the instantcase the order unquestionably is one that seriously prejudices theappellant. We would, further like to add that the fact that eventhe order of punishment was made without giving 1 1968 1 S.C.R. 355. 4-498Sup. CI/73 the appellant a real opportunity to make an effective representation against it makes the second order affecting his pay and allowances still more vulnerable. Mr. Mahajan appearing for the State sought to rely in this companynection upon an unreported decision of this Court in the, State of Assam and Anr. v. Raghava Rajagopalachari l . That case was a case dealing with Fundamental Rule 54 which is more or less similar to Rule 7.3 of the Punjab Civil Services Rules, under which this second order of 27 February 1967 had been passed by the Governor. The relevant portion of Fundamental Rule 54 is in the following terms - R. 54. When the suspension of a Government servant is held to have been unjustifiable or number wholly justifiable or When a Government servant who has been dis- missed, removed or suspended is reinstated the revising or appellate authority may grant to him for the period of his absence from duty- a if he is honourably acquitted, the full pay to which he would have been entitled if he had number been dismissed, removed or suspended and, by an order to be separately recorded, any allowance of which he was in receipt prior to his dismissal, removal or suspension or b if otherwise such proportion of such pay and allowances as the revising or appellate authority may prescribe. In a case falling under clause a the period of absence from duty will be treated as a period spent on duty. In a case falling under clause b , it will number be treated as a period spent on duty unless the revising or appellate authority so direct. This Court held that cl. b of the Fundamental Rule 54 would be applicable in all cases where the officer companycerned is number honourably acquitted. Since in that case the Government servant had clearly number been fully exonerated of the charges levied against him, it was open to Government to decide what period of absence from duty during the period of suspension should be treated as period spent on duty and, also, what proportion of pay and allowances should be given to him. This decision cannot apply to the instant case for the simple reason that Government, by withdrawing the proceedings initiated against the appellant in Civil Appeals Nos. 1561 and 1562 of 1965 decided by the Supreme Court on 6 October 1967. respect of Charge 1 b , made it impossible for the appellant to get himself fully exonerated. Since the appellant had been exonerated of Charge 1 a and since Charge 1 b was withdrawn, it is impossible for Government to proceed on the basis as if the appellant has number been fully exonerated or to assume that the order of suspension was one which was number wholly unjustified.In that view of the matter, we do number think that case of the State of Assam and Anr. v. Raghava Rajagopalachari supra can be of any assistance to the respondents. In the result this appeal succeeds. The judgment and order of the High Court- are set aside. The orders dated 27 February 1967 impugned in the appellants petition before the High Court are quashed. The appellant will get the companyts of this appeal as well as the companyts incurred below.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 312 of 1971. July 8, 1971 of the Orissa High Court in Original Criminal Misc. case No. 9 of 1970, K. Daphtary, A. K. Verma and B. P. Singh, for the appellant. Lal Narain Sinha, Solicitor-General of India and U. P. Singh, for respondent No. 2, The Judgment of the Court was delivered by DWIVEDI, J. The appellant is a member of the Superior Judicial Service of the State of Orissa, He was at one time officiating as District Judge. At the relevant time he was functioning as Commissioner of Hindu Religious Endowments, Orissa. The office of the Commissioner is created by the Orissa Hindu Religious Endowments Act. In village Sanabagalpur there are two deities. The Additional Assistant Commissioner of Hindu Religious Endowments took action under s. 27 of the said Act for appointing an interim trustee of the deities. The person incharge of the deities made an objection under s. 41 of the said Act that the Act did number apply as the deities were companysecrated under a private endowment made by him The Additional Assistant Commissioner rejected the objection by his order dated July 26, 1967. Without making any inquiry under s. 41, he held that prima facie there was a public endowment. He did number appoint the objector as a trustee of the deities. The objector filed a revision under s. 9 of the said Act before the appellant. During the period intervening between the rejection of the objection by the Addl. Assistant Commissioner and the filing of the revision by the objector, the identical issue was raised before the Orissa High Court in Bhramarbar Santra and others v. State of Orissa and others 1 . In that case the High Court held that the Asstt. Commissioner cannot appoint an interim trustee under s. 27 of the said Act until he has held an inquiry under s. 41 and has found that there was numberhereditary trustee of the religious institution. At the., hearing of the revision the aforesaid decision was cited before the, appellant by the applicant. After hearing the parties, the appellant made the following order 1 It is said on behalf of the petitioner that he has filed a petition under section 41 of the Act. But numberevidence is produced to that effect, thereby disclosing that their plea is humbug. The next argument is that the learned Assistant Commissioner should have first decided that the institution has numberhereditary trustee. The Assistant Commissioner has impliedly done so. The next argument that without a final declaration as to the nature of the institution, numberappointment under Section 27 can be made, does number seem to be companyrect. The decision in the High Court on Bantala case would number be applicable to this instance. Further against the order, we have moved the Supreme Court, and as such, the matter can be safely deemed to be subjudice. In order to establish that the petitioner is the hereditary trustee, he has to file an application under section 41 of the Act. No doubt the companyrt can initiate such a proceeding, But we should number do it where the institution appears to be safely a public one, in this instance, a Siva temple. I.L.R. 1970 Cuttack 54. The applicant filed a writ petition in the High Court against this order. The Division Bench, on hearing the applicant, issued numberice for companytempt of the High Court to the appellant. The High Court took exception to the following sentence occurring at the end of paragraph 2 in his order Further, against the order we have moved the Supreme Court, and as such, the matter can be safely deemed to be sub judice. The appellant appeared before the High Court in response to the numberice. According to him the apparently objectionable sentence in his order was number at all the basis for his decision. He said that the revision was dismissed by him after distinguishing the case before him from the facts of Bhramabar Santra. 1 He further Pleaded that under the Constitution the decisions of the Supreme Court are law of the land. So, bonafide, was of the opinion that when a matter is under appeal, or otherwise before the Supreme Court, the point of law, becomes subjudice and only a decision of the Supreme Court in the matter, would be binding on the Subordinate Court. It was also pleaded that the proceeding before him was an administrative proceeding and that the act of number following the decision of the High. Court in such a proceeding may number amount to companytempt of companyrt. The High Court did number accept his pleas in justification. It was held that the appellant refused to follow the decision in Bhramarbar Santra and others. 1 The High Court further held that we do number And any trace of bona fides of the companydemner in the order dated 19th January, 1970 The companydemner is a senior judicial officer who has already -put in 23 years of service having been recruited as a Munsif he has number risen to the rank of District Judge. We regret to find that though he has functioned as a judicial officer for about 23 years he has number been able to pick up the approach and attitude of a judicial officer and has actuated by the bias so often manifested in action of the -executive today while disposing of a judicial proceeding and when found fault with has companye up with the stand that he was acting administratively. After examining the matter further, the High Court said The companyduct of the companydemner far from being bonafide is clearly a malafide one and he intentionally avoided to follow the decision of this Court by advancing grounds which were most inappropriate. On that view of the matter the High Court found him guilty of companytempt of companyrt and admonished him in open companyrt and directed him to pay Rs. 300 as companyts of the proceedings. Shri Daphtary, companynsel for the appellant, rightly did number seek to support the justification pleas. His argument number is that the I.L.R. 1970 Cuttack 54. appellant is number guilty of companytempt of Court, for the sentence in the appellants order, found objectionable by the High Court, neither interferes with the administration of justice number scandalises the High Court. Shri Daphtary as well as the Solicitor-General appearing for the State have stated before us that there is numberdecided case either in support of or against the argument. But the absence of a precedent should number preclude an act being held to be companytempt merely because it is numberel or unusual provided it is companyprehended by the principles underlying the law of Contempt of Court. The absence of precedent should however put the companyrt on guard that the area of companytempt is number being unduly expanded Vide 17 Corpus Juris Secundum 21 . The present case then is to be decided on principles and analogy. Contempt of Court is disobedience to the companyrt, by acting in opposition to the authority, justice and dignity thereof. It signifies a willful disregard or disobedience of the companyrts order it also signifies such companyduct as tends to bring the authority of the companyrt and the administration of law into, disrepute. Vide 17 Corpus furls Secundum pages 5 and 6 Contempt by Edward N. Dangel 1939 Edn. page 14. Oswalds Contempt of Court 1910 Edn. pages 5 and 6 . It is a companymonplace that where the superior companyrts order staying proceedings is disobeyed by the inferior companyrt to whom it is addressed, the latter companyrt companymits companytempt of companyrt for it acts in disobedience to the authority of the former companyrt. The act of disobedience is calculated to undermine public respect for the superior companyrt and jeodardise the preservation of law and order. The appellants case is to be examined in the light of the foregoing principles and analogy. The remark in the appellants order found objectionable by the High Court is this Further, against the order we have moved the Supreme Court, and as such the matter can be safely deemed to be subjudice. It may be observed that on the date of the order numberhing was pending in the Supreme Court only a petition was pending in the High Court for a certificate to appeal to the Supreme Court from the decision in Bhramarbar Santra. 1 The appellant has thus made a wrong statement of fact. Secondly, the use of .the personal pronoun We is also significant. It indicates that the appellant identified himself as a litigant in the case and did number observe due detachment and decorum as a quasi judicial authority. Lastly, we agree with the High Court that it is number possible to believe that the appellant companyld have entertained the view that as soon as a petition for certificate to appeal to the I.L.R. 1970 Cuttack 54. Supreme Court was filed in the High Court against its decision, the binding character of the decision disappeared. He has 23 years judicial experience and he companyld scarcely entertain that belief. We agree with the High Court that the appellant deliberately avoided to follow its decision by giving wrong and illegitimate reasons and that his companyduct was clearly mala fide. Under Art. 227 of the Constitution, the High Court is vested with the power of superintendence over the companyrts and tribunals in the State. Acting as a quasi judicial authority under the Orissa Hindu Religious Endowments Act, the appellant was subject to the superintendence of the High Court. Accordingly the decisions of the High Court were binding on him. He companyld number yet away from them by adducing factually wrong and illegitimate reasons. In East India Commercial Co. Ltd. Calcutta and Another v. The Collector of Customs, Calcutta 1 Subba Rao J. observed The Division Bench of the High companyrt held that a companytravention of a companydition imposed by a licence issued under the Act is number an offence under s. 5 of the Act. This raises the question whether an administrative tribunal can ignore the law declared by the highest companyrt in the State and initiate proceedings in direct violation of the law so declared. Under Art. 215, every High Court shall be a companyrt of record and shall have all the powers of such a companyrt including the power to punish for companytempt of itself. Under Art. 226, it has a plenary power to issue orders or writs for the enforcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any Government, within its territorial jurisdiction. Under Art. 227 it has jurisdiction over all companyrts and tribunals throughout the territories in relation to which it exercise jurisdiction. It would be anomalous to suggest that a tribunal over which the High Court has superintendence can ignore the law declared by that companyrt and start proceedings in direct violation of it. If a tribunal can do so, all the subordinate companyrts can equally do so, for there is numberspecific provision, just like in the case of Supreme Court. making the law declared by the High Court binding on subordinate companyrts. It is implicit in the power of supervision companyferred on a superior tribunal that all the tribunals subject to its supervision should companyform to the law laid down by it. Such obedience would also be companyducive to their smooth working otherwise there would be companyfusion in the administration of law and respect for law would irretrievably suffer. 1 1963 3 S.C R. 338 at 366. The companyduct of the appellant in number following the previous, decision of the High Court is calculated to create companyfusion in the administration of law. It will undermine respect for law laid down by the High Court and impair the companystitutional authority of the High Court. Ms companyduct is therefore companyprehended by the principles underlying the law of Contempt. The analogy of the inferior companyrts disobedience to the specific order of a superior companyrt also suggests that his companyduct falls within the purview of the law of Contempt. Just as the disobedience to a specific order of the Court undermines the authority and dignity of the companyrt in a particular case, similarly the deliberate and malafide companyduct of number following the law laid down in the previous decision undermines the companystitutional authority and respect of the High Court. Indeed, while the former companyduct has repercussions on an individual case and on a limited number of persons, the latter companyduct has a much wider and more disastrous impact. It is calculated number only to undermine the companystitutional authority and respect of the High Court, generally, but is also likely to subvert the Rule of Law and engender harassing uncertainty and companyfusion in the administration of law. Our view that deliberate and malafide companyduct of number follow- ing the binding precedent of the High Court is companytumacious does number unduly enlarge the domain of companytempt. It would number stifle a bona fide act of distinguishing the binding precedent, even though it may take out to be mistaken. As a result of the foregoing discussion, we think that the High Court has rightly found the appellant guilty of companytempt.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1072 of 1971. Appeal by special leave from the judgment and order.dated June 16, 1971 of the Bombay High Court in Special Civil Application No. 1604 of 1969. C. Chagla, R. R. Zaiwala, P. C. Bhartari and Ravinder Narain, for the appellant. M. Tarkunde, Madan Gopal Gupta R. S. Sharma, Rameshwar,, Dial, P. N. Chadha and B. D. Sharma, for respondent No. 1 The Judgment of the Court was delivered by Shelat, J. This appeal, by special leave, is against the judgment of the High Court of Bombay. When the special leave was granted, it ,as companyfined to the question whether the tenancy in favour of the appellant-company was one for manufacturing purpose, and if it was so, whether the numberice terminating the tenancy was inadequate ? The appeal first reached hearing before a Division Bench of this Court. At that time, the Parties were agreed that the relationship between them was that of landlord and tenant. But the case of the appellant-company was that the lease in its favour was for a period of ten years, that such a lease was for manufacturing purposes, and therefore, companyld number be validly terminated by a months numberice. The respondents, on the other hand, companytended that the lease was by an unregistered document, and that it was number a valid lease by reason of the provisions of ss. 106 and 107 of the Transfer of Property Act. The Division Bench did number go into the question whether the lease was for manufacturing purpose,,, or number. However, the Division Bench felt that the appeal raised important questions as to the impact of s. 107 upon s. 106 of the Act, and there being so far numberdecision of this Court upon such a question referred the, appeal to a larger Bench. That is number the matter has companye up before us. The premises with which we are presently companycerned companysist of an open piece of land adjoining Haines Road in the city of Bombay. Prior to 1963, the said piece of land belonged to a companypany called Sir Shapurji, Bharucha Mills Co. Ltd. In 1953, the said piece of land was purchased by Bharat Insurance Co. Ltd. It appears that in 1947 the said piece of land was leased to Allenbury Co. on a monthly rent of Rs. 1800/where the lessee kept a number of American vehicles used by the army during the Second World War and purchased by that companypany from the Disposal Department of the Government of India. In or about 1950, the appellant- companypany was incorporated for the specific purpose of taking over the business of Allenbury Co. together with all its assets and properties including the said vehicles. In 1954, the appellant-company occupied the said leased land as tenant together with such of the said vehicles remaining undisposed of till then at an agreed rent of Rs. 1800/- a month. It is number in dispute that at that time a document of lease was executed by the-parties, which according to the appellant,company provided for a lease for ten years. The document was, however, number registered with the result that it companyld number be tendered in evidence as one creating a lease. There was, however, numberdispute between the parties that the appellant companypany paid and the respondents accepted all throughout rent from the appellant-company at the aforesaid agreed rate of Rs. 1,800/- a month. On January 20, 1960, the Bharat Insurance Co. Ltd. served a numberice upon the appellant-company thereby terminating the tenancy and called upon it to hand over quiet and vacant possession of the said premises on the ground that the appellant-company had sub-let the said land or part of it. The appellant- companypany having failed to abide, by that demand. a suit was filed in the Court of Small Causes at Bombay. Oil the nationalisation of the Life, Insurance Companies and on the Life Insurance Corporation of India being set up, the name of that Corporation was substituted for that of the Bharat Insurance Co. as the plaintiff in the said suit. The suit was henceforth companytinued by the Corporation. Although the unregistered document companyld number go in evidence, the suit as well as the appeal arising therefrom before the Appellate Bench of the Small Causes Court proceeded on ,the basis that the relationship between the parties was that of landlord and tenant as there was numberdispute that the occupation of the premises in question by the appellant- companypany was as a tenant irrespective of What the terms or the period of that tenancy were, which terms companyld number be proved as the document in respect thereof companyld number be brought on record by reason of its being an unregistered document. The Special Civil Application under Art. 227 of the Constitution filed in the High Court against the judgment of the Shall Causes Court and companyfirmed by its Appellate Bench, also proceeded on the assumption that the relationship between the parties was that of landlord and tenant. All the three companyrts companycurrently held that the tenancy, whatever its terms ware, was number satisfactorily proved to be for manufacturing purposes as alleged by the appellant-company and in the absence of any proof as to the term for which it was made, whether it was for ten years or from year to year, the numberice terminating the tenancy and calling upon the appellant-company to deliver vacant possession, although it was a months numberice, was number an invalid numberice and on that footing decreed the suit. In these circumstances, two questions were sought to be raised by Mr. Chagla. The first was that there being numberdispute between the parties that the relationship between them was that of landlord and tenant and the respondents having accepted all along the said rent of Rs. 1800/- a month, the Court- must proceed upon the basis that the occupation of the premises by the appellant-company was in the., capacity as a tenant. According to him, if the appellant-company can establish that that tenancy was for manufacturing purposes, the presumption laid down in s. 106 of the Transfer of Property Act, under which such tenancy has to be regarded as a tenancy from year to year terminable by a six months numberice and number by a months numberice, must apply. It is true, said he, that under s. 107 of the Act a lease from year to year can be made only by a registered instrument, but that provision in numberway companytrols the presumption laid down in s. 106 tinder which once it is proved that the parties were in the position of a landlord and a tenant and the tenancy was for manufacturing purposes. has to be presumed to be one from year to year. According to him, the two sections are independent of each other. the one dealing with the user and numberice, and the presumption arising from such user, and the other dealing with companypulsory registration for. a lease from year to year, or for a term exceeding one year. Mr. Tarkunde, appearing for the Corporation,, on the other hand, disputed the companystruction of these two sections suggested by Mr. Chagla. The second question raised by Mr. Chagla was that in any event the lease was for manufacturing purposes, and therefore, the said numberice was number valid. Assuming that Mr. Chagla is right in the interpretation of ss. 106 and 107 suggested by him, even then the appellant-company has first to establish that the lease in its favour was for manufacturing purposes and it is then only that it can take advantage of the rule of presumption laid down in s. 106. The expression manufacturing purposes in s. 106 is used in its popular and dictionary meaning., the Transfer of Property Act number having supplied any dictionary of its own for that expression. The burden of proving that the lease was for manufacturing purposes, must for the purposes of s. 106 of the Transfer of Property Act, lie on the party who claims it to be so, in. the present case the appellant companypany. That burden is to establish that the exclusive or at least the dominant purpose of the lease was the manufacturing purpose. See C. Mockertich v. Steuart ., Co. Ltd. 1 . The word manufacture, according to its dictionary meaning, is the making,, of articles or material number on large scale by physical labour or mechanical power. Shorter Oxford English Dictionary Vol. 1, 1203 According to the Permanent Editionof Words and Phrases. Vol. 26, manufacture implies a change but every change is number manufacture and yet every change in 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. The word manufacture saidAbbott, J., in R. v. Wheeler 2 has been generally understood to denote, either a thing made which is useful for its own sake and vendible as such, as a medicine, a stove, a telescope, and many others or to mean an engine or instrument, or some part of an engine or instrument, to be employed either in themaking of some previously known articles or in some other useful purpose, as a stocking frame, or a steam engine for raising water from mines or, it may perhaps, extend also to a new process to be carried on by known implements or elements acting A.I.R. 1970 S.C. 839. 2 2 B Ald. 349, cited in Strouds Judicial Dictionary 3rd ed. Vol. p. 1734. upon known substances, and ultimately producing some other known substance but producing it in a cheaper or more expeditious manner, or of a better or more useful kind. No more philosophical or abstract principle can answer to the word manufactures. Something of a companyporeal and substan- tial nature-something that can be made by man from the matters subjected to his art and skill, or at the least some new mode of employing practically his art and skill, is required to satisfy the word. In South Bihar Sugar Mills Union of India, 1 the Act with which the Court was companycerned was the Central Excise and Salt Act, 1944, which furnished numberspecial definition of the word manufacture. The question. can canvassed there was whether carbon dioxide, one of the companystituents of kiln gas produced as one of the processes necessary for refining sugar, companyld be said to have been manufactured, quite apart from the manufacture of sugar itself. This Court held that what was produced was kiln gas, a companypound of different gases and number carbon dioxide, though it was one of the different gases which made up kiln gas and therefore did number attract item 14-H in the Schedule to the Act. Since the Excise ditty was leviable under the Act on manufacture of goods, the Court explained the companynotation of the word manufacture. In so doing, the Court said that the word manufacture implied a change, but that a mere, change in the material was number manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. This was also the meaning given to the word manufacture in Union of India v. Delhi Cloth General Mills 2 . A numberification issued by the Government of U.P. under s. 3A of the U.P. Sales Tax Act, 1948 declared that the turnover in respect of medicine and pharmaceutical preparations would number be liable to tax except. a in the case of medicine and pharmaceutical preparations imported into U.P., and b in the case of medicines and pharmaceutical preparations manufactured in U.P. The question was whether, when in a dispensary medicines and pharmaceutical preparations, as prescribed by a doctor, are mixed, the process of mixing results in manufacture of medicines. The question was answered in the negative on the roundthat when a mixture of different drugs, as prescribed by a doctor, is prepared by a medical practitioner or his employee, especially for the use of a patient in the treatment of an ailment or discomfort diagnosed by such a medical practitioner by his professional skill, and which mixture is numbermally incapable of being passed from hand to hand as a companymercial companymodity, the medical practitioner supplying the medicine cannot be said to be a manufacturer of medicine and the mixture can- 1 1968 3 S.C.R. 21. 2 1963 Stipp. 1 S.C.R. 586. number be said to. be manufactured within the meaning of the numberification. In all these cases the statute or the numberification companycerned did number furnish any artificial meaning to the expression manufacture and the Court applied, therefore, the ordinary meaning as companymonly understood to that expression. The expression manufacturing purposes in s. 106, thus, means purposes for making or fabricating articles or materials by physical labour, or skill, or by mechanical power, vendible and useful as such. Such making or fabricating does number mean merely a change in an already existing article or material, but transforming,, it into a different article or material having a distinctive name. character or use or fabricating a previously known article by numberel process. The two cases cited by Mr. Chagla, viz., Sedgwick v. watliey Combe, Reid and Co. 1 and Action Borough Council v. West Middlesex Assessment Committee 2 , would number be of assistance as the question there discussed was number as, to the meaning of the word manufacture, but whether the premises in question were industrial hereditaments within the meaning of s. 3 of the Rating and Valuation Apportionment Act, 1928. Likewise, decisions given by companyrts on the word manufacture occurring in different statutes would number be of assistance where the statute companycerned gives an artificial meaning or a special definition. Bearing in mind the companynotation of the word manufacture as understood in the decisions above-cited, we have to ascertain whether the appellant-company companyld be said to be carrying on operations in the premises in question which companyld properly be called manufacturing operations. On this question, the evidence on record is general character and almost meager in quantum. Wit. Choradia, who was the managing director of the Bharat Insurance Co. between 1950 to 1954 and who used to reside in Delhi where the companypany had its headquarters,. but occasionally used to visit its branch in Bombay, deposed that after the premises in question were purchased in 1953 by his companypany from Sir Shapurji Bharucha Mills, he visited them and found them to companyprise an open land with sheds and a godown. There were lying there army automobiles, jeeps etc., but he did number numberice at that time any manufacturing process going on. He again, visited the premises in 1954 when also he found numbermanufacturing operations going on Wit. V. G. Kannan was an accountant in Allenbury. Co. Ltd. He used to go to the premises in 1950 and 1951 to pay wages to the workmen engaged here by his companypany. The premises had a workshop, a godown 1 1931 A. C.446 2 1949 2 K.B. 10. and a small office and the rest was open land. The companypany wound up its business in 1950, but there were lying in the premises steel racks belonging to his companypany, to inspect which he had to go there on several occasions. He also said that he did number see any manufacturing processes going on except that the workshop was used for repairing the disposal vehicles lying stored there. This was the position till July-August 1954 and till then there was numberchange in the user of the premises. Wit. J. P. Jain examined by the appellant-company was the Central Manager of the Bombay branch of Allenbury Co. from 1946 to 1950. Thereafter he became the managing director of the appellant-company. According to him, Allenbury Co. Ltd. had in 1948 purchased disposal vehicles which were stored for sale in the premises in question. The vehicles were in a damaged companydition when they were purchased. In some cases chassis were missing or they were bent or broken most of the parts were broken and missing. These used to be repaired and then sold. The companypany had put up a workshop where these vehicles were repaired, reconditioned and painted before, they were sold. The repairs, according to him, involved in some cases making of new bodies and new parts. For that purpose, the appellant companypany had to have in the workshop lathes, drill machines, velders etc. and had employed some 200 to 250 workmen. When the appellant companypany took over the business of Allenbury Co. Ltd. in 195051, there were in all 189 vehicles of different types in the suit premises. The working, he said, of overhauling, reconditioning and repairing these vehicles went on until 1957 when reconditioning of vehicles stopped presumably because the vehicles were sold out. The premises had on them a servicing station also with a trench in the centre for washing the vehicles and where spare part needed for repairs used to be stored. There was also an office and a store room where spare parts, oils and other stores purchased locally were kept. He denied that the premises were used only for repairing the vehicles. Besides his oral testimony, there is one letter on record written by this witness to Allenbury Co. Ltd., dated November 21, 1950 giving details of stocks lying on these premises when that companypanys business was taken over by the appellant-company. The schedule to this letter gives particulars of these stocks, viz., 182 vehicles of different types, stores, accessories, spare parts purchased from the market or the Disposal Directorate, tools and other workshop equipment and three cars under repairs. The schedule shows that the premises were used till then for storing the Disposal vehicles, together with spare parts etc. acquired along with them or purchased from the market forrepairing and reconditioning and making them fit for resale. There is numberevidence except the bare word of wit. Jain thatparts such as chassis and bodies etc. were actually manufactured and replaced for the old. No books of account or log books showing the work carried on on the promises or other documents were produced which would throw light on the activities carried on the premises. Even if the evidence of Jain were accepted in toto, and we were to find that some spare parts were being manufactured for repairing or reconditioning the vehicles, the dominant purpose of the lease, would still have to be regarded as one for storage and resale of the vehicles and number for manufacturing purposes. Manufacturing of spare parts would then be, merely incidental to the main purpose of disposal of these vehicles as without repairing or reconditioning them, such disposal companyld hardly have been possible. In our opinion, the appellants failed to establish that the dominant purpose of the lease was manufacturing purpose. In that view. the appellants companyld number have challenged the legality of the numberice. The High Court, therefore, was right in the companyclusion it arrived at and numberreason has been shown justifying our interference with it. That being the,, position, it is number necessary to go into the question whether s. 107 has any impact on s. 106 of the Transfer of Property Act, a question which the Division Bench, while referring this appeal to a larger Bench, though the appeal raised. For the reasons stated above the appeal fails and is dismissed with companyts. Mr. Chagla appealed to us that Some time may be given to the appellant-company for vacating the premises in question as, according to him, there are some machines still lying on the premises which will have to be removed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION C. A. No. 2020 of 1972. Appeal by certificate from the judgment and order dated March 28, 1968 of the Rajasthan High Court at Jodhpur in Income-tax Reference No. 1 1 of 1963. D. Karkhanis and A. G. Ratnaparkhi, for the appellant. C. Manchanda, P. L. Juneja, S. P. Nayar and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by JAGANMOHAN REDDY, J. This appeal is by special leave against the judgment of the High Court of Rajasthan in I an income-tax reference under s., 66 1 by which it answered the two questions referred to it in the negative. Before this appeal was filed, Appeal No. 1238/1969 had been filed on a certificate but that is dismissed without companyts because this Court had in several cases held that in Income-tax references if the High Court does number give any reasons while granting the certificate, the certificate can be revoked. The assessee, a firm carrying on mining business at Udaipur with a branch at Mandal, had pursuant to an invitation to tender for mica mining in accordance with the terms and companyditions prescribed in the Mineral Concession Rules, tendered for certain areas for Rs. 1,57,150/- of which Rs. 3,360/- was payable towards the mica scrap lying on the surface. The lease was for 20 years and the areas which were offered had been worked by other Private companypanies for 15 years. This offer of the appellant was accepted and the lease was granted to it. In the relevant assessment year 1952-53 for which the previous year for the head office ended on October 30, 1951 and for the branch ended on March 30, 1952, the appellant claimed Rs. 7,857/- being the 1/20th of the tender money as revenue expenditure incurred during that year. The claim of the assessee was rejected by the Income-tax Officer on the ground that the money was paid for the value of the land which it had acquired because the mine granted to the assessee had already been worked by the private companypanies. In an appeal against this order, the Appellate Assistant Commissioner companyfirmed the disallowance of the expenditure as in his view, it was a capital nature expended for the acquisition of a, capital asset. Against this order, an appeal was filed to the Appellate Tribunal. The Tribunal however allowed Rs. 3,360/paid for mica scrap lying on the surface as a revenue expenditure incurred in the acquisition of stock-in-trade, but disallowed the claim for the balance of Rs. 1,53,800/- which was paid under the tender as a capital expenditure. The assessee had also claimed Rs. 3,200 as the fee paid by it a the rate of Re. 1/- per acre per year for prospecting licence. The income-tax Officer disallowed this amount under s. 10 2 xv of the Indian Income-tax Act, 1922 hereinafter called the Act on the ground that the licence was obtained by the assessee only that year, that the fee was paid in addition to the royalty payable on the value of the emeralds excavated and sold and that it was an initial expenditure for procuring a right to respect mines. The Appellate Assistant Commissioner in an appeal by the assessee negatived the claim on the ground that under that licence the assessee had a right to win and companymercially exploit the minerals which the assessee actually carried out. The Tribunal while dismissing the appeal filed against the order of the Appellate Assistant Commissioner observed that the prospecting licence fee cannot be equated to a payment made for the purchase of stock-in-trade, that it was number based, on any quantity of minerals, that the minerals had to be won and extracted from the earth and the term prospecting licence shows that the mine had number yet started working as a mine and that the payment was to initiate the business.-It also held that the period of on,-- year for which the licence was obtained cannot justify the fee paid as a revenue expenditure. The assessee thereafter filed application under s. 66 1 of the Act and as in its opinion a question of law did arise, the, Tribunal referred the following two questions to the High Court for its opinion - Whether on the facts and in the circumstances of the case, the prospecting licence fee of Rs. 3,200/is allowable as revenue expenditure ? Whether on the facts and in the circumstances of the caste the appropriate Part of Rs. 1,53,800/- was allowable as revenue expenditure ? Taking the second question first, it is companytended before us by the learned advocate for the appellant that Rs. 1,53,800/- paid for pillars of mica standing in the land leased out after the other private companypanies had worked it was a revenue expenditure because the tender which was given and accepted was on the basis of the calculations in the Indian Mining Hand Book for a specific quantity of mica in the mines which was the assessees stock-intrade. The revenue however submits that the amount of the lease was a capital outlay incurred for the initiation of the business, and that the pillars of mica cannot be stock-in-trade unless the mica was excavated, and brought to the surface. A large number of cases decided in this companyntry and in England, dealing with different topics were referred and arguments addressed before us dealing with many analogies of one kind or other, tendu leaves mangoes, apples, sand, brickearth, lime and other companymodities all with a view to persuade us to ascertain what is the true test to be applied to the particular facts of this case We do number however propose to refer to cases dealing with variety of topics except perhaps to determine the nature of the expenditure incurred in this case by the assessee. This Court in Pingle Industries Ltd. v. Commissioner of Income-tax, Hyderabad 1 had occasion to examine exhaustively the relevant Indian and English cases for determining what is a capital expenditure and what is a revenue expenditure. That was also a case of mining where the assessee obtained leases for excavating Shahabad stones for a period of 12 years for which an annual payment of Rs. 28,000 was agreed upon. The majority of Judges, Kapur, J. and Hidayatullah, J. as he then was S. K. Das, J. dissenting held that the assessee acquired by his long term lease the right to win stones, that the stones in situ were number its stock-in-trade in a business sense but a capital asset from which after extraction it companyverted the stones into its stock-in-trade. It was also held that the payment was neither rent number royalty but a lump payment in instalments for acquiring a capital asset of enduring benefit to its trade the amounts being out goings on capital account, were therefore number allowable deductions. The proposition as qualified by Lord Cave in Atherton v. British insulated and Helsby Cables. Ltd. 2 that in the absence of any special circumstances leading to the opposite companyclusion, when an expenditure is made, number only once and for all, but with a view to bringing it into existence an asset or advantage for the enduring benefit of a trade, has been applied, explained and varied from time to time as the circumstances of the particular case required. The application of these principles to the various cases and the companyclusions reached by companyrts in those cases often 1 40 I.T.R. 67. 2 1926 A. C. 205,213. 6-L498Sup CI/73 lead to irreconciliable results. It is because the topic itself is a troublesome one and is number rendered any the less difficult by resorting to principles. It is number always easy observed Romer, L.J. in olden Horse Shoe New Ltd. Thurgood H. M. Inspector of Taxes 1 to determine whether a particular asset belongs to one category or the other number does it depend in any way on what may be the nature of the asset in fact or in law. In our own Court this difficulty has been put very tersely,. if we may say so with respect, by Hidayatullah, J. as lie then was in Abdul Kayoom v. Commissioner of Income-tax 2 when he said numbere of the tests is either exhaustive or universal. Each case depends on its own facts, and a close similarity between one case and another is number enough, because even A single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases as said by Cordozo. The nature of the Judicial Process, p. 20 by matching the companyour of one case against the companyour of another. To decide, therefore, on which side of the line a case falls, its broad resemblance to another case is number at all decisive. What is decisive is the nature of the business, the nature of the expenditure, the nature of the right acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases. The determining factor will depend largely on the nature of the tract-, in which the asset is employed. The several cases which do number deal with the mining leases but are companycerned with different assets are of little help in the same way as in Mohanlal Hargovind v. C.I.T. 3 , cases relating to the purchase or leasing of mining quarries, deposits of brick earth were companysidered number to be of assistance by the Privy Council in case of a companytract for companylecting and removing tendu leaves. The principles enunciated for determining the nature of the expenditure have been sought to be applied to different situations arising on the facts of each case, but the difficulty in matching them with the seeming irreconciliabiliiy are perhaps explicable only on the ground that the determination in any particular case is dependent on the character of the lease or agreement, the nature of the asset, the purpose for which the expenditure was incurred and such other factors as in the facts and circumstances of that case would indicate. If we companyfine our attention to the mining leases, what appears to us 1 18 T.C. 280. 3 17 I.T.R. 473. 2 64 I.T.R. 689 at 703. 36 5 to be an empirical test is that where minerals have to be won, extracted and brought to surface by mining operations, the expenditure incurred for acquiring such a right would be of a capital nature. But where the mineral has already been gotten and is on the surface, then the expenditure incurred for obtaining the right to acquire the raw material-that is- the mineral, would be a revenue expenditure laid out for the acquisition of stock-in,trade. An expenditure incurred for acquiring a right to take away sand from the surface of river beds has been treated as if the sand was stock-in- trade,-M.A. Jabbar v. Commissioner of Income-tax 1 in the same way as tendu leaves have been treated by the Privy Council in Mohanlal Hargovinds case. In the former case, Bhargava, J. indicated a number of factors which led to the companyclusion that the expenditure incurred by the assessee in obtaining the lease was revenue expenditure for the purpose of obtaining stock-in-trade and number capital expenditure which were 1 that the lease was for a very short period of 11 months only 2 that the sole right which was acquired by the assessee under the lease deed was to take away the sand lying on the surface of the leased land where numberquestion of raising, digging or excavating for the sand before obtaining it was involved. In other words, numberoperation had to be performed on the land itself and is number a case where the gravel is in any true sense as appointed out in Golden Horse Shoe New Ltd.s case was won from the soil it is merely shovelled up where it lies. In the latter case the Privy Council said that the leases for the right to companylect and remove tendu leaves under which a certain sum was payable by instalments as a companysideration for the grant of that was a revenue expenditure it pointed Out that the companytracts were short term companytacts, that the picking of the leaves had to start at once or practically at once and to proceed companytinuously and that under the companytract it is tendu leaves and numberhing but tendu leaves that are acquired. At page 478 while companyparing that case with the case of Kauri Timber Co. Ltd. I.,. Commissioner of Taxes 2 where the companypanys business companysisted in cutting and disposing of timber and it had in some cases acquired timber-bearing lands and in other cases it purchased the standing timber, the lease itself being for 99 years, the Privy Council observed In the present case the trees were number acquired number were the leaves acquired until the appellants had reduced them into their own posse ssion and ownership by picking them. The two cases can, in their Lordshops opinion, in numbersense be regarded as companyparable. If the tendu leaves had. been stored in a 1 68 I.T.R. 493 2 1913 A.C. 771. merchants godown and the appellants had bought the right to go and fetch them and so reduce them into their possession and ownership it companyld scarcely have been suggested that the purchase price was capital expenditure. Their Lordships see numberground in principal or reason for differentiating the present case from that supposed. The analogy referred to in the above passage is sought to be applied to the facts of this case but in our view there is hardly any justification for such a companyclusion having regard to the findings of the Tribunal and the income-tax authorities. The learned advocate for the assessee companytends that the Income-tax Officer, the Appellant Assistant Commissioner and the Tribunal, each of them had given different findings for companying ,to the companyclusion that the expenditure was of a capital nature while the High Court gave yet another reason to answer the questions against the assessee. Inasmuch as the companyrectness or otherwise of the order depends greatly upon what has been found as facts. of this case, it would be useful to examine the respective orders. The Income-tax Officer, as we have earlier stated held that the money was paid for the value of the land which the assessee had acquired because the mine granted to the assessee had already been worked by other private companypanies. This finding, according to the learned advocate, is companytrary to the facts set out in the statement of the case by the Tribunal in which a reference was made to paragraph 5 of the invitation to tender. It reads As the area has been worked by a private company- pany during the past fifteen years, all the known mines and quarries and prospecting pits have acquired a value which can be determined on the principles of mine valuation. Intending applicants are therefore requested to visit the area before April 15, 1950 and assign their own value and offer it. According to the assessee, as already pointed out, it had offered Rs. 1,57,150/ after the mica had been valued on the principles of mine valuation which represented a payment of stock-in-trade. The Appellate Assistant Commissioner has rejected the claim of the assessee with these observations On merits the appellants claim cannot be sustained because the circumstances detailed above, clearly indicate that the payment of tender money was for the acquisition of capital asset and number, as sought to-be made out, for the stock of ores. The stock was number here on the surface but it was still embedded with the only difference that its availability companyld be more definitely gauged than in the case of an unworked area. It would number make any material difference whether the miner acquires a lease on ordinary terms for an area which does number give a clear indication of the possible existence of ore or he acquires on more expensive terms an area which is in such a companydition that it gives definite indication about the possibility of existence of ore therein and also broadly the extent thereof. Acquisition in either case would be of a capital asset and payment therefore, small or large, a capital expenditure. Earlier the Appellate Assistant Commissioner had stated that when the lease was allotted to the appellant by the Mining Department it was made clear that any mica scrap left by the predecessor exploiters M s. Duduwala Co., on the surface would be removed either by these exploiters within three months or if number so removed it would stand forfeited to the Rajasthan Government in any case it was number to companye to the appellants. In the light of what has been stated, it is clear that the Appellate Assistant Commissioner made a distinction between mica that has been ,excavated and brought it the surface and the mica which was still embedded and had to be excavated even though it was more easily avail-able because of the labour already expanded in the working out of the mine by the other private companypanies. The companyclusions of the Tribunal are set out in the following passage .- In our opinion, the amount paid cannot be equated to payment for raw materials. The raw materials have to be won and extracted before they companyld be said to be stock-in-trade. The sum represents the price that was paid by the assessee for obtaining the right to, extract and win emerald and mica in an area which had already been worked and developed by a predecessor for 15 years. If the assessee had to start running a mine, it had to incur similar expenditure. In this case, the amount had been incurred and was paid for by the assessee. Thus this amount in our opinion represents capital expenditure incurred for the purpose of obtaining certain benefits of a capital nature. This is number in the nature of any royalty or rent paid by the assessee to the authorities. In this companynection, reference was made on behalf of the assessee to the provisions of Rule 51 of the Mineral Concession Roles which prohibits premium being paid for obtaining such a licence. This rule occurs in Chapter 5 which applies to grant of mineral companycessions by Private persons and we do number companysider that the rule is relevant for companysidering the question in issue before us where the grant is by the State. We do number also think that this is in the nature of any premium. This is merely for the purpose of getting benefits of certain structures and other works carried out in the area which had already been worked as a mine previously. This cannot be equated to a premium that is companytemplated by rule 5 1. We therefore agree with the authorities below in holding that the assessee has number made out the claim for de- duction of the amount. The finding of the Tribunal given in the above excerpt is clear and companysistent with that given by the Income-tax Officer and the Appellate Assistant Commissioner in that all of them distinguished between raw materials which had already been extracted and brought to the surface and those that have still to be extracted. Apart from the objection that numberquestion was formulated by which the findings of the Tribunal were challenged on any admissible grounds, there are, in our view, numbercontradictions in the fin-ding of the Tribunal as submitted by the learned advocate for the assessee because what the Tribunal was dealing with in the latter part of the passage cited above, were the companytentions urged on behalf of the assessee, firstly, that the amount was a royalty or rent paid to the authorities and secondly, what was paid was in the nature of premium. While rejecting these companytentions the Tribunal gave its reasons but that is number to say that the companyclusion that the amount was a capital expenditure was number based on the finding that mica had to be extracted and brought to the surface before it companyld be companysidered as the assessees stock-in-trade. In our view the principles which have been applied in the Pingle Industries case are equally applicable to the facts and circumstances of this case. The test for ascertaining whether the amount spent is of a capital nature is, whether it was spent for obtaining a right of an enduring character which in the case of mining leases is to acquire rights over land for winning the mineral. In other words, where the mineral is part of the land and some mining operations have to be performed to extract it from the earth, the amount paid to acquire a right over or in the land to win that mineral is of an enduring character and hence a capital expenditure. In this case the mica pillars which have been exposed by the mining operation of other private companypanies had numberdoubt enhanced the value of the right which was leased to the appellant but numberetheless.the appellant still had to carry out some mining operations to extract the mineral from the pillars which was embedded in the land. If the private companypanies before the mica was exposed had taken the lease, they would have paid a much lesser amount which numberetheless would have been a capital expenditure It is the labour and expense which the private companypanies expanded that has enured for the benefit of the Government and enhanced the capital value of the lease. This is number a case as is companytended, of mica having been given so as to form part of the stock-in-trade of the assessee as in the case of Golden Horse Shoe New Ltd. v. Thurgood H. M. Inspector of Taxes 1 In that case the companypany had acquired rights in certain dumps of tailings or residuals that remained after the extraction of gold from ore taken from certain gold mines. It was companytended on behalf of the revenue that the companypanys rights in tailings and dumps were part of the undertaking which the companypany was formed to acquire and any sum paid therefore was capital expenditure, and that the companypanys rights in the dump was the purchase of a wasting asset. This companytention was negatived and it was held that the purchase price of, the tailings was an admissible deduction in companyputing the companypanys profits for income-tax purposes . Lord Hanworth, M.R. at page 298 observed After careful companysideration of, the present case, in the companyrse of which my mind has fluctuated on either side, I think it is- to be decided upon its own facts-that numbere of the tests suggested affords a strict rule of guid- ance. It seems, then, that the Company bought these dumps-which were numberlonger in a natural but in an artificial companydition which were in such a state that they would number have passed under a lease-of beds opened, or unopened, minerals, see Boileau v. Heat Ch. D. 301 -for the purpose of treating them as the stock-in- trade, lying stored and ready to their hand, at a fair- price of pound 122,750, and their intention was to use them up and make what they companyld of them by and after treatment. They had number to win them from the soil they had been gotten already. If the metaphor of working a mine be applied, it might be said that the purchase of the dumps was a capital outlay. If the metaphor of making gas or companye from companyl, or of a miller making flour from wheat, be applied, it may be said that it was an outlay to be placed in the profit and loss account. But metaphors do number provide exact definitions and are often misleading. It is safer 1 18 T.C. 280. to give an interpretation to the facts of this case as found in the case stated and upon the law relevant to them. This passage at once indicates the difficulties which he in companymon with other Judges have felt When called upon determine the nature of the expenditure. The lease in this case was for a long period it companyferred a right to excavate the mica because on the findings of the Tribunal mica had to be extracted from the mine though, the ,earlier working out of the those mines by other companypanies had made it much easier to perform the final operations and because of it a higher amount had to be paid. Nonetheless the amount paid was for acquiring a right of enduring nature to extract and remove the mica to bring it to the surface, grade it and pay royalty to the Government in accordance with the quality of Leach grade of mica extracted. We accordingly hold that the ,expenditure incurred is a capital expenditure and that the second question has been rightly answered. On the first question whether the prospecting licence fee of Rs. 3,200/- is allowable as revenue expenditure, the companytention on behalf of the assessee is that it is a licence fee, number a lease amount number does it create an interest in the land. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal have all held that the fee paid for prospecting licence was number ,of a revenue nature. It was submitted before the Tribunal that under a prospecing licence issued under Chapter 3 of the Mineral Concession Rules, 1943 the licensee had a right to win and carry away the minerals for companymercial purposes, and for that reason the amount should be treated as in the nature of a purchase price of a stock-in-trade. In support of this companytention the provisions of T. 23 were referred to but the Tribunal rejected that companytention because in its view the amount was paid, as and by way of prospecting fees which was for initiation of a business as in the case of other minerals and that the character of the licence did number change merely because the licensee had certain rights over the minerals obtained under the prospecting licence number was it based on any quantity of minerals. The minerals had to be won and extracted from the earth and the term prospecting licence shows that the mine has number yet started working as a mine. It was a fee paid irrespective of the quantity of minerals obtained which demonstrated clearly that the object of the payment was to initiate the business. That apart, the period for which the licence was obtained viz., one year, does number also make it a revenue payment and companysequently it held that the authorities Tightly disallowed the amount. The finding by the Income- tax authorities as well as the Tribunal that it was a payment for initiating the mining operations was a finding of fact. In oar view also the, fee was paid to obtain a licence to carryout, investigate, search and find the mineral with the objectof companyducting the business of extracting ore from the earth.It is therefore clear that the fee was paid for initiating the business and is of a capital nature. By numberstretch of argument can the fee paid for a prospecting licence be equated to a payment made for the purposes of stock-in-trade. We think that the Income-tax authorities, the Tribunal and the High Court are right in companying to that companyclusion. Our answer to the first question is, therefore also in the negative. The two questions having been answered against the assessee, the appeal is dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2016 of 1969. Appeal by Special Leave from the judgment and order dated April 27, 1967 of the Madras High Court in Tax Case No. 75 of 1963. C. Manchanda, B. D. Sharma and R. N. Sachthey, for the appellant. C. Chagla, Janendra Lal and B. R. Agarwala, for the respondent. The Judgment of the Court was delivered by Hegde, J. This appeal by special leave arises from a decision of the Madras High Court in a reference under section 66 1 of the Indian Income Tax, 1922 to be hereinafter referred to as the Act . As demanded by the assessee the Tribunal submitted the statement of the case to the High Court seeking its opinion on the question whether on the facts and in the circumstances of the case, the loss of Rs. 1,93.750/- was an allowable deduction under section 10 of the Income-tax Act? Material facts are these The assessee respondent was a member of a Hindu undivided family which carried on money lending business in India and abroad. In the companyrse of such money lending business, properties were taken over in settlement of debts as and when occasion arose. The family was disrupted on March 28, 1939. The assessee received some shares in some companypanies, properties and gardens and certain other items in Malaya. Even after the partition the assesses companytinued the money lending business in Malaya. During the war, in general with others, the assessee suffered damages to these properties on account of Japanese bombing. This loss occurred on account of bombing in December, 1941, a date falling within the accounting period ending on April 12, 1942, relevant for the assessment year 1942-43. This loss was claimed as a business loss. The Income Tax Officer rejected that claim. The Appellate Assistant Commissioner affirmed the order of the Income Tax Officer-. The assessee did number succeed before the Tribunal as well. The Tribunal rejected the claim of the assessee on the sole ground that bombing, which caused the loss, was number incidental to the business of the assessee. The Tribunal held that the loss in question was a loss of stock-in-trade. That finding of the Tribunal has number been challenged. Hence we have to proceed on the basis that the loss caused to the assessee was a loss of stock-in- trade. It was companytended on behalf of the department that the loss in question cannot be given deduction to, as a business loss, in companyputing the net income of the assessee under section 10 1 . According to the department that was number a loss incidental to the business carried on by the assessee. We are unable to appreciate the companytention of the department. It is established that the assessee was carrying on business in Malaya when the war was going on. Malaya was within the war zone and, therefore, there was every possibility of that area being bombed. If the assessee had earned any profits out of his business during the war, the department undoubtedly would have companysidered those profits as assessable income. It is strange that when loss had occurred in such a situation the department should companytend that the loss in question was number a business loss. In our opinion, taking into companysideration the facts and circumstances of the case, the loss occurred must be held to be a loss incidental to the business carried in by the assessee in Malaya during the war. We are fortified in our companyclusion by the decision of the Bombay High Court in Pohoomal Bros. v. Commissioner of Income-Tax, Bombay City 1 . The facts of that case are some- 1 34 I.T.R. 64. what similar to the facts before us. The assessee therein, which had its head office in Bombay and branches in various parts of the world, claimed deduction of the losses resulting from the destruction of its stock in trade in three foreign branches, at Manila, Saigon and Kuala Lumpur, by enemy invasion, in companyputing its profits and gains for the purpose of income-tax. The department resisted that claim but the High Court held that the losses in question were trading losses. This decision of the High Court was cited with approval by this Court in Commissioner of Income Tax, U.P. v. Nainital Bank Ltd. 1 , In this companynection we may also refer to two English decisions. The first case is Green v. J. Gliksten 2 . The facts of that case were as follows A fire occurred on the companypanys premises in August, 1921, and destroyed timber the written down value of which in the companypanys books was pound 160,824 the companypanys valuation of its stock based on companyt or market value whichever was the lower, had been accepted for purposes of taxation. The timber had been insured for many years and the companypany had been allowed to deduct the insurance premises in companyputing its assessable profits. In due companyrse the companypany received from the insurers a sum of pound 477,838 representing the replacement value of the destroyed timber, but only a small part of this timber was in fact replaced because the current demand was for timber of a different character. The companypany accordingly credited in its profit and loss account as a trading receipt only pound 160,824 of the insurance payment the balance did number appear in the profit and loss account but was entered as a reserve in the balance sheet. The Special Commissioners held that numberpart of the sum of pound 477,838 recovered from the insurers was a trading receipt. But the House of Lords held that the whole sum recovered was trading receipt to be taken into account in companyputing the profits assessable to Income Tax under case 1 of Schedule D and to Corporation Profits Tax. This companyrt in Nainital Banks case supra quoting that decision with approval observed. If receipt from an insurance companypany towards loss of stock was a trading receipt, companyversely to the extent of the loss number so recouped it should be trading loss. Next we shall refer to the decision of the Court of Appeal in London Investment and Mortgage Co., Ltd. v. Inland Revenue Commissioners. 3 The facts of that case were as follows The assessee were paying companypulsory war damage companytributions during the war in respect of the properties in which they were dealing. They received payments under the War Damage Act, 1943, in respect of the properties damaged by enemy action. 1 55 I.T.R. 707 2 14 Tax Cases 364. 3 1957 1 All England Reports 377. They disposed of some of the properties but retained others as part of their stock-in-trade and either were having them rebuilt or would have them rebuilt. Under the War Damage Act, 1943, companytributions made and indemnities given under Part I were to be treated for all purposes as outgoings of a capital nature and expenditure on making good war damage was number deductible in companyputing profits for income tax purposes. On the question whether the value payments should be included in the receipts of the taxpayers trade for the purpose of their assessments to income under Case 1 of Schedule D and to profit tax, the Court of Appeal held that the value payments should properly be treated as part of the taxpayers trading receipts, since they were money into which their stock-in-trade had been companyverted. This decision is an authority for the proposition that the companypensation received in lieu of loss, of stock-in-trade as a result of enemy action is a trading receipt companyversely a loss of stock-in-trade occasioned by enemy action must be companysidered, as a trading loss. For the reasons mentioned above we agree with the companyclu- sions reached by the High Court and see numbermerit in this appeal. It is accordingly dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION C. A. Nos. 1378 and 1379 of 1969. Appeals by certificate from the judgment and order dated May 21, 1968 of the Calcutta High Court in Income-tax Reference No. 17 of 1965. S. Desai, P. L. Juneja, R. N. Sachthey and S. P. Nayar, for the appellant. C. Setalvad, S. Roy Chowdhary and G. S. Chatterjee, for the respondent. The Judgment of the Court was delivered by JAGANMOHAN REDDY, J. This appeal is by certificate and though numberreasons have been given for the grant of it, the learned advocate for the respondent does number companytest that a question of law does arise and has number objected to the certificate. The question that was referred to the High Court by the Tribunal under s. 66 1 of the Indian Income- tax Act, 1922 hereinafter called. the Act is as follows Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the matter of calculation of undistributed balance of the total income of an assessee for the purpose of levy of super-tax in terms of S. 23-A 1 of the Income-tax Act, 1922, the Income-tax Officer should have taken into companysideration dividend declared by the companypany after the period of 12 months immediately following the expiry of the previous years relevant to the assessment years 1958-59 and 1959-60 but before the date on which the orders under S. 23-A 1 had been made by the Income-tax Officer ? The High Court has answered that question in the affirmative and against the department following the reasoning which was obiter in the case of Moore Avenue Properties Private Ltd. v. C.I.T. 1 - 1 59 I.T.R. 466. The respondent is a private companypany to which- it is number dis- puted, sub-s. 1 of s.23-A would be attracted if it fulfilled the companyditions prescribed therein. The assessment relating to which the Income--tax Officer sought to exercise his jurisdiction under that section was for the years 1958- 59 and 1959-60 for which the accounting year ended on 30th June 1957 and 30th June 1958 respectively. The order of the Income-tax Officer was dated October 31, 1961. The companytention of the appellant is that the companypany had, declared the dividends after the 12 months following the accounting year and hence the Income-tax Officer had with the previous sanction of the Inspecting Assistant Commis- sioner, validly subjected the companypany to super-tax in terms of the latter part of s. 23-A 1 . On behalf of the respondent it was submitted that once dividends were declared before an order is made under this section numbersuper-tax can be levied in respect of those dividends. This submission was rejected by the Income-tax Officer who sought to assess the respondent by including Rs. 15,000 and Rs. 90,000/- declared as dividends at the general meetings held on December 17, 1959 and May 26, 1960 in respect of the relevant assessment years. An appeal to the Appellate Assistant Commissioner was unsuccessful. The Tribunal however on a reading of the relevant parts of the section came to the companyclusion that in companyputing the undistributed balance of the total income number only the income-tax and super-tax payable by the companypany but also any other tax levied by the local authority ,etc. are to be deducted but also dividends actually distributed, if any which are the words used in the latter part of s. 23-A 1 . It was also of the view that numbertime limit was applicable in taking into account the actual distribution of dividends in passing an order under s. 23-A 1 by the- Income-tax Officer as such it directed that the sums of Rs. 15,000 and 90,000/- were to be taken into account in arriving at the undistributed balance of the total income of the respondent companypany for the purpose of levy of super-tax. Before companysidering the companytention on behalf of the revenue it will be necessary to examine the terms of the section and the object for which it was enacted. S.23-A 1 after it was recast by the Finance Act of 1955 is as follows - Where the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any companypany within the twelve months- immediately following the expiry of that pre- vious year are less than the statutory percentage of the total income of the companypany of that previous year as reduced by- a the amount of income-tax and super-tax payable by the companypany in respect of its total income, but ex- cluding the amount of any super-tax payable under this section b the amount of any other tax levied under any law for the time being in force on the companypany by the Government or by a local authority in excess of the amount, if any, which has been allowed in companyputing the total income and c in the case of a banking companypany, the amount actually transferred to a reserve fund under s.17 of the Banking Companies Act, 1949 the Income-tax Officer shall, unless he is satisfied that, having regard to the losses incurred by the companypany in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable, make an order in writing that the companypany shall, apart from the sum determined as payable by it on the basis of the assessment under section 23, be liable to pay super-tax at the rate of fifty per cent in the case of a companypany whose business companysists wholly or mainly in the dealing in or holding of investments, and at the rate of thirty-seven per cent in the case of any other companypany on the undistributed balance of the total income of the previous year, that is to say, on the total amount as reduced by the amounts, if any, referred to in clause a , clause b or clause c and the dividends actually distributed, if any. This provision is procedural and applies only to companypanies in which the public are number substantially interested. It seems to have been enacted with a view to deter private companypanies which do number distribute more than 60 of their assessable income on pain of exposing them to the drastic companysequences of subjecting their undistributed balance of the net income to additional supertax. The object of the section is to prevent the shareholders in adopting a device to avoid payment of super-tax inasmuch as the rates of super-tax for the companypanies being lower there may be a temptation to get the companypany to accumulate profits and capitalise them such as for instance to issue bonus shares which were number assessable as income in the hands of the shareholders. It is to avoid these artifices and force such companypanies to declare the minimum statutory dividends, though in the light of the changed definition of dividend under s. 2 6A profits may attract tax even when they reach the shareholder in capitalised forms, or where they are distributed to them on liquidation from accumulated profits over the years they will be chargeable as dividends. In cases where the provisions have number been companyplied with, the Income-tax Officer with the previous approval and companysent of the Inspecting Assistant Commissioner will get jurisdiction to make an order if at the time of the passing of the order it is found that the companypany has number distributed by way of dividends within twelve months immediately following the accounting year less than the statutory percentage of its total income of the accounting year as- reduced by the amount of taxes payable by the companypany and in the case of banking companypanies the amount actually carried to a reserve fund under a statutory companypulsion. Though the Income-tax Officer has jurisdiction to pass an order under sub-s. 1 he has to make a regular assessment on the companypany under S. 23 which he cannot do if in fact a dividend had been declared before the making of that order, as otherwise the companypanys undistributed balance which is assessed by the Income-tax Officer would exceed its companymercial profits. There is also a likelihood of double taxation because number only the companypany is charged with super-tax for number distributing the dividends, but also it will be assessed on the dividends it has in fact distributed to income-tax and once again super- tax. Such a result was number intended. As the companypany can only declare dividends in general meeting from the profits earned by it, and when that is declared and paid the Income- tax Officer though for the number-fulfilment ofthe companyditions prescribed in the section may seek to reopen ithe cannot make an assessment in cases where the dividend has actually been declared and paid before the date of his order.In this view, we think the High Court was right in answering the question in the affirmative.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2134 of 1970. Appeal by special leave from the judgment and order dated March 5, 1970 of the Madhya Pradesh High Court in Indore Bench in Second Appeal No. 618 of 1964. Rajendra Chowdhry, for the appellant. C. Bhartari, D. N. Mishra and J. B. Dadachanji, for, respondent No. 1. The Judgment of the Court was delivered by BEG, J. This is a Defendants appeal by Special Leave against the judgment and decree of the High Court of Madhya Pradesh allowing a second appeal in a partition suit between members of a family governed by Muslim law. The Defendant- Appellant and the Plaintiff-Respondent are both sons of Kadir Ali Bohra who died on 5-4-1952 leaving behind five sons, a daughter and his widow as his heirs. It appears that Kadir Ali had incurred debts so heavily that all his property would have been swallowed up to liquidate these. Three of his sons, namely, Ghulam Abbas, Defendant No. 1, Abdullah, Defendant No. 2, and Imdad, Defendant No. 3, who had prospered, came to his rescue so that the property may be saved. But, apparently, they paid up the debts only in order to get the properties for themselves to the exclusion of the other two sons, namely, Kayyumali, Plaintiff- Respondent, and Nazarali, Defendant No. 4, who executed, on 10-10-1942, deeds acknowledging receipt of some cash and moveable properties as companysideration for number claiming any rights in future in the properties mentioned in the deeds in which they gave up their possible rights in future. The executant of each deed said I have accordingly taken the things mentioned above as the equivalent of my share and I have out of free will written this. I have numberclaim in the properties hereafter and if I put up a claim in future to any of the properties I shall be proved false by this document. I shall have numberobjection to my father giving any of the properties to my other brothers During the fathers life-time, when all chance or expectation of inheritance by either Kayyumali or Nazarali companyld be destroyed by disposition of property, neither of these two raised his little finger to object. The only question before us number is whether the Plaintiff and Defendant No. 4 are estopped by their declarations and companyduct and silence from claiming their shares in the properties companyered by these deeds. The first Appellate Court, the final companyrt on questions of fact, recorded the following findings, after examining the, whole set of facts before it, to companyclude that the plaintiff and defendant No. 4 were estopped from claiming their shares in the inheritance In the instant case, it is evident that the release deeds Ex.D/2 and Ex.D/3 were executed by the plaintiff and defendant No. 4, Nazarali, when the defendants NO. 1, 2 and 3 had with their labour and money straightened the status of his father Kadar Ali and had cleared up the debts which would have devoured the, whole property of Kadar Ali and the plaintiff was doing numberhing and was in a way a burden to his father. In such state of things when the plaintiff and defendant No. 4 executed the release deeds in question, it can be said that it was a family settlement to prevent the future disputes that may arise and to secure the peace and happiness in the family of the parties and thereby induced the defendants No. 1, 2 and 3 to believe that the plaintiff would number claim a share in the suit properties and led them to discharge the debts due to Kadar All and to be in affluent circumstances themselves as they are at present and the plaintiff number seeks benefit of it against his own past undertakings. The High Court reproduced the passage, quoted above, from the judgment of the First Appellate Court, without any dissent from any of the findings of fact companytained there. It specifically held that the Court below was companyrect in finding that companysideration had passed the Plaintiff and Defendant No. 4 for the relinquishment of their future possible rights of inheritance. It proceeded on the assumption that, it the law had number prohibited the transfer of his right of inheritance by a Muslim heir, an estoppel would have operated against the Plaintiff and Defendant No. 4 on the findings given. It held that the rule. of Muslim Personal law on the subject has the same effect as Section 6 a of the Transfer of Property Act which lays down The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred. It pointed out that, although, Section 2 of the Transfer of Property Act provided that numberhing in the second Chapter of the, Act will be deemed to affect any rule of Mahomedan Law, so that section 6 a companytained in Chapter 2 companyld number really be applied, yet, the effect of Mahomedan Law itself was that the chance of a Mahomedan heir-apparent succeeding to an estate cannot be the subject of a valid transfer or lease See Mullas Principles of Mahomedan Law-17th Edn. ss 54, page 45 . After equating the effect of the. rule of Mahomed an Law with that of Section 6 a of the Transfer of Property Act, the High Court applied the principle that numberestoppel can arise against statute to what it companysidered to be an estoppel put forward against a rule of Mahomedan law. The High Court had relied on a decision of the Madras High Court in Abdul Kafoor v. Abdul Razack l , which had been A.I.R. 1959 Mad. p. 131. followed by the Kerala High Court without giving fresh reason in Valanhivil Kunchi v. Kengayil Pattikavil Kunbi Avulla 1 in preference to the view adopted by the Allahabad High Court in Latafat Hussain v. Hidayat Hussain 2 followed by the, Travancore Cochin High Court in Kochunni Kachu Muhammed v. Kunj Pillai Muhammed 3 The principal question for decision before us is whether the Madras or the Allahabad High Court view is companyrect. The Madras High Court, in Abdul Kapoors case supra had specifically dissented from the Allahabad view in Latafat Hussain case supra on the ground that, if an estoppel was allowed to pleaded as a defence, on the strength of relinquishment of a spes successionis for companysideration, the effect companyld be to permit the pro visions of Mahomedan Law to be defeated. Hence, it held that such an attempt would be struck by section 23 of the Indian Con tract Act. The object however, of the rule of Mahomedan law which does number recognise a purported transfer of a spes succession is as a legally valid transfer at all, is number to prohibit anything but only to make it clear what is and what is number a transferable right or interest in property just as this is what section 6 a of Transfer of Property Act is meant to do. Its purpose companyld number be to protect those who receive companysideration for what they do number immediately have so as to be able to transfer it at all. It companyld, if protection of any party to a transaction companyld possibly underlie such a rule, be more the protection of possible transfers so that they may know what is and what is number a legally enforceable transfer. With due respect, we are unable to companycur with the view of the Madras High Court that renunciation of an expectancy, as a purported but legally ineffective transfer, is struck by Section 23 of the Indian Contract Act. As it would be void as a transfer at all there was numberneed to rely on Section 23 Contract Act, If there was numbertransfer. of property at all, which was the companyrect position but a simple companytract, which companyld only operate in future, it was certainly, number intended to bring about an immediate transfer which was all that the rule of Muslim law invalidated. The real question was whether quite apart from any transfer or companytract, the declarations in the deeds of purported relinquishment and receipt of valuable companysideration companyld number be parts of a companyrse of companyduct over a number of years which, taken as a whole, created a, bar against a successful assertion of a right to property when that Tight actually came into being. An equitable estoppel operates, if its elements are established, as a rule of evidence preventing the assertion of rights which may otherwise exist. A.F.R. 1964 Kerala P. 200 2 A I R. 1936 All. 573. A.I.R. 1956 Travancore 217. High Court in Asa Beevi v. Karuppan 1 where Macnaghtens Principles and Precedents of Moohumudan Law, Sir Roland Wilsons Digest of Anglo-Mohhamadan Law P. 260, and Ameer Alis Mohommedan Law Vol. II, third edition, p. 50-51 , and Tyabjis Muslim Law have been referred to in support of the companyclusion that ,here is a large preponderance of authority in favour of the view that a transfer or renuniciation of the right of inheritance before that right vests is prohibited under the Mahomedan Law. The whole discussion of the principle in the body of the judgment, however brings out that the real reason is number a prohibition but that there cannot be a renunciation of a right which is incohate or incomplete so long as it remains in that state. In fact, it is number companyrect to speak of any right of inheritance before it arises by the death of the predecessor who companyld have, during his life-time, deprived the- prospective heir of his expectation entirely by dispositions inter vivos. Sir Roland Wilson, in his Anglo Mohhamadan Law P 260, paragraph 208 states the position thus - For the sake of those, readers Who are familiar with the joint ownership of father and son according to the most widely prevalent school of Hindu Law, it is perhaps desirable to state explicitly that in Muhammadan, as in Roman and English Law, nemo est heres viventis-a living person has, numberheir. An heir-apparent or presumptive has numbersuch reversionary interest as would enable him to object to any sale or gift made by the owner in possession see Abdul Wahid, L.R. 12 I.A., 91, and 11 Cal. 597 All., 456 1885 which was followed in Hasan Ali, 1 1 All. 456 1889 . The companyverse is also true a renunciation by an expectant heir in the lifetime of his ancestor is number valid, or enforceable against him after the vesting of the inheritance. This is a companyrect statement, so far as it goes, of the law, because a bare renunciation of an expectation to inherit number bind the expectant heirs companyduct in future. But if the expectant heir goes further and receives companysideration and so companyducts himself as to mislead an owner into number making dispositions of his property inter vivos the expectant heir companyld be debarred from setting up his right when it does unquestionably vest in him other words, the principle, of estoppel remains untouched by this statement. As the Madras Full Bench pointed out, the subject was dis- cussed more fully, in Ameer Alis Mohammedan Law Vol. 11 , than elsewhere. There we find the reason for or the object underlying the rule. It is that there is numberhing to renounce in such a case because an expectancy remains at most before it has mate- 1 1918 41 Madras I.L.R. 365. rialized only an incohate right. It is in this light that the following observations in Hurmoot-Ool-Nisa Begum v. Allehdia Khan, is explained by Ameer Ali According to the Mahomedan Law the right of inheritance may be renounced and such renunciation need number be express but may be implied from the ceasing or desisting from prosecuting a claim maintainable against another. Ameer Ali explained, citing an opinion of the law officers, given in Khanum Jan v. Jan Bibi 2 .lm15 Renunciation implies the yielding up of a right already vested, or the ceasing or desisting from prosecuting a claim maintainable against another. It is evident that, during the life-time of the mother the daughters have numberright of inheritance and their claim on that account is number maintainable against any person during her life-time. It follows, therefore, that this renunciation during the mothers life-time of the daughters shares is null and void it being in point of fact giving up that which had numberexistence. In view of the clear exposition of the reason for the rule companytained in the authorities relied upon by the Full Bench of the Madras High Court in Asa Beevis case supra , we think that it described, by oversight, a rule based on the disability of a person to transfer what he has number got as a rule of prohibition enjoined by Mohamedan Law. The use of the word prohibited by the Full Bench does number really bring out the object or character of the rule as explained above. It may be mentioned here that Muslim Jurisprudence, where theology and moral companycepts are found sometimes mingled with secular utilitarian legal principles, companytains a very elaborate theory of acts which are good because they proceed from hasna , those which are bad because, they exhibit qubuh , and those which are neutral per se. It classifies them according to varying degrees of approval or disapproval attached to them see Abdur Rahims Muhammadan Jurisprudence P. 105 . The renunciation of a supposed right, based upon an expectancy, companyld number, by any test found there, be companysidered prohibited. The binding force in future of such a renunciation would, even according to strict Muslim Jurisprudence, depend upon the attendant circumstances and the whole companyrse of companyduct of which it forms a part I In other words, the principle of an equitable estoppel, far from being opposed to any principle of Muslim law will be found, on investigation, to be companypletely in companysonance with it. 1 1871 17 W.R.P.C. 108 2 1827 4 S.D.A. Rep. 210. As already indicated, while the Madras view is based upon the erroneous assumption that a renunciation of a claim to inherit in future is in itself illegal or prohibited by Muslim law, the view of the Allahabad High Court, expressed by Suleman, C.J., in Latafat Hussains case supra while fully recognising that under the Mahomedan law relinquishment by an heir who has numberinterest in the life- time of his ancestor is invalid and void, companyrectly lays down that such an abandonment may, nevertheless, be part of a companyrse of companyduct which may create an estoppel against claiming the right at a time when the right of inheritance has accrued. After companysidering several decisions, including the Full Bench of, the Madras High Court in Asa Beevis case supra Suleman, C.J., observed at page 575 The question of estoppel is really a question arising, under the Contract Act and the Evidence Act, and is number a question strictly arising under the Mahomedan Law. He pointed out at page 575-576 It has been held in this Court that companytingent reversioners can enter into a companytract for companysideration which may be held binding on them in case they actually succeed to the, estate See 19 A.L.J. 799, and 21 A.L J. 235. It was pointed out in 24 A.L.J. 873, at PP. 876-7, that although a reversionary right cannot be the subject of a transfer, for such a transfer is prohibited by s. 6, T.P. Act, there was. numberhing to prevent a re- versioner from so acting as to estop himself by his own ,conduct from subsequently claiming a property to which he may succeed. Among other cases reliance was placed on the pronouncement of their Lordships of the Privy Council in 40 All 487, where a reversioner was held bound by a companypromise to which he was a party. Incidentally, we may observe that, in Mohammad Ali. Khan v. Bisar Ali Khan, 1 the Oudh Chief Court has relied upon Hurmoot-Ool-Nisa Begums. case supra to hold that according to Mahomedan Law there may be renunciation of the right to inheritance and such renunciation need number be express but may be implied from the ceasing or desisting from prosecuting a ,claim maintainable against another. As we are clearly of opinion that there is numberhing in law to bar the application of the principle of estoppel, companytained in Section 115 of the Evidence Act, against the plaintiff and A.I.R. 1928 Oudh 67. Defendant No. 4, upon the totality of facts found by the final Court of facts, which were apparently accepted by the High Court,, it is number necessary for us to deal at length with the question whether the facts found companyld give rise to the inference of a family settlement in a technical sense. It is true that in Latafat Hussains case supra Suleman, J., had observed that the companyclusion of the Subordinate Court, that there had been an arrangement between a husband and a wife in the nature of a family settlement which is binding on the plaintiff, was companyrect. This was held upon circumstances which indicated that a husband would number have executed a deed of Wakf if the wife had number relinquished her claim, to inheritance. In other words, an arrangement which may avoid future disputes in the family, even though it may number technically be a settlement or definition of actually disputed claims, was referred to broadly as a family arrangement. It was in this wide sense that in the case before us also, the first Appellate Court had companysidered the whole set of facts and circumstances examined by it to be sufficient to raise the inference of what it described as a family settlement. As our law relating to family arrangements is based on English law, we may refer here to a definition of a family arrangement in Halsburys Laws of England, 1 where we find A family arrangement is an agreement between members of the same family intended to be generally and reasonably for the benefit of the family either by companypromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour. We also find there The agreement may be implied from a long companyrse of ,dealing, but it is more usual to embody or to effectuate the against in a deed numberwhich the term family arrangement is applied. It is ,pointed out there Matters which would be fatal to the validity of similar transactions between strangers are number objections to the binding effect of family arrangements. As we have already indicated, it is enough for the decision of this case that the plaintiff and defendant No. 4 were estopped by their companyduct, on an application of Section 115 Evidence Act, from claiming any Tight to inheritance which accrued to them, on their fathers death, companyered by the deeds of relinquishment for companysideration, irrespective of the question whether the, deeds companyld operate as legally valid and effective surrenders of their spes successionis. Upon the facts and circumstances in Halsburys Laws of England, 3rd. edn. Vol. 17, p. 215,216. the case found by the companyrts ,below we hold that the plaintiff and defendant No. 4 companyld number, when rights of inheritance vested in them at the time of their fathers death, claim, these as such a claim would be barred by estoppel. The result is that we allow this appeal, set aside the judg- ment and the decree of the High Court, and restore that of the first Appellate Court. In the circumstances of this case, we order that the parties will bear their own companyts.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION C.A. No. 1100 of 1967. Appeal by certificate from the judgment and decree dated January 25, 1966 of the Punjab High Court at Chandigarh in Civil Regular First Appeal No. 362 of 1964. K. Daphtary, M. C. Chagla, S. K. Mehta, K. R. Nagaraja, ill. Oamaruddin, K. S. Suri and R. K. Melita, for the appellants. C. Setalvad, S. T. Desai and I. N. Shroff, for respon- dent No. 1. The Judgment of the Court was delivered by DWIVEDI, J. This is an appeal against the judgment and decree of the High Court of Punjab and Haryana, dated January 25, 1966. The High Court reversed the judgment and decree of the Subordinate Judge, 1st Class, Amritsar, dated August 17, 1964. The Subordinate Judge had decreed the plaintiffs suit for possession of the premises by specific performance of the agreement to sell. The High Court dismissed the suit. Brij Mohan Mehra, one of the respondents, was the defendant, and the appellants were the plaintiffs in the suit. There was an agreement between Dr. Jiwan Lal, the first appellant, Shri Krishan Das the second appellant, and one Bal Kishan Das, the predecessor in interest of the appellants Nos. 3 to 8 and Brij Mohan Mehra. It was companycluded on December 9, 1959. By that agreement Brij Mohan agreed to sell the premises in suit to Dr. Jiwan Lal, Shri Kishan Das and Bal Kishan Das. The sale companysideration was Rs. 122500/-. The prospective vendees paid Rs. 10,000/- as earnest money. The balance of the sale companysideration was to be paid by them at the time of the registration of the sale deed. The material terms incorporated in cls. 5, 6, 7 and 9 of the agreement are set out here The sale deed shall be executed and registered by the vendor in favour of the purchasers within three months from the date when the premises are vacated by the Income-tax Authorities and intimation is given to the purchasers by the vendor per registered post. In the event of the above said premises, which is the subject matter of sale number being vacated by the Income-tax Authorities or is subsequently requisitioned by the Government prior to the registration of the sale deed the vendor shall refund to the purchaser the sum of Rs. 10,000/- Rupees ten thousand only received by the vendor as earnest money plus interest at the rate of 6 per cent per annum. If even after the vendor having satisfied the purchasers regarding, the title of the premises which are the subject matter of sale, the Purchasers do number companyplete the sale-deed and have it registered within the stipulated period as mentioned in clause No. 5 above, the earnest money so paid by the Purchasers to the Vendor shall stand forfeited for number-performance of the companytract here- inbefore entered into, and the Vendor shall be at liberty to retain or resell the property. From the date from which the above said premises are vacated by the Income-tax Authorities to the date of execution and registration of the sale-deed the Vendor shall affect such repairs as may be necessary with the companysent of the Purchasers at the expense of the Purchasers. The purchasers shall be liable to pay after such repairs etc. are effected. all expenses and incidentals incurred in companynection therewith by the vendor before the sale deed is executed and tendered for registration. The purchasers shalt also pay for and on account of the Chowkidar to look after and maintain the companydition of ,the premises in good order till the execution and registration of the sale-deed. The premises were requisitioned by the Additional District Magistrate, Amritsar on January 23, 1960. Thereafter Brij Mohan Mehra refused to execute the sale-deed in spite of the requests of the prospective vendees. So the plaintiffs instituted their suit. Their case was that the premises were requisitioned on the manipulation of Brij Mohan Mehra, that clause 6 of the agreement was intended to be for the benefit of the prospective vendees, that the prospective vendees waived the companydition in cl. 6, that Brij Mohan Mehra companyld number put an end to the companytract by relying on cl. 6, and that the plaintiffs have always been ready and willing to perform their part of the obligation under the agreement. Brij Mohan Mehra companytested their claim. His case was that the agreement was a companytingent agreement, that it became void on the requisitioning of the premises, that numbercontract ever came to existence prior to the requisitioning of the premises, that he did number manipulate for the requisition of the premises, that the plaintiffs companyld number waive the companydition in cl. 6, that they were number ready and willing to perform their obligation under the agreement and that they were guilty of laches and should be deemed to have abondoned their rights under the agreement. The Subordinate Judge held that the plaintiffs were always ready and willing to perform their obligation under the agreement. The agreement did number become void on the requisitioning of the premises and Brij Mohan Mehra had manipulated for the requisitioning of the premises. He companyld number rescind the companytract by relying on cl. 6. The plaintiffs waived the companydition in cl. 6 and insisted on buying the property. They were number guilty of laches and they did number abondon their claim under the agreement. On those findings, the Subordinate Judge decreed the plaintiffs suit. On appeal by Brij Mohan Mehra, the High Court reversed the decree and dismissed the suit. The High Court held that cl. 6 of the agreement imposed obligations on Brij Mohan Mehra to sell and on the prospective vendees to buy only if vacant possession companyld be delivered to the latter and number otherwise. As soon as the premises were requisitioned the entire companytract fell through and thereafter there subsisted numberenforceable obligation on either side. The prospective vendees companyld number waive the companydition in cl. 6. On those findings and without expressing any opinion about the other findings of the Subordinate Judge, the High Court reversed his decree. The following points arise for determination by this Court. Was there a companycluded companytract? Was the number-requisitioning of the premises a companydition precedent to the performance of the sellers obligation to sell Was the number-requisitioning of the premises a companydition precedent to the performance of the buyers obligation to buy? Could the buyers waive the companydition and insist on the performance of the sellers obligation ? Were the buyers guilty of laches and was there abondonment of their claim ? Re. Point No. 1. Neither party has argued that there was numberformation of the companytract between the parties. The companytract was number made subject to the number-requisitioning of the premises. By cl. 1 of the agreement, the vendor agreed to sell and the purchasers agreed to purchase the premises. Clause 5 makes the vendor liable to execute a sale deed within a certain time. So there was a companycluded companytract between the parties. The seller became liable to sell and the buyer became liable to buy from the very inception of the companytract. Re. Point No. 2. Even though the agreement was drawn on the legal advice of one Mohan Singh, a lawyer for both parties, clause 6 of the agreement does number expressly subject the sellers obligation to sell to the companytingency of the number-requisitioning of the premises. Nor does it say that the companytract would companye to an end on the requisitioning of the premises. Brij Mohan Mehra has taken care to use clear and specific language in cls. 7 and 9 to safeguard his interests. If it were intended that his obligation to sell should companye to an end on the requisitioning of the premises, there is numberreason why cl. 6 should number have expressed that intention fairly clearly. Brij Mohan Mehra, the prospective vendor, is a businessman. It is difficult to companyceive that he would have negotiated for the right to rescind the companytract in the event of the requisitioning of the premises, for the sale price of a vacant premises is usually higher than the sale price of an occupied premises. By subjecting his obligation to sell to the number-requisitioning of the premises he would have put himself at a disadvantage. It is evident from cl. 6 that the object of the prospective vendees was to obtain vacant possession of the premises. But we are unable to discern anything in the agreement to show that it was also the object of the prospective vendor. As already indicated, he stood to gain numberhing from that object. Clause 9 of the agreement provides that the vendor would make repairs between the date of vacating the premises by the Income-tax Authorities and the date of the execution of the sale deed with the companysent of the vendees at their expense. The want of a provision in the agreement fixing responsibility for the repairs after the requisitioning of the premises would number suggest that the number-requisitionin of the premises was a companydition precedent to the performance of the sellers obligation to sell. After the requisition, the repair expenses would be a matter to be settled between the requisitioning authority and the owner of the premises. Accordingly a provision like the one in cl. 9 companyld number be inserted in the agreement. According to cl. 6, the vendor becomes liable on the requisitioning of the premises to refund the earnest money of Rs. 10,000/- with interest at 6 per annum. The term for payment of interest should number present any difficulty in the calculation of interest if it is held that the sellers obligation to sell was number subject to the companytingency of the number-requisitioning of the premises. We are satisfied that the interest became payable number from the date of the number- requisitioning of the premises, but from the date of the payment of the earnest money. In other words, the interest would accrue from December 9, 1959, the date on which the agreement was executed. That it is so, is also evident from the companyduct of Brij Mohan Mehra. When the premises were requisitioned he sent a letter on February 11, 1960 along with a cheque for Rs. 10,103.28 to the prospective vendees. In the letter he has expressly stated that the interest has been calculated from December 9, 1959 to, February 11, 1960. The accrual of interest after the date of the requisitioning of the premises companyld be prevented by tendering the amount of the earnest money to the prospective vendees. The term for interest in cl. 6 would number therefore indicate that the sellers obligation to sell was subject to the companydition of the number-requisitioning of the premises. In our view there is numberhing in the agreement in general and in cl. 6 in particular to show that the, number-requisitioning of the premises was a companydition precedent to the performance of the sellers obligation to sell the premises, or that the companytract came to an end on the requisitioning of the premises. Re. Point No. 3 Mohan Singh is a lawyer. The agreement was drawn with his legal advice. He has appeared as a witness for Brij Mohan Mehra. He has stated that the prospective vendees wanted to purchase the premises for setting up a hotel. Naturally, they would be keen on getting vacant possession of the premises. Accordingly they would negotiate for the right to rescind the companytract in the event of the requisitioning of the premises. Clause 6 expressly imposes an obligation on the vendor to refund the earnest money with interest. There is impliedly created thereby a. companyresponding right in the buyers to demand back the earnest money with interest. The right to demand back the earnest money necessarily implies the right to rescind the companytract. The refund companyld number be claimed as long as the companytract remained in force. We think that the number-requisitioning of the premises was a companydition precedent to the performance of. the buyers obligation to buy the premises. When the premises were requisitioned the buyers companyld rescind the companytract, if they so desired. Re. Point No. 4 As already discussed, cl. 6 was inserted in the agreement for the, exclusive benefit of the vendees and number for the benefit of the vender as well as the vendees. So the vendees companyld waive the companydition precedent specified in el. 6. In Dalsukh M. Pancholi v. The Guarantee Life and Employment Insurance Co., Ltd. and others 1 , there was an agreement for sale of immovable property. The property was under attachment by an order of the Court and was about to be sold by public auction. A certain amount was paid by the prospective vendee as earnest money. Clause 4 of the agreement provided that, the balance of the sale companysideration would be paid before the Sub-Registrar at the time of the registration of the sale deed within 30 days of the approval of the Court to the agreement. The Court did number Approve the offer. Thereupon the vendor asserted that the companytract has companye to an end, while the vendee companynter-claimed that as he has waived the companydition in cl. 4, the companytract subsisted. The, Privy Council held that as the companydition in cl. 4 was number exclusively for the benefit of the purchaser it companyld number be waived by him and that the entire companytract fell through. It would follow that where a stipulation is for the exclusive benefit of one companytracting party and does number create liabilities against him he can waive it unilaterally. See also Hawksley v. Outram 2 and Morrell v. Studd and Millington 3 Re. Point No. 5 The agreement was made on December 9, 1959. The premises were requisitioned by an order dated January 23, 1960. Brij Mohan Mehra filed an appeal against the order of requisition. It was dismissed on August 1, 1960. The suit was instituted on November 5, 1962. As the appeal was pending, the plaintiffs companyld reasonably wait until August 1, 1960 in the hope that the order of requisition might be set aside in appeal. So numberlegitimate objection can be taken on the score of delay until August 1, 1960. The suit was instituted within two years, three months and four days of the dismissal of appeal on August 1, 1960. It is number to be seen whether this delay is such as would disentitle the plaintiffs to the relief of specific performance of the companytract. In Iindsay Petroleum Co. v. Hurd 4 , Lord Selborne said The doctrine of laches in companyrts of equity is number an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy either because the party has by his companyduct done that which might fairly be regarded as an equivalent to a waiver of it, or where by his companyduct and neglect he has, though perhaps number waiving that remedy put the other party in a situation in which it would number be reasonable to place him if the A.I.B,. 1947 P.C. 182. 3 1913 2 Ch. 648 at page 660. 2 1892 3 Ch. 359 at page 376 Law Reports 5 P.C. 221 at page 239 remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. In his written statement Brij Mohan Mehra pleaded only waiver and number also that he would be prejudiced by specific performance. There was companysiderable companyrespondence between the parties between February 1 1, and April 27, 1960. In their letters the prospective vendees repeatedly asked Brij Mohan Mehra to execute a sale deed in accordance with the agreement. They also said that they were ready and willing to pay the sale companysideration stipulated in the agreement. But Brij Mohan Mehra persisted in his refusal to execute the sale deed. Eventually on April 17, 1960 one Sardari Lal Sachdev, Advocate, gave numberice on behalf of the prospective vendees to Shri Hans Raj Mittal, Advocate, for Brij Mohan Mehra. It is said in that numberice that the prospective vendees would attend the office of the Sub-Registrar, Amritsar on April 30, 1960 between 10 A.M. and 12 numbern and that Brij Mohan Mehra should reach there to get the sale deed registered. As April 30, 1960 was a holiday, the prospective vendees later sent a telegram to Brij Mohan Mehra to appear before the Sub-Registrar and produced before him a sum of Rs. 1,12,500/-. The money was companynted by the clerk of the Sub-Registrar. Brij Mohan Mehra did number appear before the Sub-Registrar on that date. The Sub-Registrar has supported this version of the plaintiffs. Dr. Jiwan Lal, one of the plaintiffs, has deposed that even after April 29, 1960, he had been asking Brij Mohan Mehra to execute a registered sale deed but he had been evading. One Mr. Ranbir Mehta went along with him to Brij Mohan Mehra for the same purpose. But Brij Mohan Mehra told him that as the premises had been attached by the Rani of Kashmir he should wait for some time. Dr. Jiwan Lal then added Thereafter I went and asked him to companyplete the same but he companytinued to evade. There appears to be numbercross-examination on this part of his statement on behalf of Brij Mohan Mehra. Dr. Jiwan Lal denied in his cross-examination that the plaintiffs had abondoned their claim. It is number possible to believe that the plaintiffs, who were so insistent on the execution of the sale deed in their favour and who had actually appeared before the Sub-Registtar with the requisite amount of money for payment to the vendor, would abandon their claim after April 29 or August 1, 1960. There is numberreason to disbelieve Dr. Jiwan Lals statement that even after April 29, 1960, he had been pressing upon Brij Mohan Mehra to execute a registered sale deed. In our opinion the plaintiffs did number abandon their rights under the agreement. The institution of the suit after two years does number appear to have caused any disadvantage to Brij Mohan Mehra. As already stated earlier, there is numbersuch allegation in his written statement number is there any evidence to that effect. Brij Mohan Mehra has admitted in his cross- examination that the prices of properties started depreciating in or about October 1962 when there was Chinese aggression on India. The suit was instituted after the Chinese aggression. So it cannot be said that the specific performance, of the agreement was likely to cause any prejudice to Brij Mohan Mehra on the date of the institution of the suit. The suit cannot accordingly be, dismissed on account of delay. In view of our earlier findings, it is number necessary to decide whether the requisitioning of the premises was a manoeuvre of Brij Mohan Mehra to slide back from the agreement. We set aside the judgment and decree of the High Court. The suit of the plaintiffs is decreed. Brij Mohan Mehra is directed to execute a sale deed in favour of the plaintiffs in terms of the agreement, dated December 9, 1959, on the plaintiffs tendering to him a sum of Rs. 112500/- and necessary expenses for execution and registration of the sale deed within two months from today. If Brij Mohan Mehra fails to execute the sale deed, the plaintiffs should deposit the requisite amount in the trial companyrt within three months from today and apply for the execution of the decree for execution of the sale deed.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1190 and 1191 of 1969. Appeal by special leave from the judgment and order dated June 24, 1968 of the Orissa High Court at Cuttack in O.J.C. Nos 464 and 463 of 1967. A. Ramchandran, S. P. Nayar, B. D. Sharma and R. N. Sachthey, for the appellants in both the appeals . Gobind Das and B. Parthasarathi, for the respondents in both the appeals . The Judgment of the Court was delivered by KHANNA, J. Whether numberice issued under section 12 8 of the Orissa Sales Tax Act, 1947 Act 14 of 1947 hereinafter referred to as the Act should be quashed on the ground that it does number mention the reasons for the issue of the numberice is the main question which arises for determination in these two appeals, Nos. 1190 and 1191 of 1969, which have been file by special leave against the companymon judgment of the Orissa High Court allowing writ petitions filed by the respondents against the appellants. For sake of companyvenience we may give the facts giving rise to appeal No. 1190 of 1969 as it is the companymon case of the parties that the decision in that appeal would govern the other appeal also. The respondent in appeal No. 1190 is a dealer registered under the Act. The matter relates to the assessment for 1963-64. The date of the order of assessment is number on file but it is stated that it was made sometime in the later part of 1964. On March 30, 1967 the Sales Tax Officer, Intelligence Wing, Vigilance, Berhampur made a search of the business premises of the respondent and seized several account books. On the following, day further search was made and some additional account books were taken into possession. Later on that day, viz, March 31, 1967 the Sales Tax Officer issued the following numberice under section 12 8 of the Act to the respondent Notice to a dealer under section 12 8 of the Orissa Sales Tax Act See rules 22, 23 and 28 2 To M s Utteswar Rice Mills Dealer At P.O. Berhampur, GA-1 2127-A Address Whereas I have reason to believe that your turnover for the quarter ending 1963-64 on which Sales Tax was payable under the Orissa Sales Tax Act, 1947 has escaped assessment has been under assessed. You are hereby required to submit within one calendar month from the date of receipt of this numberice a return in Form IV enclosed showing the particulars of your turnover for the year ending 1963-64. You are also hereby required to attend in person or by agent at my office at Berhampur on 11-5-67 at 1 1 A.M. and thereto produce or cause to be produced the accounts and documents specified on the reverse and also to show cause why in addition to the amount of tax that may be assessed on you a penalty number exceeding one and a half time that amount should number be imposed on you under sub-section 5 of section 12 of the Act. In the event of your failure to companyply with all the terms of this numberice I shall proceed to assess you under section 12 of the Act to the best of my judgment without further reference to you. Sd - Illegible Signature Sales Tax Officer Intelligence Wing, Vigilance Berhampur Place-Berhampur Date-31-3-67. The numberice was received by an employee of the respondent. Appearance was thereafter put in on behalf of the respondent before the Sales Tax Officer and a companyy of the old return which had been earlier filed in accordance with section 11 of the Act was again filed before the Sales Tax Officer. According to the respondent, appearance was put in on its behalf on several occasions with a view to know the reason for the issue of the above numberice, but the respondent was number informed of that reason. It is further stated that the Sales Tax Officer recorded the statements of a number of witnesses behind the back of the respondent with the intention of making reassessment under section 12 of the Act. Request was made on behalf of the respondent to the Sales Tax Officer for being furnished with companypies of those statements so that the respondent might be in a position to know the reason for the issue of the numberice. Copies of those statements were, however, number supplied and the appli- cation filed by the respondent for obtaining companyies of the statements was rejected by the Sales Tax Officer. It was mentioned by the Sales Tax Officer that the question of grant of companyies of the statements would be companysidered if the statements were used against the respondent. The respondent filed a revision petition against the order rejecting that application, but the revision petition too was dismissed. The respondent thereafter filed petition under articles 226 and 227 of the Constitution in the High Court on December 26, 1967. The High Court accepted the writ petition on the ground that the Sales Tax Officer had number indicated any reason for issuing numberice under section 12 8 of the Act. This fact,, in the opinion of the High Court, was sufficient to warrant quashing of the numberice. The High Court in this companytext relied upon its earlier decision in the case of B. Patnaik Mines P Ltd. v. N. K. Mohanty Sales Tax Officer 1 . It was held in the earlier case that the Sales Tax Officer had numberjurisdiction under section 12 8 of the Act to issue numberice for making a fishing equiry I.L.R. 1967 Cuttack 446. without indicating therein the reason for the alleged under assessment. In appeal before us Mr. Ramachandran on behalf of the appellants has referred to the provisions of section 12 8 of the Act and has argued that it is number essential to give the reasons in the numberice issued under the above provision of law. The impugned numberice, according to the learned companynsel, cannot be quashed for number-mention of the reasons. The above stand has been companytroverted by Mr. Gobind Das on behalf of the respondent and according to him, the failure of the Sales Tax Officer to mention the reasons which led to the issue of the impugned numberice would vitiate the numberice. There is, in our opinion, companysiderable force in the stand taken in this respect by the learned companynsel for the appellants. Section 12 of the Act deals with assessment of tax. Sub-sections 5 and 8 of the above section read as under If upon information which has companye into his possession, the Commissioner is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless without sufficient causes failed to apply for registration, the Commissioner shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period and all subsequent periods and the Commissioner may direct that the dealer shall pay, by way of penalty, in addition to the amount so assessed, a sum number exceeding one and a half times that amount Provided that numberpenalty shall be levied for the quarter during which the dealer first or again becomes liable to pay tax under this Act. If for any reason the turnover of a dealer for any period to which this Act applies has escaped assessment or has been under-assessed or where the tax has been companypounded when companyposition is number permissible under this Act and the rules made thereunder, the Commissioner may at any time within thirty six months from the expiry of the year to which that period relates call for a return under sub-section 1 of section 11 and may proceed to assess the amount of tax due from the dealer in the manner laid down in sub- section 5 of this section and may also direct, in cases where escapement or under assessment or companyposition is due to the dealer having companycealed particulars of his turnover or having without sufficient cause furnished incorrect particulars thereof, that the dealer shall pay, by way of penalty, in addition to the tax assessed under this sub-section, a sum number exceeding one and a half times of the said tax so assessed. The Orissa Sales Tax Rules, 1947 hereinafter referred to as the rules have been framed by the State Government in exercise of the powers companyferred by section 29 of the Act. According to sub-section 1 of that section, the State Government may subject to the companydition of previous publication make rules for carrying out the purposes of the Act. Sub- section 2 of that section mentions the subjects, without prejudice to the generality of power given by sub-section 1 , regarding which rules may prescribe. Section 29-A requires that all rules made under section 29, and numberifications issued under section 3-B, sub-section 1 of section 5 and section 6 shall, as soon as possible after they are made or published, as the ,case may be, be laid before the Assembly for a total period of fourteen days which may be companyprised in one or more sessions. Rule 23 may be reproduced below Calling for return when turnover has escaped assessments or has been under-assessed- 1 If for any reason the turnover of sales or the turnover of purchases of a dealer has escaped assessment or has been under-assessed or has number been assessed due to the tax having been companypounded when companyposition is number permissible under the Act and those rules and it is proposed to assess it the Commissioner shall serve on the dealer a numberice in Form VI within one calendar month from the date of receipt of such numberice. Such numberice may also require the dealer to attend in person or by his agent at the office of the authority issuing the numberice on the date specified therein and to produce or cause to be produced the accounts and documents specified in the numberice. The relevant part of Form VI referred to in rule 23 is in the following words FORM VI To dealer Address 3-L498 Sup CI/73 Whereas I have reason to believe that your turnover of sales and or purchases for the quarter year ending on which tax payable under the Orissa Sales Tax Act has escaped assessment has been under-assessee has number been assessed due to the tax having been companypounded when companyposition is number permissible. You are hereby required to submit within one calendar month from the date of. receipt of this numberice a return in Form IV enclosed showing the particulars of your turnover for the quarter ending You are also hereby required to attend in person or by agent at my office at on at A.M. P.M. and there to produce or cause to be produced the accounts and documents specified on the reverse, and also show cause why in addition to the amount of tax that may be assessed on you a penalty number exceeding one and a half times that amount should number be imposed on you under sub-section 5 sub- section 8 of section 12 of the Act. In the event of your failure to companyply with all the terms of this numberice I shall proceed to assess you under section 12 of the Act to the best of my judgment without further reference to you. Place Signature Date Designation Section 12 8 of the Act reproduced above may be analysed its under There must exist reason for the belief that a the turnover of a dealer for any period to which the Act applies has escaped assess- ment or has been under-assessed or b the tax has been companypounded when companypo- sition is number permissible under the Act and the rules made thereunder. In cases mentioned in clause i the sales tax authority may at any time within 36 months from the expiry of the year to which the above mentioned period relates call for a return under section 1 1 1 of the Act. After taking the steps mentioned in clauses i and ii above, the sales tax authority may proceed to assess the amount of the tax due from the dealer in the manner laid down in section 12 5 of the Act The sales tax authority may also direct in cases where escapement or under-assessment or companyposition is due to the dealer having companycealed particulars of his turnover or having without sufficient cause furnished incorrect particulars thereof that the dealer shall pay penalty in addition to the tax assessed. Such penalty shall number exceed one and a half times the amount of the tax so assessed. Although the opening words used in section 12 8 are if for any reason and number if the sales tax authority has reason to believe, the difference in phraseology, in our opinion, should number make much material difference. A reason cannot exist in vacuum. Somebody must form the belief that reason exists and looking to the companytext in which the words are used, we are of the view that it should be the sales tax authority issuing the numberice who should have reason to believe that the turnover of a dealer has escaped assessment or has been under-assessed. The approach in this matter has to be practical and number pedantic. Any view which would make the opening words of section 12 8 unworkable has to be avoided. It may be numbered in this companytext that in Form VI appended to the rules, which has been prepared in pursuance of rule 23, the words used are whereas I have reason to believe that your turnover has escaped assessment In the case of Commissioner of Income Tax, Bengal v. Messrs Mahaltram Ramjidas 1 the Judicial Committee dealt with the provisions of section 34 of the Indian Income Tax Act, 1922 as it then existed. The section read as under 34, If for any reason income, profits or gains chargeable to income-tax has escaped assessment in any year or has been assessed at too low a rate, the Income-tax Officer may, at any time within one year of the end of that year, serve on the person liable to pay tax on such income, profits, or gains, or in the case of a companypany, on the principal officer thereof, a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or reassess such income, profits or gains, and the provisions of this Act shall so far as may be, apply accordingly as if the numberice were a numberice issued under that sub-section 1 1940 8 I.T.R. 442. Provided that the tax shall be charged at the rate at which it would have been charged had the income, profits or gains number escaped assessment or full assessment, as the case may be. The opening words of section 34 of the Indian Income Tax Act, as it then existed were similar to those of section 12 8 of the Act. The Judicial Committee while dealing with the language of section 34 observed Section 34 is unhappily and even ungrammatically phrased. It is expressed impersonally, and it fails to state by whom and by what procedure it is to be established that income, profits or gains have escaped assessment or have been assessed at too low a rate. There is fortunately numberdispute that the person who must make that decision is the Income-tax Officer, for, apart from the assessee, numberone else is in a position to say whether income has been assessed or at what rate it has been assessed. The omission to prescribe expressly what the nature of the decision should be and by what procedure it must be reached is all the more surprising because in other sections of the Act the legislature has been careful to define what is necessary in these respects. This circumstance was founded on by the learned Counsel for the respondents, who pointed out that where some fact had to be established merely prima facie to the satisfaction of the Income-tax Officer in the bona fide exercise of his discretion, this was expressed by such phraseology as When it appears to be Income- tax Officer, or if the Income-tax Officer has reason to believe. On the other hand, when the statute requires that the Income-tax Officer shall make a decision, which is final so far as he is companycerned, upon a matter of fact, the usual expression is if he is satis- fied. It was further observed The section, although, it is part of a taxing Act, imposes numbercharge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that companystruction should be preferred which makes the machinery workable, ut res valeat potius quam pereat. In view of the criticism levelled against the wording of section 34 of the Indian Income Tax Act, the above section was amended by Amendment Act of 1939 Despite the amendment made in section 34 of the Indian Income Tax Act, the Orissa Legislature, it would appear, has used phraseology in section 12 8 of the Act similar to that of section 34 of the Indian Income Tax Act, 1922 as it existed before the said amendment. The above decision of the Judicial Committee is Also an authority for the proposition that it is number necessary to intimate to the assessee the nature of the alleged escapement in the numberice which is issued to him under section 34 as it then existed of the Indian Income Tax Act, 1922. The numberice which was issued in that case did number give any particulars and was in the following words Whereas I have reason to believe that your income from business and other sources which should have been assessed in the financial year ending the 31st March, 1933, has wholly escaped assessment and I therefore propose to assess the said income that has escaped assessment. I hereby require you to deliver to me, number later than the 9th March, 1934, or within 30 days of the receipt of this numberice, it return in the attached form of your income from all sources which was assessable in the said year ending the 31st March, 1933. It was observed while dealing with the validity of the above numberice Accordingly their Lordships are of opinion that the Income-tax Officer is number required by the section to companyvene the assessee,.or to intimate to him the nature of the alleged escapement, or to give him an opportunity of being heard, before he decides to operate the powers companyferred by the section. In the opinion of their Lordships the view which the learned Judges of the High Court have taken of the section is too narrow, and the numberice sent to the respondents on 8th February, 1934, is in form a companypetent preliminary to a new assessment. In the case of K. S. Rashid and Son and Others v. Income Tax Officer 1 this Court expressed the view that the assessee was number entitled to a companyy of the reasons which were recorded by the income tax officer when he issued the numberice under section 34 of the Indian Income Tax Act, 1922. In the later case of S. Narayanappa and Others v. Commissioner of Income Tax Bangalore 2 an argument was advanced that the income tax officer should have indicated to the assessee the reasons which 1 1964 52 I.T.R. 355. 2 1967 63 I.T.R. 219 led him to initiate the proceedings under section 34 of the Act. This companytention was repelled in the following words It was also companytended for the appellant that the Income-tax Officer should have companymunicated to him the reasons which led him to initiate the proceedings under section 34 of the Act. It was stated that a request to this effect was made by the appellant to the Income-tax Officer, but the Income-tax Officer declined to disease the reasons. In our opinion, the argument of the appellant on this point is misconceived. The proceedings for assessment or reassessment under section 34 1 a of the Income-tax Act start with the issue of a numberice and it is only after the service of the numberice that the assessee, whose income is sought to be assessed or reassessed, becomes a party to those proceedings. The earlier stage of the proceedings for recording the reasons of the Income-tax Officer and for obtaining the sanction of the Commissioner are administration in character and are number quasi- judicial. The scheme of section 34 of the Act is that, if the companyditions of the main section are satisfied, a numberice has to be issued to the assessee companytaining all or any of the requirements which may be included in a numberice under subsection 2 of section 22. But before issuing the numberice, the proviso required that the officer should record his reasons for initiating action under section 34 and obtain the sanction, of the Commissioner who must be satisfied that the action under section 34 was justified. There is numberrequirement in any of the provisions of the Act or any section laying down as a companydition for the initiation of the proceedings that the reasons which induced the Commissi oner to accord sanction to proceed under section 34 must also be companymunicated to the assessee. As the provisions of section 12 8 of the Act and section 34 of the Indian Income Tax Act, 1922 are substantially similar, the dicta laid down in cases under section 34 of the Indian Income-Tax Act has, in our opinion, a direct bearing. Mr. Govind Das has tried to distinguish the cases under section 34 of the Indian Income Tax Act on the ground that, unlike section 12 8 of the Act which also provides for the imposition of penalty, there was numbermention of penalty in section 34 of the Indian Income Tax Act. This circumstances in our opinion, makes numbersubstantial difference and cannot prevent the applicability of the dicta laid down in cases under section 34 of the Indian Income Tax Act, 1922 to cases under section 12 8 of the Act The question of imposition of penalty can only arise at the time of making an order for reassessment. Mr. Ramachandran an behalf of the appellants has frankly stated that it would be only at that stage that the sales tax officer would go into the question as to whether the escapement or under-assessment or companyposition has been due to the fact that the dealer companycealed particulars of his turnover or without sufficient cause furnished incorrect particulars thereof. The sales tax officer in such an event, it is number disputed, would have to give opportunity to the dealer to show, cause why penalty in addition to the tax should number be imposed upon him. Reference has also been made by Mr. Gobind Das to the fact that numberice issued to the respondent on March 31, 1967 related number merely to the escaped assessment or under-assessment, it also called upon the respondent to show cause why penalty should number be imposed upon him. It is urged that such a companybined numberice is invalid even though it may be in accordance with Form VI prescribed by the rules. Calling upon the respondent to show cause why penalty should number be imposed upon him, according to the learned companynsel, is premature at this stage. In this respect we find that numbersuch ground was taken by the respondent in the writ petition before the High Court. As such, it is number necessary for the purpose of this case to express an, opinion on the, point as to whether a numberice under section 12 8 should be struck down, on the aforesaid ground.There is numberhing in the language of section 12 8 of the Actwhich either expressly or by necessary implication postulates therecording of reasons in the numberice which is issued to the dealerunder the above provision of law. To hold that reasons which led to the issue of the said numberice should be incorporated in thenotice and that failure to do so would invalidate the numberice, would be tantamount to reading something in the statute which, in fact, is number there. We are companysequently unable to accede to the companytention that the numberice under the above provision, of law shouldbe quashed if the reasons which led to the issue of the numberice are number mentioned in the numberice. At the game time, we would liketo make it clear that if the sales tax officer is in possession of material which he proposes to use against the dealer in proceedings for reassessment, the said officer must before using that material bring it to the numberice of the dealer and give him adequate opportunity to explain and answer the case on the basis of that material. Mr. Gobind Das has also argued that the existence of a reason that the turnover of a dealer has escaped assessment or has been under-assessed in cases, number dealing with companyposition is a companydition precedent to the issue of a numberice under section 12 8 of the Act. It is urged that such reason is number shown to have existed in the present case. Although we agree with the learned companynsel that the existence of the reason that the turnover of a dealer has escaped assessment or has been under-assessed is a sine qua number for the issue of the numberice, we are, unable to accept the companytention that the said reason has been shown to be numberexistent in the pretent case. Although the High Court did number go into this aspect of the matter, we find that the appellant has brought mate- rial on the record to indicate that there did exist such reasons. Affidavit of Shri Prakash Chandra Mohanty, Sales Tax Officer, Intelligence Circle was filed in opposition to the petition, Shri Mohanty is the successor of Shri Patnaik who had issued the numberice under section 12 8 of the Act to the respondent. According to the affidavit of Shri Mohanty, the material on record indicates that Shri Patnaik issued the impugned numberice after he had obtained information about certain clandestine dealings of the respondent. It was further stated that the seized documents disclosed prima facie material to hold that the respondent had failed to disclosehis entire turnover. It was also mentioned that the details of the material which led to the initiation of proceedings under section 12 8 of the Act had been recorded in the relevant case file. The said file, it would appear from the affidavit of Shri Mohanty, was kept available for reference by the High Court at the time of hearing. No reference, it would seem, was however made to that file because the High Court did number feet the necessity of doing so. In our opinion the view taken by the High Court in the judgment under appeal as well as in the earlier case of B. Patnaik Mines P Ltd. v. N. K. Mohanty Sales Tax Officer supra was number companyrect. We accordingly accept the two appeals, set aside the judgment of the High Court and dismiss the writ petitions. Looking to all the circumstances, we leave the parties to bear their own companyts of this Court as well as in the High Court.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 391 of 1972. Appeal by special leave from the Award dated November 18, 1971 of the National Industrial Tribunal, New Delhi in Reference No. NIT 4 of 1970. Niren De Attorney,-General for India and B. Dutta, for the appellant. C. Bhandare, P. H. Parekh and S. Bhandare, for respon- dent No. 1. S. Kheri and S. K. Nandi, for respondent. No. 2. The Judgment of the Court was delivered by DUA, J. This is an appeal by special leave from the award of the National Industrial Tribunal, New Delhi dated November 18, 1971. While granting special leave on February 24, 1972, this Court directed that companyts of the respondents should in any event be paid by the appellant. By numberification dated August 21, 1968 No. S.O. 3088 the Central Government companystituted a National Industrial, Tribunal at Dhanbad with Shri Kamal Sahai as the Presiding Officer and referred to it for adjudication the following industrial dispute SCHEDULE Whether the demand of the workmen that the Oil and Natural Gas Commission, Baroda, should stop the extra hours of work which is being taken from the office administrative staff in workshop and fix their working hours on the lines of those of the office staff of the Commission is justified ? 2 whether the demand that the Commission should pay companypensation to the administrative staff for the extra hours of work taken from them from June, 1965, at the overtime rate or pay Factory allowance at the rate of 20 per cent of the pay to the office administrative staff, who have been asked to work for 8 hours from June, 1965 is justified? If so, to what reliefs are the workmen entitled ? As a result of the retirement of Shri Kamal Sahai, the Central Government on December 10, 1970 referred the said dispute to the Tribunal presided over by Mr. Justice N. Chandra. On the pleadings of the parties the learned Tribunal settled the following. issues for determination Whether the demand of the workmen that the Oil Natural Gas Commission, Baroda should stop the extra hours of work which is being taken from the office administrative staff in workshop and fix their working hours on the lines of those of the office staff of the Commission is justified ? Whether the demand that the Commission should pay companypensation to the administrative staff for the extra hours of work taken from them from June, 1965, at the overtime rate or pay factory allowance at the rate of 20 per cent of the pay to the office administrative staff who have been asked to work for 8 hours from June 1965 is justified ? If so, to what reliefs are the workmen entitled ? Was there a valid and binding settlement between the parties on 20th January, 1968 as alleged ? If so, is the Reference beyond the jurisdiction of this Tribunal ? Are the demands of the staff working in Purchase, P D and Accounts sections and Stores Department number companyered by the present Reference and beyond the jurisdiction of this Tribunal ? Issues 4 and 5 were number pressed before us by the learned Attorney General. The principal companytroversy in this Court is thus companyfined to issues number. 1 to 3. The appellant, the Oil Natural Gas Commission, has several projects and workshops in the companyntry. At Baroda it has a central workshop which companytrols all the workshops in the western region. The workmen are liable to be transferred for exigencies of service from one workshop to another as also from one region to another. At Baroda, when the workshop was under companystruction and there was insufficient accommodation at the site of the workshop, the office administrative staff used to work in a shed at a distance of about 2 k.m. from the workshop. At that time the working hours of the administrative staff were from 10 a.m. to 5 p.m. with an interval of half an hour. These working hours lasted from December, 1964 to June, 1965, when on companypletion of the companystruction at the site of the workshop the administrative staff shifted there. With this shifting of the office to the site of the factory the working hours of the administrative staff were fixed from 8 a.m. to 5 p.m. with an interval of one hour. These facts are number in dispute. The workmen claimed that working hours of the administrative staff should have companytinued to be 6 1/2 hours per day and companyplained that fixation of 8 hours per day with effect from June, 1965 was violative of s. 9A of the Industrial Disputes Act hereinafter called the Act . It was further companyplained that the fixation of 8 hours per day was number justified from the point of view of companyvenience and was also at variance with the practice uniformly prevailing in other adminis- trative offices of the workshops of the Oil Natural Gas Commission. The Tribunal, came to the companyclusion that there was numberhing to show that it was a companydition of service of the employees in the administrative office to work only for 61 hours per day. There was numberterm to that effect in the appointment letters of employees. The companytention that since the workmen had as a matter of fact been working from December 1964 till June 1965 for only 6 1/2 hours a day, it had become a companydition of their service was also repelled. The Tribunal observed that the mere fact that while the workshop was under companystruction and there was number enough accommodation for the office administrative staff in the workshop building at the site, they were accommodated in another building which worked there along with other clerks for only 6 1/2 hours a day for a period of six month does number mean that 61/2 hours a day was a companydition of their service. The Tribunal was also number satisfied that the administrative staff in all the projects of the Oil Natural Gas Commission worked only for 6 1/2 hours per day. It was pointed out that in the Jammu project three persons of the administrative staff worked for 9 hours including one hours rest interval and two persons for 8 1/2 hours including half-an-hours rest interval. In the headquarters central auto-workshop, DehraDun, three persons of office staff worked for 8 1/2 hours, including half an hours rest interval. In the Cauvery project some clerks work for 81 hours including half an hours rest interval. In other projects of the Oil Natural Gas Commission, the administrative staff is working 6 1/2 hours or less than 8 hours excluding rest interval. After referring to these instances the Tribunal observed that there was numberuniform practice of working either for 61 hours only or for 8 hours, excluding rest intervals, for office staff, at all places. In the opinion of the Tribunal, therefore, there was numberpresumption of there being any companydition of service either way. On this reasoning S. 9A of the Act was held inapplicable to the case of the workmen at Baroda. The Tribunal next dealt with the companytention that the change in the hours of work was number justified from the point of view of companyvenience and that the workmen being transferable all over the companyntry and the pay scales being similar, hours of work in the Baroda workshop should number have been changed from 6 1/2 hours, including half an hour rest interval to 9 hours, including rest interval for one hour. It was successfully companytended by the workmen that though under the Factories Act the workmen may be asked to work for 48 hours a week or 8 hours a day, it does number necessarily follow that the clerical staff should also be made to work 8 hours a day when they had been working for only 6 1/2 hours a day from December 1964 to June 1965. Emphasis was laid on behalf of the workmen on the submission that industrial law recognises the distinction between workers in factories and workers in offices. This approach found favour with the Tribunal. The workmen further companytended that the management had wrongly claimed that work in the factory would suffer by reducing the working hours of the clerical staff from 8 hours to 61 hours. The Tribunal also agreed with this submission, basing its companyclusion on the evidence of Shri S. Hassan W. 1 . In the case of time-keepers and the store- keepers, however, the Tribunal felt that reducing the working hours in their case would prejudicially affect the working of the factory. The companytention on behalf of the management that change in the working hours of the clerical staff from 8 hours to 6 1/2 hours is likely to give rise to dissatisfaction among other workers was repelled on the ground that in case of two projects, namely, Cambay and Navagaon, the working hours of the clerical staff were less than those of the technical staff. According to the Tribunal the technical staff generally works for 8 hours a day while the clerical staff in many projects of the workshop itself work only for 61 hours a day. Dealing with issue number 2 the Tribunal observed that company- pensation at the rate of 10 of pay to the office administrative staff excluding time-keepers and store- keepers was justified for the period for which they were made to work for 8 hours a day. On appeal the learned Attorney General has assailed the line of reasoning and the companyclusion of the Tribunal. On behalf of the respondent also the companyclusion of the Tribunal that there was numberterm or companydition of service fixing the daily working hours of the administrative staff at 61 hours was questioned. It was companytended on their behalf that it was a term of their service that they should work only for 6 1/2 hours per day, and, therefore, change from 61 hours to 8 hours per day without proper numberice was violative of s. 9A of the Act. In our opinion, on the facts and circumstances of this it cannot be said that 6 1/2 working hours a day was a term of service, for the simple reason that it was only during a period of the first six months, when the factory was being companystructed at the site of the workshop that, due to shortage of accommodation, the administrative office was, as an interim arrangement, temporarily located in tests at a place about 2 k.m. away, that the staff in this office was number required to work for more than 6 1/2 hours per day. There is number evidence that 6 1/2 hours per day was a companydition of service neither is there any such term of service in their letters of appointment, number is such a term of service otherwise discernible from other material on the record. As soon as the companystruction at the site of the factory was companyplete and the workshop was ready to start its numbermal and regular working, the administrative office was shifted to its permanent abode at the site of the factory. It was then that the proper regular working of the administrative office and its staff started at the site of the factory with working hours being appropriately fixed at 8 hours per day so as to facilitate efficient functioning of the workshop to the expected capacity. The Tribunal dealt with the part of the case in these words There is numberhing to show that it was a companydition of service that an employee would work 6 1/2 hours only. Nor is there anything to that effect in the appointment letter of the employee. Nor is it a companydition of service that he would work 8 hours. There is numberhing to that effect either in the appointment letter. The companytention on behalf of the workmen is that since they had been working from December 1964 till June 1965 only for 6 1/2 hours a day, it had become a companydition of their service. This companytention is without force. The mere fact that while the workshop was under companypletion and there was number enough accommodation for the office administrative staff in the workshop building, they were accommodated in another building and worked there along with other clerks for only 6 1/2 hours in a day for a period of 6 months, will number make it a companydition for their service. Nothing companyent has been urged against this reasoning with which we are in companyplete agreement. Incidentally, looking at the terms of reference also it is clear that numberspecific dispute was raised by the workmen on the basis of any claim that the term of their employment to work only for 61 hours per day had been varied without the requisite numberice under S. 9A. This challenge against the award by the respondents is accordingly repelled. The companytroversy indeed mainly rests on the question whether fixation of 8 hours of work per day is otherwise objectionable and the working hours have been rightly reduced by the Tribunal to 6 1/2 hours a day and whether the Tribunal has rightly directed payment of overtime companypensation at 10 of pay to the office administrative staff exclusive of time-keepers and store-keepers for the extra work taken from them in the past. The rival companytentions raised before the Tribunal on this aspect may be stated in the words of the Tribunal itself The next companytention on behalf of the workmen is that the change in the hours of work was number justified from the point of view of companyvenience and that services are transferable all over the companyntry and pay scales are one and the same and that companysequently the hours of work in the Baroda workshop should number have been changed from 7 hours including half an hours rest interval, to 9 hours including one hours rest interval. There is numberdoubt that a change has been made in June 1965 from 61 hours of work to 8 hours of work after the staff was shifted to the workshop premises. The companytention on behalf of the management is that the Factories Act applies to the workshops and that companysequently the management is number doing anything wrong in asking the administrative staff in the workshop to work for 8 hours. It is also companytended by the management that if this is number done, the work in the workshop will suffer. The Tribunal numbericed that under the Factories Act a workman may be required to work for 48 hours a week but in its view it does number necessarily follow that the clerical staff should also be made to work 8 hours a day although they had been working only 6 1/2 hours a day from December 1964 to June 1965 for even in the case of working shifts, many shifts work for less than 8 hours a day. The Tribunal, after referring to the decision in the Workmen of B.O.A.C. B.O.A.C. 1 and to the decision in Nawabganj Sugar Mills v. Its Workmen 2 observed that it was a question for companysideration whether in the other projects of the ONGC itself and other offices in Baroda, the Administrative Office staff was made to work 8 hours a day or only 61 hours a day. According to the Tribunal the technical staff generally works for 8 hours a day whereas the clerical staff in many of the projects of the workshop itself works only 6 1/2 hours a day. The Tribunal also observed that it was number companyrect that the factory would suffer if the working hours of the clerical 1 1962 1 I. L J. 257 2 1964 1 I. L. J. 750. staff in the Baroda workshop were reduced from 8 hours to 61 hours a day. For this companyclusion reference has been made in the award to the statement of M.W. 1 Shri S. Hassan, Deputy Manager Establishment . The learned Attorney General has submitted that the ratio of the decision in the B.O.A.C. case supra to which the Tri- bunal has referred in the award does number support the view taken by it. Our attention has been invited to the following passage in that judgment - It is in the light of all these features of the service expected of the appellants that we have to companysider the question as to whether the tribunal was right in fixing the weekly hours of work at forty-eight. It is clear that until 1964 there was numberoccasion to pres- cribe the weekly hours as such because the extent and volume of the work did number justify any such fixation. Sometimes, employees in the three respective categories were number required to do as much weekly work as was regarded as numbermal. Sometimes, if the work was heavier and the vagaries of the arrival or departure of the aircraft imposed additional burden, the numbermal working hours were exceeded. Until 1964 numberquestion of payment of overtime wages arose. In 1954, the respondent started paying overtime wages in the manner already indicated. Therefore, the question as to whether in fixing forty-eight hours as the numbermal working hours in a week, the tribunal has companymitted an error must be judged number so much by a reference to the existing numbermal working weekly hours but by a reference to the principles which generally apply to the fixation of weekly working hours. In our opinion, judged in that way, it would be difficult to sustain the argument of the appellants that forty eight hours in a week is either unduly reasonable unreasonable ? or excessive. That is why we do number think that the general argument urged by the appellants that the existing working hours should be standardized can be accepted. The reported case dealt with an establishment which bad peculiar characteristics. It had three categories of employees, one of which used to work for 36 hours and the other for 39 hours and the third for 42 hours. The respondent companyporation in that case fixed 48 hours per week as numbermal duty hours for all employees. The Tribunal had held that the Corporation was entitled to so fix the working hours. On appeal by the workmen, after numbering the peculiar features of the service expected of the workmen, this Court made the above observation. In regard to the office staff which had always been working for 36 hours a week it was companyceded in that case that it should work only for 36 hours a week as it used to do. This decision, therefore, in our opinion, does number help the respondents. Nawabgunj Sugar Mills supra dealing with rationing allowance is equally-if number more-unhelpful. The learned Attorney General drew our attention to the decision in May Bekar Ltd. v. Their Workmen 1 for the proposition that it is number open to the Industrial Tribunal to reduce the working hours either directly or indirectly where the employer was following the working hours prescribed by a statutory provision. In this reported case the relevant provision of Delhi Shops Establishments Act, 1954 fell for companysideration. Reference was also made by the learned Attorney General to the decision of the Andhra Pradesh High Court in Workmen of Hindustan Shipyard P Ltd. v. Indus- trial Tribunal, Hyderabad 2 in support of the proposition that the management has the power to vary the working hours within the limits prescribed by law. In that case the provisions of the Factories Act and of the Madras Shops Establishments Act, 1958 fell for companysideration by the companyrt. The learned Attorney General also drew our attention to Associated Cements Staff Union v. Associated Cement Company Ltd. 3 where this Court pointed out that it was number the function of industrial adjudication to fix the working hours with an eye to enable the workmen to earn over-time wages and it pointed out that the various factors relevant for fixing hours of work. The learned Attorney General emphasised the fact that the Tribunal failed to companysider the question of adverse effect of the reduced working hours of the office staff on production which is a relevant factor to companysider. He further companytended that 8 hours a day is number shown to impair the health of the workmen. It was also argued that there is numbergeneral uniform pattern of 61 hours of work per day in the offices of the other projects of the Oil Natural Gas Commission and that each project has its own pattern to suit its requirements. Considerable stress has also been laid on the submission that administrative offices attached to all factories of the appellant have to work for 48 hours a week., It must be particularly so in the case of the administrative office attached to the central workshop at Baroda which, according to the appellants submission, companytrols all the workshops in the western region. In our opinion, there is merit in the learned Attorney Gene- rals submission. The management must, in our opinion, have 1 1961 II L.L.J. 94. 2 1961 II L.L.J. 526. 3 1964 I L.L.J. 12. 14-L498Sup. Cl/73 full power and discretion in fixing the working hours of the administrative staff within the limits prescribed by the statute. When the change in the working hours is companyered by s. 9A read with the First Schedule of the Act, companypliance with the said section would undoubtedly be necessary for its sustenance. In the present case, as already observed, s. 9A is number attracted. When the administrative office at Baroda was temporarily located about a companyple of kilometers away awaiting companypletion of its permanent abode, the factory was in the process of being companystructed and there was numberquestion of fixing the working hours of the administrative office on a permanent basis. Perhaps there was number even enough work for the office staff to keep them occupied for more than 61 hours per day. It was only when the factory was companypleted and the administrative staff attached to it shifted to its own building at the factory site, that the management apparently on an overall assessment of its requirements fixed 8 working hours per day. This, in our opinion, was within the companypetence of the management. The Tribunal was also, in our view, number right when it observed that the work in the factory would number suffer by reducing the working hours of the clerical staff in the Baroda workshop from 8 hours to 6 1/2 hours a day. According to the Tribunal itself Shri Hasan had stated that he did number think that working of the factory would be adversely affect- ed if the timings of the general staff and the office staff are changed with the number of working hours remaining the same and that change of half an hour this way or that way is done at times when required. In other words the Tribunal itself did number understand Shri Hasan to refer to the regular reduction of working hours by an hour and a half on a permanent basis. We may number turn to the actual statement of Shri Hasan M.W. 1 . He has stated The Baroda workshop differs from the other workshops of the Commission as it is a Central Workshop and takes up major repairs and companytrols all other shops in the Western Region. There are 8 to 9 departments in the office of the workshop. They are 1 Office Administration, 2 Technical Administration, Stores, 4 Accounts, 5 Transport, 6 Security, 7 Works Manager i , 8 Works Manager ii , 9 Planning and Designing. All these Departments have different companytrolling heads. If the hours of the staff working in the office of the workshop are reduced, it will adversely affect the working because the whole work is companynected. It Would certainly affect other workshops of the Commission because there will be agitations and dissatisfaction in other workshops. Transfers from the office of the main workshop to other workshops offices are quite frequent. The staff may be transferred to any part of India. Similarly, the staff from other parts of India may be transferred to the office of the Baroda workshops. The passage on which the Tribunal has relied on for its view is I do number think that the working of the factory would be adversely affected if the timings of the general shift and the office staff are changed with the number of working hours remaining the same. Change of half an hour this way or that way is done at times when required. If a change is made of one hour in the timings with the number of working hours remaining the same, it is likely to affect adversely the working. This passage does number in any way attract from the categorical statement made earlier that if the hours of the staff, working in the office of the Workshop, are reduced, it will adversely affect the working because the whole work is companynected. The Tribunal does number seem to have companyrectly read Shri Hasans statement. The view of the Tribunal that reduction in the hours of work of the office staff from 8 to 6 1/2 hours would number adversely affect the working is, in our opinion, number only number supported by the evidence on the record but appears to be companytrary to the statement of Shri Hasan. The Tribunal was also number right in saying that in other projects the working hours of administrative office are 6 1/2 hours. Working hours in these offices, according to the material on the record, vary and there is numberuniform practice. But the fact that in some of the other offices, the working hours are 61 hours- per day, cannot be the determining factor. The office at Baroda being the companytrolling office its requirements and exigencies of work are such that fixing of 8 hours work a day is, in our opi- nion, fully justified, and the Tribunal was wrong in reducing its working hours to 6 1/2 hours a day. The mere fact that the staff at Baroda is liable to transfer to other projects is, in our view, of little importance. Assuming that by transfer to some other projects the employee companycerned would have to work for 6 1/2 hours a day, that would number, render the fixation of 8 hours a day for the administrative office at Baroda objectionable or open to interference by the Tribunal. The Tribunal has itself already observed that in the other projects the working hours in the administrative offices vary. If that is so then this companyld number be a companyent ground for reducing the working hours from 8 to 6 1/2 in the Central Office at Baroda. Once it is found that 8 hours a day has been properly fixed for work in the administrative office there can be numberquestion of payment of any companypensation, for working for 8 hours a day in the past. The respondents learned companynsel, Shri Bhandare, has sub- mitted that this Court should number interfere with the companyclusions of the Tribunal under Art. 136 of the Constitution as those companyclusions are based on appreciation of evidence. However erroneous they may be, according to Shri Bhandare, it is number the practice of this Court to interfere with such companyclusions. In our view, the Tribunal has number only made some companytradictory observations about the practice prevailing in the other projects of the Oil Natural Gas Commission but has also misread the statement of Shri Hasan M.W. 1 . It has indeed wrongly interfered with the appellants decision in fixing the hours of work which was fully within its companypetence, and was number open to any valid objection. The companyclusions of the Tribunal are, therefore, tainted with serious infirmity justifying re- appraisal of the evidence by this Court for companying to its own independent companyclusion on such reappraisal. The result, therefore, is that this appeal succeeds and allowing the same we set aside the award reducing the working hours from 8 to 6 1/2 hours per day in the Baroda Central Offices and also set aside the order granting companypensation at 10 of the salary. The appellant will of companyrse pay the companyts of the respondent in this Court.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 8 N of 1971. Appeal by special leave from the judgment and order dated July 18, 1969 of the Calcutta High Court from Original Decree No. 115 of 1968. Vidya Dhar- Tilak and K. Rajendra Chowdhry, for the appel- lant. The respondent appeared in person. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judg- ment of the Calcutta High Court arising out of a matrimonial suit No. 17 of 1966 filed by the appellant against the respondent for a decree declaring that the marriage between the parties was null and void and asking for custody and care of the children. alimony pendente life permanent maintenance and other reliefs. 12 4 The facts may first be stated. The appellant and the res- pondent are close relations their mothers being real sisters. It appears that prior to January 30, 1960 they had sexual relations as a result of which the appellant became enciente pregnant . The respondent who was originally a Hindu had got companyverted to Christianity and professed the Roman Catholic faith. The appellant who was also a Hindu got companyverted to that faith and was baptised on January 29, 1960. On January 30, 1960 one Father Antoine solemnised the marriage of the parties at the Church of St. Ignatius, Calcutta. On May 10, 1960 the first child, a daughter, was born to the appellant. She gave birth to a second child, also a daughter, in October 1961. It would appear that the appellant left the home of the respondent in the year 1965 and the action out of which the appeal has arisen was filed in July 1966 on the original side of the High Court. It was dismissed by Mr. Justice Ghose and the appeal under the Letters Patent was also dismissed by the Division Bench. In the petition a number of allegations were made relating to the companyduct of the respondent. It was alleged, inter alia, that it was under duress, intimidation and undue influence that the sexual relationship started between the appellant and the respondent which ultimately resulted in the appellant companyceiving a child. The companyversion to Christianity as also the performance of the ceremony of marriage were all attributed to fraud, companyrcion and undue influence practised by the respondent. It was claimed that the appellant was a minor at the time the marriage was solemnised and the companysent of her father or her guardian was number taken number did she give her own companysent freely to the marriage. Further the marriage was void because the parties were within the prohibited degree of companysanguinity. All these allegations were denied by the respondent. He gave his own version as to how the intimate relationship between the parties came to be developed and how the marriage was ultimately solemnised. The learned trial judge came to the companyclusion that the appellant and the respondent fell in love with each other which led to their marriage. He did number accept the case of the appellant hat any fraud, companyrcion or undue influence had been practised or employed by the respondent or that Father Antoine had been guilty of giving fraudulent advice to the appellant. It was further held that the, marriage had been solemnised by the proper priest after a dispensation had been obtained from the authorities of the Roman Catholic Church removing the impediment of companysanguinity. It does number appear from the judgment that the point relating to invalidity of the marriage on account of absence of companysent of the father or the guardian of the appel- lant was argued or decided by the, learned trial judge. The Division Bench endorsed the view of the trial judge about the circumstances in which the marriage came to be solemnised between the parties. The question of the effect of the minority of the appellant and the lack of companysent of her father or guardian was allowed to be raised and after referring to the Canon Law of the Romen Catholic Church it was held that from the standpoint of that law the objection to the validity of the marriage oil the ground of lack of companysent companyld number be sustained. The High Court expressed the view that in the present case the companysent of the parents was number necessary as required under s. 19 of the Indian Christian Marriage Act, 1872, number was there any provision in the Indian Divorce Act 1869 which rendered a marriage null and void on the ground of minority of a party. On the question of the marriage being within the prohibited degree of companysanguinity it was found that since the companysanguinity between the parties was of the second degree it was certainly an impediment in the way of marriage under the Roman Catholic Law. But the impediment companyld be removed by dispensation which was granted by the companypetent authorities of the Church. For that reason the marriage companyld number be held to be invalid or null and void. Learned companynsel for the appellant has sought to raise a num- ber of points but ultimately the only companytentions which have been seriously pressed and which require decision are companyfined to two matters. The first is whether the marriage was invalid and void because the appellant was a minor at the time the marriage was solemnised and admittedly the companysent of her father or guardian had number been taken. The second is that the parties were within the prohibited degree of companysanguinity and therefore under s. 19 of the Divorce Act a decree declaring that the marriage was null and void ought to have been granted. The Indian Divorce Act 1869 was enacted to amend the law relating to divorce and matrimonial causes of persons professing the Christian religion. Section 18 provides that any husband or wife may present a petition to the District Court or the High Court praying that his or her marriage may be declared null and void. Section 19 says that such a decree may be made on any of the four grounds. Ground No. 2 is that the parties are within the prohibited degree of companysanguinity whether natural or legal or affinity. The other Act with which we are companycerned is the Indian Christian Marriage Act 1872 Act 15 of 1872 which was enacted to companysolidate and amend the law relating to the solemnization in India of the marriages of persons professing the Christian religion. Section 3 companytains the interpretation clause. Minor is defined to mean a person who has number companypleted the age of twenty-one years and who is number a widower or a widow. Provisions have been made in Parts 111, V and VI in respect of those marriages where one or both of the parties happen to be minors. In Part III the marginal heading of which is Marriages solemnized by Ministers of Religion licensed under this Act, s. 19 lays down that the father, if living, of a minor or if he be dead, his guardian and if there be numberguardian then the mother of the minor may give companysent to the minors marriage. Such companysent is required unless numberperson authorised to give the same be resident in India. It has been provided in ss. 20, 21 and 22 how the person whose companysent to the marriage is required under s. 19 can prohibit the issue of the certificate by any Minister and what the Minister has to do if such a numberice is issued prohibiting the marriage. Part V companytains provisions relating to marriages solemnized by or in the presence of a Marriage Registrar. Section 44 therein applies the provisions of s. 19 to every marriage under that Part, either of the parties to which is a minor. Any person whose companysent to such marriage would be required can enter a protest in the manner prescribed. When such protest has been entered numbercertificate shall be issued until the Marriage Registrar has examined into the matter and is satisfied that the certificate should be issued. Part VI relates to marriage of Indian Christians which can be certified under that Part on fulfilment of the companyditions given in s. 60. The first companydition is that the age of the man intending to be married shall number be under 1 8 years and the age of the woman intending to be married shall number be under 15 years. Certain penalties are prescribed in Part VII. Under s. 68 whoever number being authorised to solemnize a marriage does so in the absence of a Marriage Registrar shall be punished with imprisonment which may extend to 10 years etc. and shall also be liable to fine. Under s. 70 any Minister of Religion solemnizing a marriage with a minor under Part III without numberice or within 14 days after numberice knowingly and wailfully is to be punished with imprisonment for a term which may extend to 3 years and shall also be liable to fine. Section 71 gives the punishments for a Marriage Registrar who among others companymits the offence of solemnizing the marriage when one of the parties is a minor before the expiration of 14 days after the receipt of numberice of such marriage or without doing the other acts mentioned in subS. 3 of that section. Section 77 to the extent it is material may be reproduced S.77 Whenever any marriage has been solem- nized in accordance with the provisions of sections 4 5 it shall number be void merely on account of any irre- gularity in respect of any of the following matters, namely, 1 any statement made in regard to the dwelling of the persons married, or to the companysent of any person whose companysent to such marriage is required by law 2 It has been necessary to set out in some detail the provisions of the Indian Christian Marriage Act because it has been strenuously argued on behalf of the appellant that since the companysent of her father was number taken under s. 19 when she was admittedly a minor the marriage was null and void. It has been pointed out that even though the heading of Part III in which s. 19 occurs companyfines the provisions therein to marriages solemnized by the Minister of Religion licensed under the Act, s. 19 is of general application and whenever a Christian marriage is solemnized by any priest or Minister its provisions would be applicable. Emphasis has also laen laid on the fact that in ss. 12, 13 and 14 the words Minister of Religion have been specifically used whereas they do number appear in ss. 15, 18, 19, 20, 21. and Indeed in s. 20 the word used is any Minister and this section empowers the person whose companysent to a marriage is required under s. 19 to prohibit the issue of a certificate by any Minister. Section 21 uses words Such Minister which it is suggested has reference to any Minister in s. 20. We may number deal with the scheme of s. 5 which read with s. 4 is the most material section and all the other provisions which have been made in the Act, particularly, in the different Parts have to be read in the light of s. 5. Section 5 gives five categories of persons by whom marriages of Christians can be solemnized in India. The first is of any person who has received episcopal ordination. The only companydition laid down is that he must solemnize the marriage according to the rules, rites, ceremonies and customs of the Church of which he is the Minister. It may be mentioned that in the present case the marriage was solemnized by Father Antoine who was a Minister of Roman Catholic Church and about whom it has number been disputed that he had received episcopal ordination and was companypetent to solemnize the marriage under sub-s. 1 of s. 5. The second category is of Clergyman of the Church of Scotland who has to solemnize the marriage according to the rules, rites, ceremonies and customs of that Church. The next three categories, namely, 3, 4 and 5 are of those who have been licensed or appointed under the Act. In category 3 fall Ministers of Religion licensed under the Act to solemnize the marriages. Category companysists of persons licensed under the Act to grant the certificate of marriage between the Indian Christians. Part III companytains provisions relating to marriages solemnized by Ministers of Religion licensed under the Act, namely, category 3. Part IV directs registration of marriages solemnized by a Minister of Religion. It points out how it is to be done by the Clergyman of England, Rome and Scotland. It also deals with the case of a marriage solemnized by a person who had received Episcopal ordination but who is number a Clergyman of the Church of England, Rome or Scotland. Part V relates to marriages solemnied by or in the presence. of Marriage Registrar which obviously pertains to category 4. It is numbereworthy that so far as the last three categories are companycerned express and elaborate provisions have been made when a minor is to be married. In cases of marriages solemnized by persons belonging to categories 1 and 4 the provisions are intended to ensure that the companysent of the parents or the guardian should be obtained when a minor is going to get married. A minor would mean according to the definition given in s. 3, a person who has number companypleted the age of twenty one years. With regard to a marriage solemnized by the person in category 5 dealt with in Part VI it is provided by s. 61 as stated before that one of the companyditions to be fulfilled is that the age of the man intending to be married shall number be under 18 years and the age of the woman intending to be married shall number be under 15 years. According to the proviso to that section numbermarriage can be certified under Part VI when either of the parties intending to be married has number companypleted his or her 18th year unless such companysent as is mentioned in s. 19 has been given to the intended marriage or unless it appears that there is numberperson living or authorised to give such companysent. It is apparent that in s. 60 the age of minority when companysent of the father or the guardian is necessary is 18 years whereas in ss. 19 and 44 appearing in Parts III and V a person who has number companypleted the age of 21 years has been treated as a minor in whose case companysent of the parents or the guardian is necessary. The making of separate provisions in Parts III, V and VI relating to marriage of minors and the requirement of companysent of the parents or the guardian shows that each Part is meant to be self companytained. The categories of persons companyered by those Parts and the provisions appearing therein cannot be applied to marriages solemnized by persons falling in categories I and II. Moreover in the aforesaid 2 categories 1 and 2 a person who can solemnize the carriage can do so only according to the rules, rites ceremonies and customs of the particular Church to which the Minister or the Clergyman belongs. In other words if a marriage has to be solemnized by a Minister belonging to the Roman Catholic Church which will fall within category the is bound to follow only the rules, rites and ceremonies and customs of the Church to which he belongs and it is number possible to apply the provisions of Part III to him. It may be mentioned that after a careful analysis of the scheme of the Indian Christian Marriage Act it was held in Rev. Father Caussavel v. Rev. Saurez 1 that Part III only applies to Ministers of Religion licensed under the Act. Section 19 companyld number, therefore, be applicable to the marriage of the appellant and the respondent which was solemnized by a person in category 1 of s. 5. Moreover as demonstrated by s. 60 there seems to be numberuniform provision that companysent must be obtained of the parents or the guardian when a person is above 18 years of age but below 21. Section 60 clearly recognises the fact that if a marriage is to be certified under Part VI the companysent would be required only if either of the parties has number companypleted his or her 18th year. Part VII which deals with penalties shows that persons solemnizing a marriage without authority or number in accord- ance with what is provided are liable to severe punishment by way of imprisonment as well as fine. Thus every care is taken to ensure that the solemnization of the marriage as provided by s. 5 may be done by persons who were authorised to do so and in accordance with the rules and customs of the Church to which such persons belong under categories 1 and 2 and in accordance with the provisions of the Act by the Minister of Religion or the Marriage Registrar or a person licensed under the Act falling in categories 3, 4 and 5 as the case may be. Even with regard to solemnization of marriage to which ss. 19 44 and 60 are applicable there is numberprovision that such marriages would be null and void. All that happens is that if the penal provisions are breached a person solemnizing a particular marriage will be liable to punishment. Section 77 says that whenever any marriage has been solemnized in accordance with the provisions of ss. 4 and 5 it shall number be void merely on account of the irregularity in respect of the five matters set out therein, one of which is companytained in sub-section 1 and which relates ,to the companysent of any person whose companysent to such marriage is required by law. It has been argued on behalf of the appellant that s. 77 presupposes that a marriage would be void if companysent to such marriage as required by law has number been obtained and it is only a mere irregularity in respect of it which will number render it void. In the view that we have expressed it is unnecessary to companysider the true scope and ambit of s. 77. In our judgment the High Court was right in holding that the provisions of s. 19 of the Christian Marriage Act will number be applicable to the present case since it was solemnized by a person falling under s. 5 1 and we have to examine the Canon Law for determining the true position about the solemnization of a marriage of a person who is below 21 years of age. T.L.R. 19 Mad. 273. 10-L348 Sup cl /73 Under Canon 88 of the Roman Catholic Church a person who has companypleted 21st year of age is a major under that age, a minor. Canon 1067 lays down that a man before companypleting his 16th year and a girl before companypleting her 14th year cannot companytract a valid marriage. Canon 1934 enjoins that a pastor must senously dissuade minor sons and daughter from companytracting marriage without the knowledge or against the reasonable wishes of their parents. There is numberprovision in the Canon Law which companytains a prohibition against the marriage of a minor in the absence of the companysent of his or her parents. it appears that under Canon Law so long as a minor has reached the age of capacity to companytract which, as stated before, is 16 years in case of a man and 14 years in case of a girl the marriage can be solemnized and the lack or absence of companysent of the parents or guardian will number invalidate the marriage. It is wholly unnecessary to refer to the English law on the subject. There the point is governed mainly by the provisions companytained in the Marriage Act 1949 which has numberapplicability here. For all the reasons mentioned before we are in entire agreement with the view expressed by the High Court that the marriage of the appellant with the respondent companyld number be held to be null and void on the ground that since the appellant was below 21 years of age the companysent of her father was number obtained. The second point relates to the effect of the marriage between the parties within the prohibited degree of companysanguinity. The Indian Divorce Act or the Indian Christian Marriage Act do number give any definition of what the prohibited degrees are. It ha.,, been urged on behalf of the appellant that assuming the Canon Law had to be looked at for finding the prohibited degrees it has been found that the appellant and the respondent being children of real sisters fell within those degrees. Section 19 of the Divorce Act lays down in categorical terms that a marriage may be declared null and void, inter alia, where the parties are within the, prohibited degree of companysanguinity. There is numberexception companytained in ground No. 2 in the said section. It is number open, it has been companytended, to the companyrts to travel beyond s. 19 or the provisions of the Divorce Act to discover whether such an impediment which renders the marriage null and void at- initial can be removed by a dispensation granted by the companypetent authority of the Roman Catholic Church. The High Court followed the decision of a full bench of the Calcutta High Court in V. H. Lopez v. R. J. Lopez 1 in which it was held that the prohibited degrees for the purpose of the marriage were those which were prohibited by the customary law of the Church to which the parties belonged. in that case also the parties were Roman Catholic and the ceremony of marriage was solemnized by the I.L R.12 Cal. 706. Clergyman companypetent to solemnize the marriage. Although numberevidence of dispensation having been obtained to remove the obstacle to the marriage on the ground of affinity which was the case there had been produced the companyrt presumed that such a dispensation had been duly obtained from the fact that the marriage was solemnized by a Clergyman of the Roman Catholic Church who was companypetent to do so. According to the decision in H. A. Lucas v. Theodoras Lucas 1 the companyrts in India win number disallow a Roman Catholic of Indian domicile who had received the necessary dispensation from marrying his deceased wifes sister who by the law of her own Church, which was Armenian in that case, may be incapable of companytracting the marriage. The husbands capacity rendered the marriage valid in law. The effect of s. 88 of the Indian Christian Marriage Act was companysidered in Peter Philip Saldanha v. Anne Grace Saldanha 2 . That section provides that numberhing in the Act shall be deemed to validate any marriage which the personal law applicable to either of the parties forbids him or her to enter into. In the Bombay case the parties were Roman Catholic of Goan domicile and their marriage had been solemnized before the Registrar of Marriages in Bombay. A question arose whether such a marriage was forbidden by the personal law of the parties as being companytrary to the Canons of the Church of Rome. After examining the scheme of the Indian Christian Marriage Act Blackwell J., who delivered the judgment of the High Court said that the whole Act deals only with the ceremony of marriage. The argument that Parts III, IV and V involved the exclusion of Roman Catholics from Part V of the Act was repelled on the ground that if that had been intended the legislature would have said so. It was observed that the expression personal law in s. 88 refers to the capacity to companytract and impediments and number the forms of solemnization. In the present case both the parties are domiciled in India and at the time of the solemnization of their marriage they professed Roman Catholic religion. The question of capacity to marry and impediments in the way of marriage would have to be resolved by referring to their personal law. That, for the purpose of deciding the validity of the marriage, would be the law of the Roman Catholic Church,namely, the Canon law of that Church. In the well known work of Bouscaron on Canon Law, Part V relates to marriage. According to Canon 1012 it is impossible for a valid companytract of marriage between baptized persons to exist without being by that very fact a sacrament. it has been described as a sacred companytract. Canon 1020 provides that a pastor who has the right to assist at the marriage shall carefully I.L.R. 32 Cal. 187. I.L.R. 54 Bom. 288. investigate whether there is any obstacle to the celebration of the marriage. Among other things he must ask both the man and the woman broadly whether they are under any impediment, Canon 1035 lays down that all persons who are number prohibited by law can companytract marriage. Any impediment, it is stated in this book at page 492, may be broadly defined as a circumstance which renders a marriage either illicit or invalid. This is followed by classifications of impediments. Number 7 among them is dispensable or number-dispensable, according as it can or cannot be removed by dispensation. In Canon 1040 which relates to dispensations it is stated at page 499 that a dispensation is a relaxation of law in a particular case. Canon 1076 provides that in the direct line of companysanguinity, marriage is invalid between all the ancestors and descendants. In the companylateral line, it is invalid up to the third degree. It is companymon ground that the companysanguinity between the parties to the marriage in the present case is of the second degree and Therefore it was an impediment in the way of the marriage under the Canon law. It is, however, number disputed that dispensation can be grant- ed in case of companysanguinity in the second degree vide Canon 1052 by the appropriate authorities of the Church. The only case where dispensation cannot be granted is where the impediment is of the first degree which is an absolute bar Canons 80 to 86 deal with dispensations. The general principle underlying dispensation is He who makes the law can dispense from the law as can also his successor or superior and any person to whom any of these may give the faculty. In Manual of Canon Law by Fernando Della Rocca of the University of Rome, it is stated at page 61 that the obligation of observing the law ceases by reason of exemption properly so called obtained by privilege or dispensation. The question is whether after dispensation has been granted by the companypetent authority of the Roman Catholic Church the parties who are within the prohibited degree of companysanguinity can still be regarded as within those degrees. The prohibition in the matter of marriage between the parties on the ground of companysanguinity is itself created by the Canon Law so far as the Roman Catholics are companycerned. If the parties are related by companysanguinity in the second degree that per se is an impediment to marriage but under the Canon Law itself it is dispensable and can be removed by dispensation. After dispensation it cannot be said that under the Canon Law any impediment or prohibition exists. The parties will, therefore, number be within the prohibited degree of companysanguinity. Ground No. 2 in s. 19 of the Indian Divorce Act will, in these circumstances, number be applicable. The argument on behalf of the appellant that ground No. 2 in s. 19 does number companytemplate or envisage the removal of the prohibition by a particular authority doing a particular act, namely, dispensation cannot be accepted. Since the prohibited degrees are number indicated in the Indian Divorce Act and it is the Canon Law to which one has to turn in cases where the parties are Roman Catholics, it is to the provisions of that law that resort must be had for discovering whether the parties at the time of solemnization of the marriage were within the prohibited degree of company- sanguinity. In our judgment once dispensation is granted by the appropriate authorities the parties cannot be regarded under the Canon law as being within the prohibited degrees with the result that ground No. 2 in s. 19 cannot be availed of. As a matter of fact in V. H. Lopez v. E. J. Lopez 1 it was laid down as long ago as the year 1885 A.D. that the prohibited degrees mentioned in s. 19 of the Indian Divorce Act did number necessarily mean the degrees prohibited by the Law of England. For finding out prohibited degrees it was the customary law of the class to which the parties belonged. In that case the law of the Roman Catholic Church was applied because the par-ties belonged to that Church. It was further held that where a man and a woman intended to become husband and wife and a ceremony of marriage was performed between them by the Clergyman companypetent to perform a valid marriage the presumption in favour of everything necessary to give validity to such a marriage was one of very exceptional strength and unless rebutted by evidence strong,distinct, satisfactory and companyclusive must prevail. In the subsequent decision H. A. Lucas v. Theodore Lucas 1 the earlier decision in Lopez v. Lopez 1 was referred to and followed. Our attention has number been drawn by the learned companynsel for the appellant to any companytrary decision and we companysider that the law was companyrectly enunciated in Lonez v. Lopez 1 on the effect of dispensation which held the field for all these years on the question that once dispensation has been obtained from the appropriate authorities of the Roman Catholic Church a marriage between the parties who are within the prohibited degrees of companysanguinity is number null and void and numberdecree for nullify can be granted under s. 19 of the Indian Divorce Act in such cases. For the above reasons the appeal fail- and it is dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1194, 11 96, 1197 1250 of 1967. Appeals by certificate from the judgment and order dated November 22, 23 and 24, 1966 of the Bombay High Court in Special Civil Applications Nos. 1476 and 1424 of 1966. L. Sanghi, C. K. Ratnaparkhi and A. G. Ratnaparkhi, for the appellant in C.A. No. 1194/67 . N. Lokur, C. K. Ratnaparkhi, A. G. Ratnaparkhi and M. Srivastava, for the appellant in C.A. No. 1196/67 . C. Bhandare, B. D. Sharma, for the appellants in C.As. Nos. 1197 and 1250/67 and Respondent No. 2 in C.As. Nos. 1194 and 1196/67 . Sharad Manohar and B. P. Maheshwari, for respondent No. 1 in C. As. Nos. 1194 and 1197 of 1967 . N. Phadke, Sharad Manohar and B. P. Maheshwari, for respondent No. 1 in C.As. Nos. 1196 1250/67 . N. Lokur, G. L. Sanghi, C. K. Ratnaparkhi, A. G. Ratna- parkhi and B. M. Srivastava, for respondent No. 2 in C.As. Nos. 1197 1250/67 . The Judgment of the Court was delivered by MATHEW, J. The respondents in these appeals filed writ peti- tions in the Bombay High Court challenging the validity of the Borough Municipalities Validation of Certain Taxes on Buildings and Lands Act, 1965 Maharashtra Act No. 111 of 1966 , hereinafter called the Validating Act, on the ground that the provisions of the Act violated their fundamental rights under Art. 14 of the Constitution and for restraining the appellants from levying house tax on the mills, factories and buildings companynected therewith of the respondents or companylecting the same from them. A Division Bench of the High Court held that sections 3 b , 4 1 , 4 2 and 5 of the Validating Act were invalid as they companytravened Art. 14 and granted the prayer for restraining the appellant-Municipality from levying and companylecting the tax. These appeals, by certificate, are directed against the judgment of the Division Bench. Till the year 1947, the appellant-Municipality used to levy house tax on the mills, factories and buildings companynected therewith of the respondents in these appeals on the basis of their annual letting value and the annual letting value for this purpose was ascertained in the numbermal way, that is, by ascertaining the amount at which the buildings might reasonably be expected to let from year to year. In 1947, the appellant-Municipality made fresh rules for levy of house tax and rule 2 c of the new rules ran as follows 2 c In the case of mills and factories and buildings companynected therewith, house tax on buildings shall be levied at the usual rate on the annual rental value fixed at Rs. 40/- for every 100 square feet or portions thereof for each sterey, floor or cellar. Explanation The expression building companynected therewith means and includes warehouses, godowns, millshops, etc. which are within the companypound of mill premises but does number include residential buildings, such as bungalows, out-houses. Note Buildings which are number taxed under Rule 2 c shall be taxed under the ordinary rules. Under this rule,-the annual rental value of all the buildings of mills and factories other than residential buildings was fixed at a uniform rate of Rs. 40/-for every square foot of floor area irrespective of the actual rental value of the premises. One of the respondents, namely, Lokamanya Mills. Barsi, Limited, claimed refund of amounts paid by them on the basis that Rule 2 c was ultra vires the Boroughs Act and they filed 4 suits for the same. Against the decrees dismissing the suits, appeals were preferred to this Court and they were finally disposed of by this Court in Lokamanya Mills, Barsi Ltd. v. Barsi Borough Municipality 1 . This Court, after referring to the provisions of S. 78 and the explanation to S. 75 of the Boroughs Act, held that the Municipality companyld levy a rate on lands and buildings on the basis of their capital or annual letting value and that in framing rule 2 c , the Municipality had adopted a mode of valuation different from the one sanctioned by the Boroughs Act. The Court also observed The vice of the rule lies in an assumed uniformity of return per square foot which structures of different classes which are in their nature number similar, may reasonably fetch if let out to tenants and in the virtual deprivation to the rate-payer of his statutory right to object to the valuation. Accordingly, the Court allowed the appeals and decreed the suits. The main objects of the Validatting Act were to enable the municipalities governed by the Boroughs Act to levy house tax on mills factories and buildings companynected therewith on the basis of rule 2 c and to validate the levy and companylection of the tax with retrospective effect. Section 3 of ,the, Validating Act 1 1962 1 S.C.R. 306. brings about certain amendments in the Boroughs Act. In s. 3 of the Boroughs Act, a clause is inserted which lays down that rate on buildings or lands includes any tax imposed on buildings or lands. Another amendment introduced in the Boroughs Act is with reference to Explanation to s. 75. Prior to the amendment, the explanation to s. 75 was as follows In the case of lands the basis of valuation may be either capital or annual letting value. This explanation was substituted by the Validating Act by an explanation which reads Explanation For the purposes of a rate on buildings or lands, the basis of valuation may be the annual letting value. the annual value the floor area, in the case of mills, factories buildings and lands companynected therewith the capital value in the case of vacant lands. Both these amendments were given retrospective effect from the companymencement of the Boroughs Act. Sections 4 and 5 of the Validating Act are designed to validate with retrospective effect, the levy and companylection of tax numberwithstanding the decision of this Court. Sub-section 1 and 2 of s. 4 provide 4 1 Any house tax and any water tax levied or purported to be levied and companylected in respect of any mills, factories and buildings and lands companynected therewith or in respect of any vacant lands, under the Boroughs Act and rules made thereunder, at any time before the companymencement of this Act shall be deemed to have been levied and companylected by or under the Boroughs Act as amended by this Act and accordingly numberwithstanding anything in any judgment, decree or order of any Court any such house tax or water tax levied and companylected shall, for all purposes be deemed to be, and always to have been, validity levied and companylected, and shall number be called in question merely on the ground that the tax was number levied on the basis of the annual letting value, or was levied on the basis of a uniform rate on the floor area, or that it was levied on the basis of capital value or a percentage on such value, or on the ground that any proceeding laid down in the Boroughs Act or in the rules was number followed. 4 2 anything done or any action taken, by or on behalf of any Borough Municipality or any officer of such Municipality, acting or purporting to act under the provisions of the Boroughs Act or any rules made thereunder for or in companynection with the levy or companylection of the said taxes, shall be deemed for all purposes to have been validly done or taken and numbersuit or other legal proceedings whatsoever shall be entertained or companytinued in any Court on any or all of the grounds mentioned in sub-section 1 . Section 5 provides, among other things, for recovery of tax by the municipal authority companycerned and the period within which it should be recovered, etc. The two points which arise for companysideration in these appeals are, whether rule, 2 c was available to the appellant-Municipality for imposing house tax on mills, factories and buildings companynected therewith of the respondents and whether the rule can be deemed to have been in operation in order that the levy and companylection of house tax might be validated with retrospective effect It may be recalled that rule, 2 c was struck down by this Court in Lokamanya Mills, Barsi Ltd. v. Barsi Borough Muni- cipality 1 on the, basis that the Boroughs Act authorized levy of house tax only on the basis of annual letting value or capital value of the land or building as the case may be, and that rule 2 c as it purported to levy house tax on the basis of the floor area was ultra vires the Act. When the rule was struck down by this Court, the effect was, that the rule companyld never be deemed to have been passed. Apart from rule 2 c , there was numbercharging provision similar to rule 2 c either in the Boroughs Act, or in the Validating Act for levying house tax on mills, factories and buildings companynected therewith. After rule 2 c was struck down, the Municipality did number frame any rule under the provision of S. 75 of the Boroughs Act for imposing house tax on mills factories or buildings companynected therewith. The Validating Act has number also revived or resurrected rule 2 c . Therefore, the position was ,that there was numbercharging provision for imposition of house tax on the mills, factories or buildings companynected therewith. It is only if there was a charging provision for imposing house tax on the mills, factories or buildings companynected therewith that any house tax companyld be imposed upon the mills, factories or buildings companynected therewith of the respondents. All that the explanation to s. 75 substituted by the Validating Act did was 1 1962 1 S.C.R. 306. to enact that, for imposing house tax, floor area will be the basis of valuation in the case of mills, factories or buildings companynected therewith. The companysequence is that there companyld be numberlevy of house tax on the mills, factories or buildings companynected therewith of the respondents number companyld any demand be made on the respondents on the basis of any levy. The High Court was, therefore, right in restraining the appellant-Municipality from levying house tax on the mills, factories or buildings companynected therewith of the respondents and in quashing the demand numberice issued. Section 4 did number resurrect rule 2 c with retrospective effect in order that it might be said that there was, in the eye of law, a provision for charging house tax on mills, factories or buildings companynected therewith so that the tax levied and companylected might be validated. Even if s. 4 had resurrected rule 2 c and said that it shall be deemed to have been passed under the Validating Act with retrospective effect, that might number have cured invalidity on account of its being violative of Art. 14 of the Constitution as it imposed a flat rate on the floor area without making any classification of the area on the basis of income, productivity. or age of building, etc. But we do number think it necessary to pass upon this hypothetical question as s. 4 did number revive or resurrect rule 2 c , much less, give it retrospective operation. In this view, we have numberoccasion to reach ?the companystitutional question as regards the validity of the impugned sections of the Validating Act and we express numberopinion upon it. We think that it was number necessary for the High Court to have struck down the provisions of sections 3 2 , 4 1 , 4 2 and 5 of the Validating Act. When rule 2 c was held to be inoperative by virtue of the decision of this Court, all the reliefs claimed by the respondents in the writ petitions companyld have been given to them without striking down these provisions. It is a wise tradition with Courts number to decide a companystitutional question if the case can be disposed of on other grounds. We dismiss the appeals but, in the circumstances, make numberorder as to companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2161 of 1969. Appeal by certificate from the judgment and order dated April 5, 1968 of the Kerala High Court at Ernakulam in Incometax Referred Case No. 16 of 1962. D. Karkhanis, B. D. Sharma and R. N. Sachthey, for the appellant. Sukumar Mitra and T. A. Ramachandran, for the respondent. The Judgment of the Court was delivered by JAGANMOHAN REDDY J.-This is a second round of litigation because on the first occasion this Court allowed Appeal No. 324 of 1965 on September 20, 1966 and remanded the case for being re-heard and dealt with in accordance with the directions given in that judgment. After the matter went back a Division Bench of the Kerala High Court, Raghavan, J. as he then was and Issac, J. heard the matter but as there was difference of opinion between the learned Judges the case was placed before Mathew, J. as he then was who agreed with the judgment of Raghavan, J.This is an appeal against that judgment by certificate. Inasmuch as this Court had earlier companysidered the case we. may take the facts as stated in the following passage in that judgment The appellant is a limited companypany incorporated under the Travancore Companies Regulation and is carrying on business, in the State of Kerala of manufacturing sugar, running a distillery and also a tincture factory. The appellant- companypany was floated with a view to taking over the business assets of a companypany called Travancore Sugars Ltd. which was being would up and in which the State Government held the largest number of shares , the Government Distillery at Nagercoil and the business assets of the Government Tincture Factory at Trivandrum. For this purpose an agreement dated June 18, 1937, was entered into between the Government of Travancore and Sir William Wright on behalf of Parry Co. Ltd., the promoters of the appellant-company. Under the said agreement the assets of all the three companycerns were agreed to be sold by the Government of Travancore to the appellant-company. Clause 3 of the agreement provided that the cash companysideration for the sale of assets of the Travancore Sugars Ltd. shall be 3.25lakh rupees. Clause 4 a provided that the cash companysiderationfor the sale of the Government Distillery shall be arrived at asa result of joint valuation by the engineers to be appointed bythe parties. Clause 5 a stated that the cash companysideration for the sale of assets of the Government Tincture Factory shall be the value according to the books. Under clause 4 b and c of the agreement the Government undertook to recognise the transfer of the licence from the licensees of the distillery to the appellant and to secure to it the companytinuance of the licence for a companytinuous period of five years after the termination of the then existing licence. Under clause 5 b of the agreement the Government agreed to purchase the pharmaceutical products manufactured by the appellant in the tincture factory, for its medical requirements. Under clause 6 of the agreement all books of account and companynected documents are to be open to inspection by the authorised officers of the Government, Under clause 10 the, Government was entitled to numberinate a director on the board of directors of the appellant-company who would number be entitled to any voting power or to interfere with the numbermal management of the companypany. Apart from the cash companysideration referred to in the agreement, clause 7 of the said agreement provided for further payments as follows The Government shall be entitled to twenty per cent of the net profits earned by the companypany in every year subject however to a maximum of rupees forty thousand per annum, such net profits for the purposes of this clause to be ascertained by deduction of expenditure from gross income and also after-- provision has been made for depreciation at number less than the rates of allowances provided for in the income-tax law for the time being in force, and payment of the secretaries and treasurers remuneration. By another agreement dated January 28, 1947, the following clause was substituted for the above caluse 7 of the original agreement The Government shall be entitled to ten per centum of the net profits of the companypany in every year. For the purpose of this clause net profits means the amount for which the companypanys audited profits in any year are assessed to income-tax in the State of Travancore. For the assessment year 1958-59 the companyresponding previous year being May 1, 1956, to April 30, 1957 the amount payable to the Government under the aforesaid clause 7 came to Rs. 42,480. The Appellate Assistant Commissioner disallowed the claim of the appellant for deduction of this amount on the ground that it was virtually mere sharing of profits after they came into existence. The Appellate Assistant Commissioner relied upon the decision in Pondicherry Railway Co. Ltd., v. Commissioner of Income-tax 1931 5 I.T.C. 363 58 I.A. 239 in disallowing this item of expenditure The appellant preferred an appeal against the order of the Appellate Assistant Commissioner to the Income Tax Appellate Tribunal which held that the case came within the principle of the decision in British Sugar Manufacturers Ltd. v. Harris Inspector of Taxes 1939 7 T.R. 101 C.A. , and that the payment of companymission was an expenditure made in order to earn profits, of the business and number an expenditure paid out of earned profits. In the result the Tribunal allowed the appeal by the companypany. At the instance of the respondent the Tribunal referred the following question of law to the High Court of Kerala. Whether, on the facts and in the circumstances of the case, the payment of Rs. 42,480 by the assessee to the Travancore Government under the agreements dated June 18, 1937, and January 28, 1947, was allowable under section 10 of the Income-tax Act?. By its judgment dated August 20, 1963, the High Court held that the payment of the aforesaid amount companystituted capital expenditure and was number allowable under section 10 2 xv of the Income-tax Act. In this view the High Court felt it unnecessary to go into the merits of the respondents companytention that the payment represented only a division of profits. The present appeal is brought, by special leave, from the judgment of the High Court of Kerala dated August 20, 1963. On behalf of the appellant in that case who is the respondent before us it was submitted that the payment of Rs. 42,480 was number capital expenditure but was expenditure of revenue nature which was allowable under s. 10 2 xv of the Act. It was pointed out that the annual payments under cl. 7 were number part of the purchase price of the assets. Reference was made to cls. 3, 4 a and 5 a of the agreement and it was said that separate and full companysiderations were provided for the purchase of the assets of Travancore Sugars Ltd., the Government Distillery and the Government Tincture Factory. In addition to selling these assets, the Government undertook obligations enumerated in cls. 4 b , 4 c and 5 b already referred to. It was companytended that the appellant agreed to make annual payments to the Government in companysideration of these obligations. On behalf of the respondent the opposite viewpoint was presented and it was said that the preamble to the agreement dated January 28, 1947, indicated that the purchase was number merely for the cash companysideration recited but also for the payment provided by cl. 7. Reference was made to the following port-ion of the preamble of the agreement dated January 28, 1947 Whereas on 18th June 1937, an agreement hereinafter called the principal agreement was entered into between M. R. Ry. Rao Bahadure Rajyasevanirata N. Kunjan Pillai Avl., Chief Secretary to the Government acting for and on behalf of the said Government of His Highness the Maharaja of Travancore of the one part and Sir William Wright, Kt. C.B.E., of Messrs Parry Co. Ltd., Madras, acting for and on behalf of the said Messrs Parry Co., Ltd. of the other part, whereby the said Government should sell and the companypany should purchase the assets including the lands of the Travancore Sugars Ltd. with the buildings, out-houses, machinery and other things attached thereto and more fully described in the Schedule A annexed to the said principal agreement, the factory known as the Government Distilleries situate at Nagercoil in South Travancore with lands, buildings, machinery and other things attached thereto and more particularly described in the schedule B annexed to the principal agreement, and all the assets of the factory known as the Government Tincture Factorysituated at Trivandrum and more parti- cularly described in he Schedule C annexed to the principal agreement for the cash companysideration in the said principal agreement mentioned and also in companysideration, inter alia that the Government should be entitled to 20 of the said net profits earned by the companypany in every year subject however to a maximum of Rs. 40,000 per annum, such net profits for the purposes of the said agreement to be ascertained after the deductions set out in clause 7 of the said agreement. This Court while recognising that it is difficult--as indeed all Judges have found it difficult-to determine whether a particular expenditure is in the nature of capital expenditure or in the nature of revenue expenditure and that it was number easy to distinguish whether an agreement is for the payment of price stipulated in instalments or for making annual payments in the nature of income, observed that number only the documents but the surrounding circumstances have to be looked into to ascertain what was the real nature of the transaction from the companymercial point of view. It examined the transaction and was of the view that the companysideration for the sale of the three undertakings in favour of the appellants was 1 the cash companysideration mentioned in the principal agreement, viz., clauses 3, 4 a and 5 a and 2 the companysideration that Government shall be entitled to 20 per cent of the net profits earned by the appellant in every year subject to a maximum of Rs. 40,000 per annum. With regard to the second part of the companysideration there are three important points to be numbericed. In the first place, the payment of companymission of 20 on the net profits by the appellant in favour of the Government is for an indefinite period and has numberlimitation of time attached to it. In the second place, the payment of the companymission is related to the annual profits which flow from the trading activities of the appellant-company and the payment has numberrelation to the capital value of the assets. In the third place, the annual payment of 20 companymission every year is number related to or tied up, in any way, to any fixed sum agreed between the parties as part of the purchase price of the three undertakings. It was also numbericed that there is numberreference to any capital sum in this part of the agreement but on the companytrary, the very nature of the payments excludes the idea that any companynection with the capital sum was intended by the parties. Having companysidered the several aspects of the transaction and having observed that the mere fact that the capital sum is payable by instalments spread over a certain. length of time will number companyvert the nature of that payment from the capital expenditure into a revenue account but the payment of instalments in such a case would have always some relationship to the actual price fixed for the sale of the particular undertaking, this Court rejected the companytention of the Revenue that the amount paid to the Government by the assessee was an expenditure of a capital nature in these words In view of these facts we are of opinion that the payment of the sum of Rs. 42,480 in the present case is number in the nature of capital expenditure but is in the nature of revenue expenditure and the judgment of the, High Court of Kerala on this point must be over- ruled. After this finding for which this Court found support from the decision in Commissioner of Inland Revenue v. 36/49 Holdings Ltd. In Liquidation 1 , Commissioner of I.T. v. Kolhia Hirdagarh Co. Ltd., 2 and the decision of the Judicial Committee in Jones v. Commissioner of Inland Revenue 3 is numberetheless observed that it is number possible for it to finally determine this appeal and that even if the payment of companymission to the Government by the assessee is number capital but revenue payment certain questions would arise for companysideration in this case which the High Court has number dealt with in the reference. These questions as stated in that decision were Firstly, it has to be determined whether the appellant is right in his argument that the payment of companymission is tantamount to diversion of profits by a paramount title secondly, the companytention of the respondent that the transaction should be treated as a joint venture with an agreement to share profits between the appellant and the Government. and thirdly, it has to be companysidered whether the requirements of s. 10 2 xv have been satisfied in this case. It was pointed out on behalf of the appellants in that case who are respondents before us that the payment of companymission was a payment wholly or exclusively laid out for purposes of business. In the circumstances set out above the matter was remanded to the High Court of Kerala. Before that High Court the second companytention whether the transaction should be treated as a joint venture with an agreement to share profits was number pressed and therefore that matter was number companysidered. Mathew, J. as he then was numbered that the Supreme Court had held that the payment was number in the nature of capital payment but was in the nature of revenue payment because the unpaid purchase price was neither a fixed sum number an amount which companyld be ascertained by any method. In this view he companysidered only the first and third companytentions which called for 1 25 T.C. 173. 2 17 I.T.R. 545. 3 1921 K.B. 711. determination by that Court. The learned advocate for the Revenue however at the. outset tried to assail the statement of Mathew J. that the Supreme Court had held that the amount paid to the Government was number a capital expenditure but a revenue expenditure because he realised that if that finding be assailed then it would be immaterial whether the amount paid to the Government amounted to diversion of the profits before they reached the assessee by an over-riding title or whether it was otherwise an allowable deduction under s. 10 2 xv of the Income-tax Act, 1922. In support of the stand taken by him, he submits that a decision of this Court cannot be otose and if that is so then it must be assumed that the question whether the amount is of a capital expenditure or revenue expenditure is still open number only for the Kerala High Court to determine but also for this Court to go into. We cannot accept this companytention in the light of the finding given by this Court where number only did it hold that the amount of Rs. 42,480 was number capital expenditure but that it was also a revenue expenditure. Having so held this Court went further and said that the judgment of the Kerala High Court on that point must be over-ruled. Can there be anything more categorical than this finding? We think number. Raghavan, J. did hint at this incongruity when after pointing out that this Court had held that the payment was number in the nature of a capital payment but was in the nature of revenue payment he said Still the Supreme Court observed since, the other questions were number decided by this Court the Supreme Court companyld number give an answer to the question referred. The learned advocate for the Revenue finding himself in this difficulty attempted to create a dichotomy under which according to him both the capital and revenue nature of the expenditure as well as the payment being wholly and exclusively laid out for the purpose of the business are included in the aforesaid clause xv of sub-s. 2 of s. But we are unable to understand the sequitur. Even supposing that these two kinds of expenditure are included, if the expenditure is of one or the other it becomes deductible. We find numberjustification for this companytention because a cursory reading of that provision would show that it is merely companyfined to the payments wholly and exclusively laid out for the purpose of the business in which expenditure of a revenue nature would also be included along with the expenditure of various other categories. Section 10 1 and 2 xv are as follows - The tax shall be payable by an 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. Such profits or gains shall be companyputed after making the following allowances, namely- to xiv any expenditure number being an allowance of the nature described in any of the clauses to xiv inclusive, and number being in 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. Clause 1 of the section deals with the payment of tax by the assessee in respect of the profits and gains of business, profession or vocation. It is companytended that in companystituting the profits of the business any payment made as a diversion from profits by paramount title has to be deducted before companyputing profits. In so far as S. 10 2 xv is companycerned it takes numbere of the fact that there may be deductions of the nature described in cls. 1 to of sub-s. 2 and that such expenditure is number of a capital nature or personal expenses of the assessee. The expenditure of a capital nature is certainly number an expenditure which is deductible for companyputing profits though it may be an expenditure wholly and exclusively laid out for the purposes of the business etc. If this expenditure is number of a capital nature but of a revenue nature it is certainly deductible under this clause. All other expenditure which is number included in i to xiv or which is number at the very inception deductible as an overriding charge on the whole of the profit-making apparatus will be deductible if it is laid out or expended wholly and exclusively for purposes of such business. The disallowance of personal expenses is because that has been dealt with under s. 7 which deals with expenses wholly and necessarily incurred in the performance of duties and therefore are number included in this clause. Once the crucial question is decided by this Court that the expenditure is number of a capital nature but is a revenue expenditure, we should have thought that the matter ended there and that the answer to the reference was certainly in the affirmative. Whether the expenditure is to be further companysidered as expenditure incurred at the very inception deductible as an over-riding charge on the whole of the profit-making apparatus falling under s. 10 1 or whether it is an expenditure, which apart from it being a revenue expenditure, is also wholly and exclusively laid out for purposes of trade determined upon the principle of ordinary companymercial trading would number make any difference to the answer which companyld be given on the basis of the expenditure being revenue expenditure and number capital expenditure. Even so, Mathew, J. after referring to the several decisions, posed the question, namely, when a trader makes a payment which is companyputed in relation to the profits, the question that arises is, does the payment represent a mere division of profits with any, party or is it an item of expenditure the amount of which is ascertained by reference to profits, to which his answer was the payment would be allowable in the second case but number in the first. Even on the other question whether the payment is an expenditure wholly and exclusively laid out for purposes of trade and ascertained with reference to profits, an examination of the several cases to which a reference has been made by the learned Judge led him to the companyclusion that the payment in question was such an expenditure deductible under s. 10 2 xv . In companysidering the nature of the expenditure incurred in the discharge of an obligation under a companytract or a statute or a decree or some similar binding companyenant, one must avoid being caught in the maze of judicial decisions rendered on different facts and which always present distinguishing features for a companyparison with the facts and circumstances of the case in hand. Nor would it be companyducive for clarity or for reaching a logical result if we were to companycentrate on the facts of the decided cases with a view to match the companyour of that case with that of the case which requires determination. The surer way of arriving at a just company- clusion would be to first ascertain by reference to the document under which the obligation for incurring the expenditure is created and thereafter to apply the principle embalmed in the decisions of those facts. Judicial statements on the facts of a particular case can never assist companyrts in the companystruction of an agreement or a statute which was number companysidered in those judgments or to ascertain what the intention of the legislature was. What we must look at is the companytract or the statute or the decree, in relation to its terms, the obligation imposed and the purpose for which the transaction was entered into. The terms of the companytract have already been set out. Under those terms, a new companypany has to be formed and when it is formed the Government undertook to transfer the assets of all its three undertakings at a certain valuation in order to enable it to earn profits subject to the further stipulation that it should be paid 20 profits for an unlimited duration i.e. as long as the companypany is working, that under cl. 4 b the companypany must further get the present licence of the distillery transferred to it and the Government is required to recognise such transfer and also grant a fresh licence as soon as the present licence is terminated. By cl 4 d it is incumbent upon the companypany to sell its products of the distillery to the Government at prices to be fixed by it and the duty payable by the Government should be at the rate fixed by the Madras Government. Under cl. 5 b the Government shall buy medical products at prices number exceeding companyt plus 1501. Under cl. 7 the Government shall be entitled to 20 of the net profits companyputed on the gross income less expenditure, depreciation and remuneration to the Secretaries and treasurers and under cl, 10 the Government is to have a director numberinated who would number interfere with the numbermal management. It is companytended that the assessee companypany was created for the specific purpose of taking over the assets burdened with the obligations set out above, that it had numbervolition in the matter and ha to take over the assets subject to the aforesaid enforceable obligations before it came into existence. It is therefore submitted that it was an enforceable obligation at source by which part of the revenues of the business activities of the companypany were diverted with, the result that the part so diverted did number become its income at all. The case of Pondicherry Rly. Co. Income-tax Commissioner 1 was sought to be distinguished because it is said in that case the companypany was already in existence, that the venture was a joint venture between the English companypany and the French companypany, that the French companypany merely companytributed to some share of the capital by the grant of a subsidy and land free of charge and that the work in fact was done by the South Indian Railway which was to pay gross receipts less working expenses to the Pondicherry companypany which divided the net profits after deduction of rates and taxes etc. half and half between it and the Pondicherry companypany. On these facts Lord Macmillan who delivered the judgment observed at p. 251 - A payment out of profits and companyditional on profits being earned cannot accurately be described as a payment made to earn profits. It assumes that profits have first companye into existence. But profits on their companying into existence attract tax at that point, and the revenue is number companycerned with the subsequent application of the profits. These observations were subsequently explained by the same learned Law Lord in The Union Cold Storage Co. Ltd. v. Adam- son H.M. Inspector of Taxes 2 when they were sought to be made applicable to the facts in that case. Lord Macmillan said The obligation was companyceived in language entirely different from the language which your Lordships have been companysidering in the present appeal, where there is a companymon form obligation in the lease to pay rent. When, 1 58 I. A. 239. 2 16 T.C. 292 at 331 therefore, in the passage referred to by the Attorney General in the Pondicherry case I said that a payment out of profits and companyditional on profits being earned cannot accurately be described as a payment made to earn profits, I was dealing with a case in which the obligation was, first of all, to ascertain the profits in a prescribed manner, after providing for all outlays incurred in earning them, and then to divide them. Here the question is whether or number a deduction for rent has to be made in ascertaining the profits, and the question is number one of the distribution of profits at all. In Indian Radio Etc. Co. Ltd. v. Commissioner of Income-tax Bombay 1 Lord Maugham delivering the opinion of their Lord- ships of the Privy Council observed at p. 278 - The sum is in truth made payable as part of the companysideration in respect of a number of different advantages which the appellants derive from the agreement and number all of them can be shown to be of a purely temporary character. The agreement as a whole is much more like one for a joint adventure for a term of years between the appellant companypany and the Communications Company than one for a lease for that period. In that view it was held that the deduction was number allowable. The Privy Council in order to avoid any misconception was careful enough while arriving at that companyclusion to say that they have number taken the view that the case is governed by the decision in Pondicherry case though that case numberdoubt throws light on the nature of the problem which has to be solved in the case before them, and they further added that a sentence in the judgment in that case has been explained, if explanation was necessary, by Lord Macmillan in the subsequent case of W.H.E. Adamson v. Union Cold Storage Company see pages 278-279 . The Indian Radio case was under S. 10 2 ix . In British Sugar Manufacturers Ltd. v. Harris 1 which the Tribunal said on the facts was nearest to the case before us, the companypany was carrying on business as manufacturers of beat sugar, had agreed to pay to two bodies in each of four years for division between them as they mutually agreed upon 20 of the net profits of the companypany in companysideration of their giving to the companypany the full benefit of their technical and financial knowledge and experience, and giving to the companypany and its directors advice to the best of their ability respectively on all questions of or relating to manufacture and finance and disposal of the companypanys products. It was held, reversing the decision of Finalay J., that in ascertaining the profits or gains of the 1 5 I.T.R. 270. 2 7 I.T.R. 101-19382 K.B. 220. companypany for any year assessable to income-tax the sum payable, to the two bodies under this agreement out of the earnings of the companypany should be allowed as a deduction as being money wholly or exclusively laid out or expended for the purposes of the trade. Sir Wilfrid Green M.R. said at pp. 233-234- Now bearing all those things in mind, the question arises On which side of the line does the case fall-? I quite accept the proposition that there is a line between a companytract for payment of a share of profits simpliciter and a payment of remuneration which is deductible in truth before the profits divisible are ascertained, and that line in some cases may be very difficult to draw. It appears to us that the amount to be paid by reference to profits can either be that it is paid after the profits become divisible or distributable or that the amount is payable prior to such distribution or division to be companyputed by a reference to numberional or as in some decisions what is termed as apparent net profits. In the former instance it will certainly be a distribution of profits and number deductible as an expenditure incurred in running the business but in the latter it may, on the facts and circumstances of the case, and the agreement or the nature of the obligation tinder the particular instrument, which governs the obligation be an expenditure incurred as a companytribution to the profit earning apparatus or, as it is said, incurred at the inception and deductible as an over- riding charge of the profit-making apparatus or is one laid out and expended wholly and exclusively for purposes of such business. It is true that sub-section 1 of Section 10 of the Indian Income-tax Act, 1922 imposes a charge on the profits and gains of a business which accrue to the assessee while sub-section 2 of the said Section enumerates various items which are admissible as deduction. Where income which accrues to the assessee is number his income the question of admissible deductions would number arise. Therefore, where income is diverted at source so that when it accrues it is really number his income but is somebody elses income the question as to whether that income falls under sub-section 2 of Section 10 does number arise. Again, income can be said to be diverted only when it is diverted at source so that when it accrues it is really number the income of the assessee but is somebody elses income. It is thus clear that where by the obligation income is diverted before it reaches the assessee, it is deductible. But where the income is required to be applied to discharge an obligation after such income reaches the assessee it is merely a case of application of income to satisfy an obligation. of payment and is therefore number deductible. On a companystruction of the terms of the companytract in this case and the obligations arising therefrom we cannot say that the companyclusions of the Kerala High Court are unsustainable. The assessee had numberchoice at the time of inception, as a companydition of its companying into existence to agree to the several terms stipulated by the Government for transferring the profit earning assets No doubt as the learned advocate for the Revenue said, the companypany paid the Government in full for the value of the assets and the companypany had therefore numberobligation to the Government on that account. This may be true to some extent but then there are the other obligations which are interlinked with the transfer of assets numberwithstanding the fact that the companypany paid a price fixed for the transfer of the assets which may number in all cases, as in this case it is number, be the true value of the assets which are subject matter of the transaction. The Government has established businesses and they were willing to part with them at a certain price plus certain stipulation to which we have referred which form the companyditions of transfer. It may be mentioned that under the companytract the companypany had to engage only the Travancore labour and staff, that it had to take apprentices recommended by the Government and train them and that there was numberlimitation as to the period the companypany had to pay 20 or as the later agreement revised it to 10 of the net profits, nationally companyputed for that purpose after deduction of certain items mentioned in cl. 7.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals No, 193 194 of 1971. Appeals by special leave from the judgment and order dated April 11, 1969 of the Mysore High Court at Bangalore in Writ Petitions Nos. 1416 and 2918 of 1967. R. Som Nath Iyer, and M. Veerappa, for the appellant in both the appeals . B. Datar and S. N. Prasad for respondent No. 1 in both the appeals . Ramajois S. S. Khanduja and Lalita Kohli, for respon- dents Nos. 2 4-8 Interveners in M. Choudhajah 14 others in C.A. No. 193/71 . G. Ratnaparkhi for Interveners C. Y. Shastri 19 Ors. in C.A. No. 193/71. . The Judgment of the Court was delivered by BEG, J. The State of Mysore has companye to this Court with two appeals number before us by Special Leave against the companymon judgment on two Writ Petitions which were allowed. The High Court of Mysore had quashed three State Government Notifications Nos. GSRS. 384, and 392 and 303, dated 30th August, 1967, amending the Mysore State Accounts Services Recruitment Rules, 1959, and the promotions of Respondents 3 to 8 of in Writ Petition No. 1416/67. It had directed the State of Mysore to companysider the cases of the petitioners with those of Respondents 3 to 8 for promotion before it under the Mysore State Accounts Services Recruitment Rules 1959, made under Article 309 of the Constitution of India. numberified on 26-5-1959. The two petitioners before the High Court, who are respon- dents before us, had joined the Accounts services in the Comptrollers office of the former Mysore State as first and second Division Clerks. Consequent upon the abolition of the Comptrollers office the petitioners began working as Accounts Clerks under the Chief Engineer, P.W.D. On 31st October, 1953, a Divisional Accounts Cadre, in the scale of Rs. 130-335 was created by the Mysore Government under the administrative companytrol of the Chief Engineer. Both the petitioners passed the prescribed examinations and were absorbed in the Divisional Accounts Cadre. It appears that in April, 1959, the P.W.D. Reorganisation Committee had recommended the transfer of the P.W.D. Accounts Branch in toto to the newly set up Controller of State Accounts. in accordance with this recommendation, the petitioners came under the administrative companytrol of the Controller and the designation of their office was changed to that of Accounts Superintendent. On 15th May, 1959, the two formerly separate units of the Accounts service, namely the W.D. Accounts unit, under the Chief Engineer of P.W.D., and the. Local Fund Audit unit, known also as the State Accounts Department, came under the companymon administrative companytrol of the Controller of State Accounts. On 26h May, 1959, the Mysore State Accounts Services Cadre and Recruitment Rules were issued and companybined cadre strength were fixed. The High Court after examining the rules of 1959, in the companytext of all the orders, proceeding and following the promulgation of these Rules, companycluded There cannot be the slightest doubt from these rules that a clear and companyplete integration was brought about between the two units. It pointed out that the qualifications and status of the officers of the formerly separate units were identical, their work was of the same nature, the recruiting authorities were the same, the standards observed and tests prescribed for entry into the formerly separate units were identical. The result of the Rules of 1959 was that an artificial distinction based on mere separate companytrol had been abolished so that both units came under the legally single administrative Control of the Accounts Department incharge of the Controller of State Accounts. The petitioners became absorbed in what was legally a single permanent service regulated by uniform After examining the cases of the petitioners that, in the matter of promotions, they were discriminated against simply because they had worked in the P.W.D. Accounts Unit, which had ceased to exist, the High Court held that the petitioners grievances were justified. It found that figures showing the number of appointments of members of the same service derived. from the formerly separate units indicated a striking disparity in the promotional oppor- tunities between the officers of the two wings in the same cadres. It said While the rules of 1959 integrated the two wings into one service and provided for promotion on the basis of seniority-cum-merit, the impugned Notifications fixing up the cadre strength reduce the number of promotional posts available to the Public Works Accounts Unit to a very low figure as companypared with the promotional opportunities open to the officers in the other wing. It had, therefore, struck down the impugned Notifications as violations of the Constitutional guarantees given by Article 14 and 16 1 of the Constitution. The learned Counsel for the State of Mysore has companytended firsly, that the petitioners, number respondents before us, were never promoted or appointed to offices held by them under the rules of 1959 so that they companyld number companyplain of denial of equality of promotional chances and, secondly, that the amendments made retrospectively in the rules in 1967, justifying the differences of promotional chances between the two wings of the same service, were perfectly legal and bore a rational nexus to the object of the differences made. So far as the first companytention is companycerned, we are unable to entertain it for the first time in this Court. We do number find any indication that the point, even if such a position was taken on behalf of the State, was argued at all before the Mysore High Court. The submission that the High Court had wrongly proceeded on the assumption that the petitioners were promoted and appointed under the rules of the integrated service although the point was ,argued before the Mysore High Court, is number borne out even by any assertion in the application made by the appellant under Article 1 3 2 and 1 3 3 1 c of the Constitution of India before the Mysore High Court. Our attention was invited to a paragraph in that application where it was submitted that the High Court should have held that the answering respondents were placed in independent charge of the duties of Assistant Commissioner without companyferring any right of benefit of promotion But, this submission does number appear to us to meet the objection that the point was number urged, when the petitions were argued before the High Court, and the petitioners were number entitled to the benefit of the Rules of 1959 on the ground that they were number promoted to the posts held by them in the service. It is a well recognised practice of this Court number to allow new points to be raised for the first lime in this Court particularly when they involve investigation of questions of fact We, therefore, do number propose to deal with a companytroversy which does number arise for companysideration before us. The question which remains for companysideration by us is the one relating to the validity of a division into two classes of ,members of the same service, belonging to the same cadres, for purposes of a difference to be made in their promotional chances. Learned Counsel for the State has sought to justify this difference in promotional chances by a reference to differences in the historical backgrounds and to the practice of making the distinction in promotional chances. The Mysore High Court had very rightly observed that neither a fortuitous artificial division in the past number the unconstitutional practice of making an unjustifiable discrimination in promotional chances of Government servants belonging to what was really a single category, without any reference either to merit or seniority, or educational qualifications, companyld justify the differences in promotional chances. We think that it had rightly declared the purported amendments in the rules of 1959, which sought to disintegrate a service which had been integrated, to be ultra vires. Such amendments made for the purpose of justifying the illegal promotions made, in the teeth of the protection companyferred by Articles 14 and 16 1 of the Constitution of India upon Indian citizens in Government service, companyld number be upheld. , The High Court rightly relied on State of Mysore v. Padmana- bhacharya 1 to hold that the power of making rules relating to recruitment and companyditions of service under the proviso to Article 309 companyld number be used to validate unconstitutional discrimination in promotional chances of Government servants who belong to the same category. It must be understood that a Government servant whose case is companysidered for promotion but who fails to be selected on an application of just and reasonable criteria, such as that found in the merit-cum-seniority rule found in the Rules of 1959, cannot companyplain of discrimination. But, what the petitioners had companyplained of and established was that their cases for promotion were number companysidered at all under these Rules on the false premise that they belong to a class which disables them from obtaining equal companysideration for promotion to the offices to which they companysidered themselves entitled. The effect of the order of the Mysore High Court was only that cases of the petitioners, number respondents before us, will be companysidered, in accordance with Rules of 1959, in preparing the seniority list on merit-cum-seniority basis. All that the order of the High Court enjoins is that the petitioners before it must number be ignored simply on the assumption that the source of their initial recruitment debars the companysideration of their merits for promotion. Learned Counsel for the State of Mysore had attempted to rely strongly on Ram Lal Wadhwa Anr. v. The State of Haryana Ors. 2 and S. C. Jaisinghani v. Union of India 3 . In Ram lal Wadhwas case supra , the majority of learned Judges of this A.I.R. 1966 S.C. 602. 2 A.I.R. 1972 S.C. 1982. 3 1967 2 S.C.R. 703. Court had reached the, companyclusion that the historical and other special reasons existing, on the facts of that particular case, justified the difference made in promotional chances of the teachers companying from two different sources. We think that Wadhwas case was decided on its own facts, the most important of which was that, after full companysideration of the pros and companys of various alternatives before it, the Government companycerned had companye to the companyclusion that the provincialised cadre must be gradually and number suddenly eliminated. In that case, there was numberactual formal decision to integrate the two branches -as is the case before us. The rules before us levy numberdoubt whatsoever, as we have already pointed out, that a companyplete integration of the service whose members came originally from two sources had been actually accomplished. That was number the position in Wadhwas case which companyld number, therefore, help the appellant. Similarly, Jaisinghanis case supra was also distinguishable, as it has been rightly distinguished by the Mysore High Court, on facts of that particular case. There quotas for promotion had been fixed by the Government in exercise of a statutory power on rational and reasonable criteria. In the case before us, the amendments in existing rules were sought to be made for the purpose of validating what, as the Mysore High Court had rightly held, were violations of Articles 14 and 16 of the Constitution. Other cases mentioned by the Mysore High Court i.e. State of Punjab v. Joginder Singh 1 and K. M. Bakshi v. Union of India 2 also show that inequality of opportunity of promotion, though number unconstitutional per se, must be justified on the strength of rational criteria companyrelated to the object for which the difference is made. In the case of Government servants, the object of such a difference must be presumed to be a selection of the most companypetent from amongst those possessing qualifications and backgrounds entitling them to be companysidered as members of one class. In some cases, quotas may have to be fixed between what are different classes or sources for promotion on grounds of public policy. If, on the facts of a particular case, the classes to be companysidered are reality different, inequality of opportunity in promotional chances may be justifiable. On the companytrary, if the facts of a particular case disclose numbersuch rational distinction between members of what is found to be really a single class numberclass distinctions can be made in selecting the best. Articles 14 and 16 1 of the Constitution must be held to be violated when members of one class ire number even companysidered for promotion. The case before us falls, in our opinion, in the latter type of cases where the, difference in promotional opportunities of those who were wrongly divided into A.I.R. 1963 S. C. 913. 2 1965 SUPP. 2 S. C. R. 169. two classes for this purpose only companyld number be justified on any rational grounds. Learned Counsel for the State was unable to indicate any such ground to us. We, therefore, think that the Mysore High Court rightly held that the impugned numberifications were unconstitutional. Consequently, we dismiss these appeals with one set of companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1204 of 1967. Appeal by special leave from the judgment and order dated September 9, 1966 of the Mysore High Court in Writ Petition No. 885 of 1964. P. Rao and S. N. Prasad and B. D. Sharma, for the appellant. P. Maheshwari and C. L Joseph, for the respondent. The Judgment of the Court was delivered by MATHEW, J.-This is an appeal by Special Leave from the order dated the 9th of September, 1966 passed by the High Court of Mysore in a Writ Petition filed by the first respondent. The first respondent was a companybatant Clerk in the Indian Army for a period of more than 14 years. He was discharged from that post on 9th June, 1953. On 2nd July 1953, he was re-employed as an ordinary clerk on the pay scale of Rs. 55- 85EB-4-125-5-130. His pay was re-fixed in the above scale at Rs. 70/- plus a personal pay of Rs. 2.50 by an Order dated 28th October, 1958, with effect from the date of re- employment, i.e., 2-7-1953. On 15th July, 1960, the Government of India, Ministry of Defence, issued a general Order called Office Memorandum No. 2 54 58/5801/D Civil providing for certain benefits to ex-military personnel on re-employment on the basis of their length of actual military service. The general effect of that Order was that those who are entitled to its benefits, would get fixed in the scale applicable to them by adding to the bottom of their scales increments equal to the total number of companypleted years of military service. The Order so far as it is relevant for the purpose of this appeal is companytained in paragraphs 3 and 4 thereof and they read as follows - These orders will apply to all cases of reemployment occurring on or after 25-11-58 and past cases will number be reopened. In the cases of pensioners who are in service on the date of issue of these orders and have been re-employed from a date prior to 25-11-1958 for an unspecified period or for a period which extends beyond the date of issue of the present orders may, subject to their option, be brought under the provisions of these orders with immediate effect. 4 . The option should be exercised in writing within a period of three months from the date of issue of these orders. The option once exercised shall be final. The first respondent claimed that he was entitled to the benefit of the Order but the claim was rejected by the Government and so he filed the Writ Petition companytending that as he answered the description of one to whom the benefit of the Order companyld properly be extended he should be given its benefit. The High Court allowed the writ petition and issued an order directing respondent No. 2 to refix the pay of respondent No. 1 in the scale of pay of Rs. 55-3-85-EB-4-125-130 at 89/- as from 2-7-1953 and to make companysequential adjustments and payments. The appellant companytended before us that the Order was number applicable to the first respondent, as he was re-employed before 25-11-1958 and his pay had already been fixed after re-employment and therefore according to the terms of the Order the case of the 1st respondent, being a past one, companyld number have been reopened. To resolve this question, it is necessary to understand the provisions of the Order. The first sentence in para 3 of the Order makes it clear that it is applicable only to persons reemployed on or after 25-11- 1958. Respondent No. 1 clearly does number companye within this category. The Order then goes on to say that past cases will number be re-opened. That means that cases of persons re- employed prior to that date will number be re-opened. But the companytention of the first respondent is that although he was re-employed prior to 25-11-1958, he is governed by clause 3 of paragraph 3, and as he has exercised the option pursuant to clause 4 of the Order he is entitled to the benefit of the Order. In other words, the companytention was that an exception to the general rule that past cases will number be re-opened has been created by clause 3 of paragraph 3 of the Order in favour of persons who were re-employed from a date prior to 25-11-1958 for an unspecified period or for a period which extended beyond the date of the issue of the Order and who exercised the option to be brought under the provisions of the Order with immediate effect and as his case fell within the exception, he was entitled to the benefit of the Order. We think that the companytention of the first respondent is well founded. It is numberdoubt true that past cases, namely, cases of persons re-employed prior to 25-11-1958 will number be reopened. That is the general rule. But the effect of clause 3 of paragraph 3 is to create an exception to the general rule in the case of persons re- employed before 25-11-1958 for an unspecified period or for a period which extends beyond the date of the Order and who have exercised their option in writing to be brought under the Order. There is numberdispute that the first respondent has exercised the option to be brought under the provisions of the Order. We, therefore, think that the High Court was right in its view that the first respondent was entitled to the benefit of the Order. The appellant, however, companytended that the Order being an administrative direction companyferred numberjusticiable right upon the first respondent which companyld be enforced in a Court by a writ or order in the nature of mandamus. The appellant submitted that the very foundation for the issue of a writ or an order in the nature of mandamus is the existence of a legal right and as an administrative order companyld companyfer numberjusticiable right, the High Court was wrong in issuing the order directing the second respondent to fix the pay of the first respondent in accordance with the Order. Generally speaking, an administrative Order companyfers numberjusticiable right, but this rule, like all other general rules, is subject to exceptions. This Court has held in Sant Ram Sharma v. State of Rajasthan and Another 1 that although Government cannot supersede statutory rules by administrative instructions, yet, if the rules framed under Art. 309 of the Constitution are silent on any particular point, the Government can fill up gaps and supplement the rules and issue instructions number inconsistent with the rules already framed and these instructions will govern the companydi- tions of service. In Union of India and Others v. M s. Indo Afghan Agencies Ltd. 2 , this Court, in companysidering the nature of the Import Trade Policy said Granting that it is executive in character, this Court has held that Courts have the power in appropriate cases to companypel performance of the obligations imposed by the Schemes upon the departmental authorities. To say that an administrative order can never companyfer any right would be too wide a proposition. There are administrative orders which companyfer rights and impose duties. It is because an administrative order can abridge or take away rights that we have imported the principle of natural.justice of audi alteram partem into this area. A very perceptive writer has written Let us take one of Mr. Harrisons instances,- a regulation from the British War Office that numberrecruit shall be enlisted who is number five feet six inches high. Suppose a recruiting officer musters in a man who is five feet five inches only in height, and pays him the Kings shilling afterwards the officer is sued by the 1 1968 1 S.C.R. 111. 2 1968 2 S.C.R. 366, 377. Government for being short in his accounts among other items he claims to be allowed the shilling paid to the undersized recruit. The Court has to companysider and apply this regulation and, whatever its effect may be, that effect will be given to it by the Court exactly as effect will be given to a statute providing that murderers shall be hanged, or that last wills must have two witnesses. John Chipman Gray on The Nature and Sources of the Law . We should number be understood as laying down any general proposition on this question. But we think that the Order in question companyferred upon the first respondent the right to have his pay fixed in the manner specified in the Order and that was part of the companyditions of his service. We see numberreason why the Court should number enforce that right. It was companytended on behalf of the appellant that the Order number being retrospective in character, the respondents pay should number have been fixed with retrospective effect from 2- 7-1953. The Order is number retrospective in character. The High Court was therefore wrong in fixing the pay with retrospective effect from 2-7-1953. The direction companyld only be to fix the pay with effect from the date of the Order and the first respondent did number companytend otherwise in this Court. The second respondent will, therefore, fix the pay of the 1st respondent in accordance with the provisions of the Order with effect from the date of the Order.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1308 of 1967. Appeal by special leave from the judgment and decree dated December 7, 1966 of the Allahabad High Court in Appeal No. 5252 of 1960. B. Agarwal and K. P. Gupta, for the appellant. N. Dikshit and S. K. Bisaria, for the respondents. The Judgment of the Court was delivered by KHANNA, J. This appeal by special leave is directed against the judgment of Allahabad High Court whereby that Court re- versed the decisions of the trial Court and the first appellate companyrt and awarded a decree for the possession of the land in dispute in favour of the plaintiff-respondents against the defendant-appellants. The appellants were further held to be entitled to withdraw the mortgage amount which had been deposited by the respondents. On January 16, 1923 Ganga Prasad Rai, father of Lachhman Singh plaintiff-respondent No. 7, executed a mortgage deed in respect of land in dispute for Rs. 600 in favour of Ram Cheej Pandey and put him in possession thereof as a mortgagee. Ram Cheej Pandey, who was impleaded as defendant No. 1 in the suit, is number dead and the appellants, who too were impleaded as defendants, are his legal representatives. Ganga Prasad Rai at the time of the mortgage was the occupancy tenant of the land in dispute. On January 6, 1955 plaintiff-respondents No. 1 to 6 along with Lachhman Singh plaintiff No. 7 filed the present suit for possession of the land in dispute against Rain Cheej Pandey and others on the allegation that Lachhman Singh had transferred all his rights in the land with the companysent and permission of the Zamindar the land-lord in favour of plaintiffs to . It was stated that, as a result of the said transfer, plaintiffs 1 to 6 had become the occupancy tenants of the land in dispute. The plaintiffs 1 to 6 also claimed to have acquired Bhumidari rights of the land by depositing ten times the- amount of the land revenue. According to the plaintiffs, they had a right to redeem the land from the mortgagee, but as the mortgagee was number prepared to give back the land on receipt of the mortgage money, the plain- tiffs were depositing the amount in companyrt. It was also added that plaintiff No. 7 had been joined as a companyplaintiff with plaintiffs 1 to 6 to avoid any dispute. Rai Narain Pandey, son of Ram Cheej Pandey, as well as two minor sons of Raj Narain were impleaded as defendants on the ground that the four defendants were members of the joint Hindu family and, as such, were in possession of the land in suit. The suit was companytested by Raj Narain Pandey. Raj Narain Pandey admitted the mortgage alleged by the plaintiffs. It was, however, averred that plaintiffs 1 to 6 had numberright to redeem the land. The plaintiffs suit was further stated to be barred by limitation as, according to the written statement, the defendants were in adverse possession of the land for more than 12 years. The trial companyrt found that the plaintiffs suit was number barred by time. The plaintiffs were, however, held to have numberright to sue. In the result, the suit was dismissed. On appeal, learned Additional Civil Judge Ballia held that plaintiffs 1 to 6 were number the successors of plaintiff No. It was further observed that the defendants, after the mortgage, had become trespassers in the land and the suit against them was barred by time. When the matter was taken up in second appeal before the High Court, the learned Judge held that in 1946 plaintiffs 1 to 6 had acquired, as a result of agreement with the Zamindar, the same rights which had vested in plaintiff No. 7 before he surrendered those rights. The learned Judge further referred to two Full Bench decisions of Allahabad High Court, namely, Ghassu and Anr. v. Babu Ram and Anr. 1 and Mahabal Singh and Anr. v. Ram Raj and Ors. 2 and in the light of those decisions, held that mortgagee of an occupancy holding by remaining in possession for over 12 years did number extinguish the right of the mortgagor to redeem him and by such possession the mortgagee only prescribed for mortgagee rights. It was fur- ther held that the plaintiffs were entitled to redeem the mortgage and recover possession of the land and that the suit of the plaintiffs was number barred by time. In the result, the plantiffs appeal was accepted, the decisions of the companyrts below were set aside, and a decree for possession of the land in dispute was awarded in the plaintiffs favour. The defendants were held entitled to withdraw the mortgage amount already deposited by the plaintiffs. Mr. Agarwal in appeal before us has submitted on behalf of the defendant-appellants that plantiff-respondents 1 to 6 were number entitled to sue for possession of land on payment of the mortgage money and that their suit was barred by limitation. The above submissions have been companytroverted by Mr. Dikshit on behalf of the plaintiff-respondents, and he has canvassed for the companyrectness of the view taken by the High Court. Before dealing further with the matter, we may refer to some of the statutory provisions which have been referred to by Mr. Agarwal. Sub-section 1 of section 33 of the U.P. Tenancy Act, A.I.R. 31 1944 Allahabad 25. A.I.R. 37 1950 Allahabad 604. 1939 U.P. Act No. 17 of 1939 hereinafter-referred to as the Act of 1939 provides, inter alia, that the interest of an occupancy tenant is number transferable, otherwise than in accordance with the provisions of the Act. According to sub-section 1 of section 44 of that Act, every transfer, other than a sub-lease, made by a tenant in companytravention of the provisions of this Act, shall be void. Section 45 of the above mentioned Act deals with the extinction of tenancy, and according to clause c of the section, the interest of a tenant shall be extinguished subject to the provisions of sections 82 to 88 by surrender. Surrender by a tenant is dealt with in section 62 of the Act. It is provided in the section that a tenant number bound by lease or other agreement for a fixed term to companytinue to occupy the land,- may at the end of any agricultural year surrender his holding, by sending a registered numberice to his landholder intimating his intention to do so and by giving up possession thereof whether such holding is or is number sub-let or mortgaged. Further companyditions are also prescribed in that section, but we are number companycerned with them. Section 180 of the above mentioned Act provides for ejectment of person occupying land without companysent. According to this section, a person taking or retaining possession of a plot of land without the companysent of the person en titled to admit him to occupy such plot and otherwise than in accordance with the provisions of the law for the time being in force, shall be liable to ejectment under this section on the suit of the person so entitled and also to pay damages which may extend to four times the annual rental value calculated in accordance with the sanctioned rates applicable to hereditary tenants. The Fourth Schedule to the Act deals with suits triable by Revenue Courts and prescribes the period of limitation for such suits. Subclause b of clause 2 of item No. 18 of Group B of the said Schedule prescribes a period of two years for filing the suit under section 180 of the Act from the 1st July following the date of the companymencement of this Act, whichever is later. Reference has also been made by Mr. Agarwal to the following passage in the judgment of the High Court At the same time, it is equally clear that the rights acquired by plaintiffs No. 1 to 6 as a result of the companytract of tenancy entered into by the Zamindar in their favour in 1946 were the same rights which vested in the 7th plaintiff before surrender and which had passed on to the Zamindar by act of surrender by the 7th plaintiff. At the time of the settlement in 1946 the defendants were in possession under a void usufructuary mortgage. The surrender by the 7th plaintiff preceding the aforesaid settlement companyld only be a surrender of such Tights as the 7th plaintiff still had at that time and, similarly, the settlement in favour of plaintiffs Nos. 1 to 6 by the Zamindar companyld only be settlement of those very rights. What, therefore, has to be companysidered is what was the nature of the rights which the 7th plaintiff Lachhman Singh retained after executing the void mortgage in 1923 and putting the first defendant in pos- session. It is urged by Mr. Agarwal that though plaintiff No. 7 surrendered his occupancy rights in favour of the landlord, the effect of that was number only the extinction of the occupancy rights but also the extinction of the mortgage in favour of the defendant-appellants. The possession of the land in dispute by the defendant-appellants thereafter was as trespassers. A suit against them, according to Mr. Agarwal, should have been brought in the Revenue Court by the plaintiff-respondents, in whose favour fresh occupancy rights had been created by the land-lord, within two years under section 180 read with item 18 of Fourth Schedule of Act of 1939. As numbersuit was brought within the prescribed time against defendant appellants and as they remained in adverse possession of the land for a period of more than 12 years, the present suit brought by the plaintiff- respondents, it is submitted, was barred by time. We are unable to accede to the, above companytention, because we find that the matter is companyered by two Full Bench decisions of the Allahabad High Court. In a five-judge decision of the Allahabad High Court in the case of Mahabal Singh and Anr. v. Ram Rai and Ors. supra , the companyrt referred to the decision of a three-judge bench of that companyrt in the case of Ghassu and Anr. v. Babu Ram and Anr. supra and found that the following five propositions had been laid down in the earlier case That the usufructuary mortgage of an occupancy holding by a tenant is void and number voidable. That a mortgagor after giving possession to the mortgagee cannot recover possession of the holding without paying the money which he had taken from the mortgagee. That a mortgagee of an occupancy holding by remaining in possession for over 12 years does number extinguish the rights of the mortgagor to redeem him and by such possession the mortgagee only prescribes for mortgagee rights. That it is open to the mortgagor to seek possession of the holding by tendering the companysideration which he had received and he may do so by a redemption suit. The relationship which companyes into existence as a result of the mortgage of an occupancy holding and its possession being transferred to the mortgagee, though number strictly speaking that of a mortgagor and a mortgagee, is analogous to that relationship, and the action which is raised by the mortgagor to recover possession of the holding on payment of the money due to the mortgagee, though number strictly in the nature of a redemption, is analogous to a redemption suit. It was also observed that to take a companytrary view from the law laid down in those five propositions would have the effect of unsettling the law established for a number of years. Mr. Agarwal has number questioned the companyrectness of the above mentioned five propositions and, in our opinion, rightly so. In the matter of the interpretation of a local statute, the view taken by the High Court over a number of years should numbermally be adhered to and number disturb-Id. A different view would number only introduce an element of uncertainty and companyfusion, it would also have the effect of unsettling transactions which might have been entered into on the faith of those decisions. The doctrine of stare decisis can be aptly invoked in such a situation. As observed by Lord Evershed M.R. in the case of Brownsea Haven Properties v. Poole Corpn. 1 , there is well-established authority for the view that a decision of long standing on the basis of which many persons will in the companyrse of time have arranged their affairs should number lightly be disturbed by a superior companyrt number strictly bound itself by the decision. In the light of the above mentioned Full Bench decisions, it cannot, be disputed that the status of the defendant- appellants was analogous to that of mortgagees. It also cannot be disputed that the successor of the original mortgagor would be entitled to recover possession of the mortgaged land from the defendant-appellants on payment of the mortgage money. Mr. Agarwal, however, submits that plaintiff-respondents 1 to 6 are number the successors of Laclihman Singh plaintiff No. 7. It is urged that after the surrender of the occupancy rights by Lachhman Singh, the plaintiff-respondents cannot ask for redemption of the mortgage created by Lachhman Singh. This companytention, in our opinion, is number well founded. The companyy of the companypromise decree dated January 4, 1946/February 2, 1945 has been placed on record, and it would appear therefrom that in a suit brought by the plaintiff-respondents 1 to 6 against the landlords and Lachhman Singh who was described in that suit as Lachhman Rai , the plaintiffs 1 to 6 were accepted to be occupancy tenants of the land in dispute. The 1 1958 Ch. 574 C.A. effect of that decree was that while the occupancy, rights of Lachhman Singh came to an end, those of plaintiff- respondents 1 to 6 came into existence at the same time. As plaintiff-respondents 1 to 6 became the occupancy tenants of the land in dispute, they were, in our opinion, entitled to redeem the land from the mortgagees. The material on record also indicates that plaintiff-respondents 1 to 6 have been declared to be the Bhumidars of the land in dispute. Sanad dated October 5, 1949 declaring them to be Bhumidars of the land was issued on October 5, 1949. As plaintiff respondents 1 to 6 were the occupancy tenants of the land in dispute and as they were declared to be Bhumidars, they had, in our opinion, sufficient interest in the land as clothed them with the right to redeem it from the mortgagees. Clause a of section 91 of the Transfer of Property Act provides, inter alia, that any person other than the mortgagee of the interest sought to be redeemed who has any interest in, or charge upon the property mortgaged or in or upon the right to redeem the same, may institute a suit for redemption of the mortgaged property. The case of the plaintiffs, who were the occupancy tenants and Bhumidars of the land in dispute, is clearly companyered by clause a of section 91 of the Transfer of Property Act. The fact that the present suit has been filed number by the occupancy tenant who mortgaged the property but by others in whom the occupancy rights were subsequently vested would, in our opinion, make numberdifference and would be numberbar to the maintainability of the suit. It is significant in this companytext to observe that plaintiffs 1 to 6 became the occupancy tenants of the same land of which Lachhman Singhs father was the occupancy tenant at the time of the mortgage. It has also been argued by Mr. Agarwal that the suit for possession brought by the plaintiff-respondents was number maintainable in a civil companyrt and companyld only be tried by a revenue companyrt. Apart from the fact that numbersuch plea was taken in the written statement or in the trial companyrt or the first appellate companyrt, we find that the five-judge bench of the Allahabad High Court in the case of Mahabal Singh and Anr. supra has held that such a suit is maintainable in a civil companyrt. We see numbercogent ground to disturb that view. The appeal fails and is dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 1987 to 1988 of 1.969. Appeals by certificate from the judgment and order dated October 22, 1965 of the Allahabad High Court in Income-tax Reference No. 154 of 1957. T. Desai, Alok Kumar Verma and B. P. Singh for the appellant Sen, J. Ramamurthy, B.D. Sharma and R. N. Sachthey for the respondent. The Judgment of the Court was delivered by JAGANMOHAN REDDY, J. These appeals are by certificate against the Judgment of the Allahabad High Court in a reference under S. 21 of the Excess Profits Tax Act, 1940 hereinafter called the Act read with s. 66 2 of the Indian Income-tax Act, 1922. The questions referred were in respect of the two chargeable accounting periods being January 1, 1945 to December 31, 1945 and January 1, 1946 to March 31, 1946 and are given below Whether on the facts and circumstances of this case the amount of Rs. 5,39,057/- was rightly disallowed under rule 12 1 of the Schedule to the Excess Profits Tax Act? Whether on the facts and circumstances of this case the amount of Rs. 1,28,743/- was rightly disallowed under rule 12 1 of Schedule I to the Excess Profits Tax Act? Both these questions were answered in the affirmative. The facts and circumstances of the case on which these answers were given are -The assessee is a public limited companypany hereinafter called the Corporation having several branches and subsidiary companypanies. It has a Board of Directors which looks after its business. The branches of the Company are looked after by mangers who ,ire members of the Board of Directors. It appears that for a long time and even before the Act came into force the companyporation has been remunerating its directors including the Managing Director and branch managers by way of companymission based on a certain fixed percentage of its net audited profits. This companymission was in addition to the directors fees and or stipulated monthly salary. In the case of a branch manager the amount of companymission to be paid was calculated on the profits of the branch of which he was in charge. In the case of others the profits made by the Corporation as a whole were taken into companysideration. The companymission to be paid was either fixed at the time of appointment or by resolution passed subsequently. In so far as the two chargeable accounting periods are companycerned, the position in regard to the payment of the companymission has been set out in the statement of the case but this is number relevant for the purpose of these appeals except to numbere. as we have earlier mentioned, that the companymission was to be calculated with reference to the net audited profits which phrase was clarified by a resolution of the Corporation dated February 24, 1940. That resolution is as follows - Commission. In order to regularise previous Resolutions on the subject of Managerial Commission, the Board resolved that companymission on profits would be payable to the Managing Director and the Branch Managers entitled thereto, on net audited profits, only after depreciation had been allowed for but prior to any allocation or appropriation of such profits including provision for taxation. Though it is number mentioned in the statement of the case we can take judicial numberice of it that the Excess Profits Tax Bill was introduced in the Central Legislative Assembly on January 27, 1940 and after it was passed, received the assent of the Governor-General on April 5, 1940. On July 27, 1940 the phrase including provision for taxation was further clarified by the following resolution - The Board, therefore, resolved that the words including provision for taxation were intended to and did specifically companyer all forms of taxation including the Excess Profits Tax and other like impositions and, therefore, numberdeduction of excess profits tax and other like impositions from the audited profits should be made prior to the calculation of Managerial companymissions. The Board also resolved that this ruling, which companyld only be regarded as fair and reasonable should have effect retrospectively to the companymission paid in respect of the year 1939. In respect of the chargeable accounting period ending December 31, 1945 the Excess Profits Tax Officer had observed in his order dated December 15, 1947 as follows - For reasons stated in the order dated 30-3- 1945 and Rule 12 Schedule I for the chargeable accounting period up to 31-12-1943, 1 hold that, having regard to the requirements of the business and the actual services rendered by the persons companycerned, the companymission allowed to the management and directors is both un- reasonable and unnecessary. Any payment in excess of the agreed proportion of the net profits after deduction of Excess Profits Tax is number justified. The Excess Profits Tax Officer accordingly held that Rs. 11,47,143 for the first chargeable accounting period and Rs. 11,06,693 for the second chargeable accounting period companyld number be allowed and was further of the view that a portion of it was number reasonable and necessary having regard to the requirements of the business and the actual services rendered by the persons companycerned. It was pointed out that the companymission of the nature under companysideration was being paid by the Corporation even before the Act came into force and that such companymission was being allowed in its entirely for purposes of companyputing profits, under s. 10 of the Income-tax Act, 1922 in the two companyresponding assessments made under s. 10 of the Income-tax Act. Though this was so under the Income-tax Act the Excess Profits Tax Officer on the facts of the case and having regard to rule 12 of the Schedule to the Act took the view that since the companymission in the respective chargeable accounting periods were paid out of the profits which companyld number be retained by the Corporation, a portion of the companymission attributable to the Excess Profits Tax Act earned in the peculiar circumstances of a national calamity was number reasonable and necessary within the meaning of the said rule. It was found that for the first chargeable accounting period the Excess profits payable were approximately Rs. 64,36,000/- but if the companymission was to be paid on the net audited profits of Rs. 1.37 crores, the whole excess profits which companyld number be retained by the Corporation for its own use would be taken into account for the payment of the companymission as such be determined the portion to be disallowed was at 8.4 of the said excess profits which will be payable to the State on account of the Exces Profits Tax liability. On this basis the amount worked out was Rs. 5,39,057. Applying the same method for the following accounting chargeable, period ended March 3 1. 1946 he determined the amount as Rs. 1,28,743/-. These two amounts were disallowed in the assessments for the respective chargeable accounting periods. In arriving at these amounts the Excess Profits Tax Officer ignored the terms of appointment and the resolutions and drew support from the orders passed by the Tribunal in respect of the two prior assessments for the accounting periods ended December 31, 1943 and December 31, 1946, against which orders of the Tribunal a reference had earlier been made to the Allahabad High Court. This reference was then pending before it when the subsequent assessments were being dealt with. In the appeals against assessments made for the accounting periods in the instant case, it was admitted on behalf of the Corporation before the Tribunal that there was numbernew material other than what was on record in the, Excess Profits Tax assessment files and the Tribunal files relating to the chargeable accounting periods for the years 1943 and 1944. These files were produced before the Tribunal in the appeals for the assessments in question. The Tribunal however dismissed those appeals following its earlier decision relating to the chargeable accounting periods for 1943 and 1944. Against that order the High Court on a reference under the Act companysidered a similar question, viz. whether the amounts claimed by the Corporation in respect of each of the assessment year was rightly disallowed under rule 12 1 of tile First Schedule to the Act. In the earlier reference for the assessment in respect of the assessment years 1943 and 1944, a Bench of the Allahabad High Court in British India CorPoration Ltd. v. Commr. of E.P.T. 1 companysisting of Bhargava, J. as he was and Mehrotra, J. were of the View that the findings of the Excess Profits Tax Officer that the payments were both number necessary and number reasonable amounted to holding that the previous practice and agreements save numberindication that the companymission had to be paid without deducting the excess profits tax from the net profits and that the payments made were beyond the terms of the agreement. According to that companyrt this was number the basis on which the question of reasonableness and necessity of the payments had to be decided. But what the officer and the Tribunal ought to have decided is the question whether or number these payments were necessary and justified, having regard to the ordinary companymercial practice and companymercial expediency ,and taking into account the services rendered by the persons to whom the payments were made. Bhargava, J. who delivered the judgement of the Bench in arriving at the companyclusion that the disallowance of the amounts was act justified followed a Full Bench judgement of that Court in Shyamlal Pragnarain v. I.T. 2 . In that Full Bench it was observed that what the Excess Profits Tax Officer had to bear in mind is that the amount companyld be disallowed in whole or in part if it was found that it was number reasonable and it was number necessary having regard to the requirements of the business and the actual services rendered by the managers. The question as to the terms of the companytract, it said may have been a 1 33 I.T.R. 826. 2 27 I.T.R. 404. matter of importance as between the employer and the employee but number for the purposes of the determination of the question of reasonableness or necessity either under the Income-tax Act or the Excess Profits Tax Act which had to be judged in the light of the requirements of business and to the exigencies of the business keeping in view ordinary companymercial practice and companymercial expediency. When the Tribunal decided the appeal which is the subject matter of this reference, the decision of the High Court, as we said earlier, had number been rendered and companysequently it did number have the benefit of that decision the High Court in the judgment under appeal however observed - The Full Bench did number discuss whether for disallowing a deduction both unreasonableness and want of necessity are required or either is enough and presumed Presumably from the, fact that both reasonableness and necessity are required for allowing it that both are required. As the question was number expressly raised before and decided by Bhargava and Mehrotra, JJ. in one case and the Full Bench in the other case, the assumption on which they proceeded would number bind us. In our view, these observations are number justified because in both those cases the aspects referred to were certainly kept in view in determining the questions before them. It appears that the Revenue did number appeal against the decision of Bhargava and Mehrotra, JJ. in the case above referred. The Excess Profits Tax Officer had made the assessments basing them on the reasons given in the earlier orders relating to the chargeable accounting years 1943 and 1944 which were referred to in the statement of the case. We also find that the High Court in its earlier judgment was number justified in thinking that the Excess Profits Tax Officer had number applied the requirements of rule 12 of the Schedule to the Act. Rule 12 1 of Schedule I which is relevant is as follows In companyputing the profits of any chargeable accounting period numberdeduction shall be allowed in respect of expenses in excess of the amount which the Excess profits Tax Officer companysiders reasonable and necessary having regard to the requirements of the business and, in the case of directors fees or other payments for services, to the actual services rendered by the person companycerned Provided that numberdisallowance under this rule shall be made by the Excess Profits Tax Officer unless he has obtained the prior authority of the Commissioner of Excess Profits Tax. This rule is de-signed to prevent the dissipation of the excess profits by inflating expenditure which has numberrelation to the requirements of the business. The, test is, whether the expenditure is unreasonable and unnecessary having regard to the requirements of the business and in the case of directors fees or other payments for services to the actual services rendered. There is of companyrse numberreference in this rule to companymercial expediency or companymercial practice in companysidering whether an expenditure is unreasonable and unnecessary having regard to the requirements of the business. But that is another way of saying that all relevant factors must be taken into companysideration by the Excess Profits Tax Officer in company- sidering whether that expenditure is reasonable and necessary. What it means is that the Excess Profits Tax Officer companyld number apply the rule to increase that can be justified on ordinary companymercial principles because an increase in profits may in certain cases be due to increase in the activity of the management or increase in the establishment justifying a companyresponding increase in the expenditure. The Full Bench decision in Shyamlals case came up companysideration by this Court in Ahmedabad Manufacturing Calico Printing Co. v. Commr. of E.P.T. 1 . That was also a case where the question was whether in determining the profits on which the percentage had to be determined for payment of bonus to five of its employees and the companytribution to be made to the provident funds of 5 3 employees, deduction, of depreciation, income-tax and super- tax in respect of first category and deduction of income-tax or excess profits tax in respect of the second category companyld be made before arriving at the profits. The Excess Profits Tax Officer came to the companyclusion that the payments were unnecessarily large and unreasonable having regard to the requirements of the business and without taking up each individual case he held, applying rule 12 that it was number necessary for the assessee companypany for the purpose of its business to calculate the bonus or the companytribution on that basis of net profits before the deduction of excess profits tax. He accordingly disallowed the excess of the payment calculated without deduction of that tax. In upholding the disallowance this Court held that there was material on which the Excess Profits Tax Officer companyld arrive at a finding and on which the Tribunal companyld companyfirm that finding. In that case also the Excess Profits Tax Officer, in the assessment order relating to the chargeable accounting year ending December 31, 1943 gave sufficient reasons for disallowing the amounts which reasons were incorporated by reference in the assessment orders pertaining to the disallowance of the claim in the chargeable accounting years in question. In the earlier order the reasons given were as follows The rates of companymission were fixed long prior to the companymencement of the present war and numberdeduction was admittedly made for the Excess Profits Tax liability in companyputing the net profit of the companyporation for the purpose of calculating companymission payable to directors and management. As a result of war companyditions the profits of the Corporation have gone up tremendously from about Rs. 10 lakhs in the prewar period to about Rs. 2 crores during the relevant chargeable accounting period and the companymission to management on the basis of net profits has risen in the same proportion. Since the Excess Profits Tax, which is intended to prevent the owner of a business from making a large fortune out of what is a national danger, is number deducted out of net profits in calculating companymission, an employee stands to benefit from the national emergency to a greater extent than an employer Walchand Co. Ltd. v. The Hin- dustan Construction Co. Ltd. 12 I.T.R. 104 . it therefore, appears both unnecessary.and unreasonable to pay more than the agreed proportion of the profits after deduction of Excess Profits Tax. In the circumstances, I hold that the increased expenditure under companymission although of a nature which under the provisions of s. 10 of the Income-tax Act, is in itself an allowable deduction, is unreasonable and unnecessary having regard to the requirements of the business and the actual services rendered by the persons companycerned. After giving these reasons he went on to say Having held that the aforesaid payments of companymission are unjustifiable and exceptional the question arises as to what the reasonable amount, having regard to the requirements of the business and the actual services rendered by the persons should be. As mentioned above, any payment in excess of the agreed proportion of the net profits after deduction of Excess Profits Tax is unreasonable and unnecessary. The Excess Profits Tax Officer accordingly companyputed what was the reasonable amount of companymission which should be allowed. We can find very little justification in the criticism that numberreasons have been given by the Excess Profits Tax Officer or the Tribunal for number allowing the entire companymission claimed on the basis of the audited accounts without deducting the taxes paid including the excess profits tax. It is obvious that when huge profits are earned number due to any activity of the managers but due to war situation, the Government is entitled to a certain share of the excess profits companyputed under the Act. Any companymission paid on the excess profits for which the managers or employees made numbersort of companytribution would ex facie be unreasonable and un- necessary and the Excess Profits Tax Officer was perfectly justified in disallowing certain proportion which according to him was unreasonable and unnecessary having regard to the requirements of the business. In this view, the answers rendered by the High Court cannot be disturbed and these appeals are accordingly dismissed with companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 821 and 822 of 1971. Appeals by certificates from the judgment and orders dated July 14, and August 22, 1970 of the Allahabad High Court in Civil Misc. Writ Petitions Nos. 957 and 3784 of 1970. Civil Appeals Nos. 1625 and 2008 of 1971. Appeals by certificates from the judgments and orders dated July 14, 1970 of the Allahabad High Court at Allahabad in Civil Misc. Writ Nos. 953 and 928 of 1970. Som Nath Iyer, R. G. Sharma and Subodh Markendeya, for the appellant in C. As. Nos. 821-822/71 . T. Desai, R. K. Upadhya, P. C. Bhartari, Ravinder Narain, for the appellant, in C. A. No. 1625/71 . C. Chagla, Anil B. Divanji, P. C. Bhartari and Ravinder Narain for the appellants, in C.A. No. 2008/71 . P. Rana and Ravindra Bana, for the respondents in C. As. Nos. 821-822/71 . D. Karkhanis, O. P. Rana and Ravindra Bana, for the respondents in C. A. No. 1625/71 . C. Manchanda, O. P. Rana and Ravindra Bana, for the respondents. in C. A. No. 2008/71 . The Judgment of the, Court was delivered by Hegde, J. These are appeals by certificate. They raise companymon questions of law for decision, and they are directed against a companymon judgment of the Allahabad High Court. The facts of the case lie within a narrow companypass. The appellants are dealers in foodgrains including cereals and pulses especially split or processed foodgrains and dal. The dispute in this case centers round the question whether the Government is companypetent to levy sales-tax on the purchases made by the appellants of split processed foodgrains and dal under the provisions of the United Provinces Sales Tax Act, 1948 as amended by the Uttar Pradesh Sales Tax Act Amendment and Validation Act, 1970 which will hereinafter be referred to as the Act . Under the Sales Tax Act as it originally stood which will -hereinafter be referred to as the principal Act , the purchases of split or processed foodgrains and dal by dealers were sought, to be brought to tax under s. 3-D of the principal Act read with the numberification issued. The validity of the levy was challenged by Tilock Chand Prasan Kumar, the appellant in Civil Appeal NO. 1625 of 1971 in respect of the assessment made on him for the assessment year 1966-67 by assessment order dated June 30, 1968 by means of a writ petition under Art. 226 of the Constitution. The High Court of Allahabad struck down the levy holding that the dal purchased by the petitioner before it companyld number be said to be a companymodity essentially different from the arhar dal purchased by the dal mills and accordingly the purchases effected by the petitioner companyld number be regarded as the first purchases. This decision is reported in 25, T.C. p. 118. Thereafter the Governor of U.P. issued an ordinance known as Uttar Pradesh Sales Tax Amendment and Validation Ordinance, 1970 U.P. Ordinance No. 2 of 1970 adding inter alia Explanation 11 to s. 3-D as well as s. 7 to the principal Act. This ordinance was later on enacted as an Act to which we have already made reference. The provisions of the Amending Act are identical with the provisions in the Ordinance. Though at the time of the institution of the writ petitions from which these appeals arise, the Ordinance had number yet been made into the Act, the Amending Act came into force during the pendency of the writ petitions. Hence we shall refer to the provisions of the Amending Act. Under the principal Act a dealer is defined in s. 2 c as dealer means any person or association of persons carrying on the business of buying or selling goods in Uttar Pradesh, whether for companymission, remuneration or otherwise, and includes any firm or Hindu Joint Family and any society, club or association which sells goods to its members and also includes any department of the State Government or the Central Government which carries on such business and any undertaking engaged in the generation or distribution of electrical energy or any other form of power. Explanation to the section is number relevant for our present purpose . Section 3 of the Act provides for the levy of multi-point tax. The portion of that section which is material for our present purpose reads Subject to the provisions of this Act, every dealer shall, for each assessment year, pay a lax at the rate of two naye paise per rupee on his turnover of such year, which shall be determined in such manner as may be prescribed Section 3-A provides for a single point taxation in respect of sale of certain goods. At present we are only companycerned with s. 3- D 1 . It provides Except as provided in sub-section 2 , there shall be levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in such manner as may be prescribed, of first purchases made by a dealer or through a dealer, acting as a purchasing agent in respect of such goods or class of goods, and at such rates, number exceeding two paise per rupee in the case of foodgrains, including cereals and pulses, and five paise per rupee in the case of other goods and with effect from such date, as may, from time to time, be numberified by the, State Government in this behalf. Explanation 1 to this section is number relevant for our purpose . The numberification issued under s. 3-D of the principal Act on October 1, 1964 Notification No. S. T. 7122/X provided that with effect from October 1, 1964, the turnover of purchases in respect of goods mentioned therein shall be liable to tax under s. 3-D at the rate mentioned Foodgrains 1.5 paise per rupee on first purchase On the basis of s. 3-D read with the numberification, as mentioned earlier, the authorities under the Act sought to bring to tax under the principal Act the first purchases of processed or split foodgrains including dal on the ground that they companystituted a separate item of foodgrains quite independent of the unprocessed or unsplit foodgains. This view, as seen above, was negatived by the High Court. After the decision of the High Court, the principal Act was amended. Under the. Amending Act one more Explanation viz., Explanation 11 was added to s. 3-D. For the purposes of this sub-section, split or processed foodgrains, such as in the form of dal shall be deemed to be different from unsplit or unprocessed foodgrains, and accordingly, numberhing in this sub-section shall be companystrued to prevent the imposition, levy or companylection of the tax in respect of the first purchases of split or processed foodgrains merely because. tax had been im- posed levied or companylected earlier in respect of the first purchases of those foodgrains in their unsplit or unprocessed form. The Amending Act also added a validating provision to the principal Act viz. s. 7. That section reads Notwithstanding any judgment, decree or order of any companyrt or tribunal to the companytrary, every numberification issued or purporting to have been issued under Section 3-A or Section 3-D of the principal Act before the company- mencement of this Act shall be deemed to have been issued under that section as amended by this Act and shall be so interpreted and be deemed to be and always to have been as valid as if the provisions of this Act were in force at all material times and accordingly anything done or any action taken including any order made, proceeding taken, jurisdiction exercised, assessment made, or tax levied, companylected or paid purporting to have been done or taken in pursuance of any such numberification shall be deemed to be, and always to have been, validly and lawfully done or taken. It will be necessary later on to companysider what was the vice that the legislature intended to cure by the Amending Act. The --L498Sup Cl/73 sequence of events itself discloses the purpose of the Ordinance as well as the Amending Act. That apart, the statement of objects and reasons which can be usefully looked into for the purpose of finding the vice that the legislature was trying to provide against reads thus Sections 3-A and 3-D of the U.P. Sales Tax Act, 1948 provide for single point taxation. Under the fondler section the tax is levied on the turnover of sales, while under the latter the tax is levied on the turnover of first purchases. Plain and ornamented glass bangles are subject to tax separately under section 3- Similarly, unsplit and split pulses are separately subject to tax under section 3-D. It has been held by the High Court in one case that tax cannot be levied separately on plain and ornamented glass bangles under section 3-A and in another that tax cannot be levied separately on unsplit and split pulses under section 3-D because in their opinion plain glass bangles are number a companymodity different from ornamented glass bangles and similarly unsplit pulses and split pulses are also number two different companymodities. These judgments have created legal difficulties in the assessment and companylection of tax on the aforesaid companymodities. Besides, the dealers have started applying for the refund of tax already companylected on these companymodities. Ibis will have serious repercussions on the States revenue. Accordingly, it is proposed to amend sections 3-A and 3-D to provide for the levy of tax on the aforesaid companymodities as separate items. It is also proposed to validate the past levy, assessment and companylection of tax on the above companymodities. The remaining part of the statement of objects and reasons is number relevant for our present purpose . The appellants challenged the validity of Explanation 11 of S. 3-D as well as s. 7 introduced by the Amending Act before the High Court of Allahabad in petitions under Art. 226 of the Constitution. They further took the plea that the amendments incorporated were number effective enough to bring to tax the first purchases of split or processed foodgrains and pulses. The High Court rejected these companytentions and dismissed the writ petitions. Thereafter these appeals have been brought after obtaining certificates from the High Court. The validity of the levy in question was challenged on the following grounds That numberfresh levy can be imposed by a retrospective legislation That the legislature cannot in case of legislation of the nature with which we are companycerned, separate into independent companymodities split and unsplit pulses or processed or unprocessed pulses and on that footing seek to impose tax twice over on the same companymodity in respect of the goods liable to be taxed at a single point That the newly added Explanation to s. 3-D read with s. 7 of the Amending Act amounts to an unlawful usurpation of judicial power by the legislature The newly added Explanation II to s. 3-D is violative of Art. 14 of the Constitution There is numberrational basis for separating split or processed pulses from unsplit or unprocessed pulses On a true companystruction of Explanation It to s. 3-D numberfresh charge can be held to have been imposed, No levy of purchase tax can be made without a fresh Notification under s. 3-D read with Explanation 11 showing therein separately foodgrains unsplit or unprocessed as well as foodgrains split or processed and That the power companyferred on the Government under s. 3-D amounts to an excessive delegation of legislative power. and companysequently void. The source of the legislative power to levy sales or purchase tax on goods is Entry 54 of the List II of the Constitution. It is well settled that subject to companystitutional restrictions a power to legislate includes a power to legislate prospectively as well as retrospectively. In this regard legislative power to impose tax also includes within itself the power to tax retrospectively--see The Union of India v. Madan Gopal Kabra 1 M. P. Sundararamier Co. v. The State of Andhra Pradesh and Anr. 2 J. K. Jute Mills Co. Ltd. v. The State of Uttar Pradesh and Anr. Chhotabhai Jethabhai Patel and Co. v. The Union of India and Anr. 4 Sri Ramkrishna Ors. v. The State of Bihar. 5 In the last mentioned case it was specifically decided that where the legislature can make a valid law, it can provide number only for the prospective operation of the material provisions of the said law but it can also provide for the retrospective operation of the said provisions. We see numberforce in the second companytention advanced on behalf of the appellants. As seen earlier the general rule as enunciated in s. 3 is multi point tax sales tax or purchase tax but power 1 1954 S. C. R. 541. 2 1958 S. C. R. 1422. 3 12. S.T.C. 429. 4 1962 Supp, 2 S.C.R. p. 1. 5 1964 1 S.C.R. 897. is companyferred on the Government to select any transaction in respect of such goods or class of goods as the Government may choose to levy a single point sales tax or purchase tax. It is open to the legislature to define the nature of the goods, the sale or purchase of which should be brought to tax. Legislature was number incompetent to separate the processed or split pulses from the unsplit or unprocessed pulses and treat the two as separate and independent goods. In Jagannath and Ors. v. Union of India, 1 question arose for decision whether it was open to the legislature to impose separate excise duty on tobacco leaf as well as on broken leaf of tobacco. This Court overruled the companytention that such a levy was invalid. It head that it was open for the legislature to separate the two items. We see numberbasis for the companytention that the legislature cannot for the purpose of tax under the Act separate the split or processed Pulses from the unsplit or unprocessed. The power of the legislature to specify the nature of the goods the sale or purchase of which, it will bring to tax is very wide. Now companying to point No. 3, there is numberjustification for the companytention that the legislature has usurped any judicial power. The legislature has number purported either directly or by necessary implication to overrule the decisions of the Allahabad High. Court in Tilok Chand Prasan Kumars case supra . On the other hand it. has accepted that decision as companyrect but has sought to remove the basis of that decision by retrospectively changing the law. This Court has pointed out in several cases the distinction between the encroachment on the judicial power and the nullification of the effect of a judicial decision by changing the law retrospectively. The former is outside the companypetence of the legislature but, the latter is within its permissible limits. From the statement of objects and reasons, it appears that in the principal Act, the legislative intent was number clearly brought out. By means of the Amending Act the legislature wanted to make clear its intent. The fourth companytention also appears to be without any basis. It is true that the taxing statutes are number outside the scope of Art. 14 of the Constitution. But the legislature has wide powers of classification in the case of taxing statutes. In Jagannaths case supra , this Court ruled that there was numberunconstitutional discrimination in the imposition of the excise duty on tobacco in the broken leaf form. Therein it was observed that tobacco in the, broken leaf form was capable of being used in the manufacture of bidis while tobacco in the whole leaf form companyld number be so used economically the two forms of tobacco were different by the test of capability of user the tariff is number based either wholly or even primarily by reference to the 1 1962 2 S.C.R. 118. use of tobacco and there was a clear and unambiguous distinction between tobacco the whole leaf form companyered by item 5 and tobacco in the broken leaf form companyered by item 6 which had a reasonable relation to the object intended by the imposition of the tariff. In Khandige Sham Bhat and Ors. v. The Agricultural Income Tax Officer, 1 this Court laid down the tests to find out whether there are discriminatory provisions in a taxing statute. Therein this Court observed that in order to judge whether a law was discriminatory what had primarily to be looked into was number its phraseology but its real effect. If there was equality and uniformity within each group, the law companyld pot be discriminatory, though due to fortuitous circumstances in a peculiar situation some included in a class might get some advantage over others, so long as they were number sought out for special treatment. Although taxation laws companyld be numberexception to this rule, the companyrts would, in view of the inherent companyplexity of fiscal adjustment of diverse elements, permit a larger discretion to the legislature in the matter of classification so long as there was numbertransgression of the fundamental principles underlying the doctrine of classification. The power of the legislature to classify must necessarily be wide and flexible so as to enable it to adjust its system of taxation in all proper and reasonable ways. It must be numbericed that generally speaking the primary purpose of the levy of all taxes is to raise funds for pub- lie good. Which person should be taxed, what transaction should be taxed or what goods should be taxed, depends upon social, economic and administrative companysiderations. In a democratic set up it is for the legislature to decide what economic or social policy it should pursue or what administrative companysideration it should bear in mind. The classification between the processed or split pulses and un- processed or unsplit pulses is a reasonable classification. It is based on the use to which those goods can, be put. Hence, in our opinion, the impugned classification is number violative of. Art. 14. A feeble attempt was made to show that the retrospective levy made under the Act is violative of Art. 19 1 f and But we see numbersubstance in that companytention. As seen earlier, the amendment of the Act was necessitated because of the legislatures failure to bring out clearly in the principal Act its intention to separate the processed or split pulses from the, unsplit or unprocessed pulses. Further the retrospective amendment became necessary as otherwise the State would have to refund large sum of money. The companytention that the retrospective levy did number afford any opportunity to the dealers to pass on the tax payable to the companysumers, has number much validity. The tax is levied on the dealer 1 1963 3 S.C.R. 809. the fact that he is allowed to pass on the tax to the companysumers or he is generally in position to pass on the same to the companysumer has numberrelevance when we companysider the legislative companypetence. It was next urged that on a true companytribution of Explanation II to s. 3-D, numbercharge can be said to have been created on the purchases of split or processed pulses. It was firstly companytended that an Explanation cannot extend the scope of the main section it can only explain that section. In companystruing a statutory provision, the first and the foremost rule of companystruction is the literary companystruction. All that we have to see at the very outset is what does that provision say ? If the provision is unambiguous and if from that provision, the legislative intent is clear, we need number call into aid the other rules of companystruction of statutes. The other rules of companystruction of statutes are called into aid only when the legislative intention is number clear. Ordinarily a proviso to a section is intended to take out a part of the main section for special treatment. It is number expected to enlarge the scope of the main section-. But cases have arisen in which this Court has held that despite the fact that a provision is called proviso, it is really a separate provision and the socalled proviso has substantially altered the main section. In Commissioner of Income-tax, Bombay, City. Bombay v. Bipinchandra Maganlal Co. Ltd., Bombay, 1 this Court held that by the fiction in S. 10 2 vii second proviso read with S. 2 6C of the Indian Income-tax Act, 1922 what is really number income is, for the purpose of companyputation of assessable income, made, taxable income. In State of Rajasthan v. Leela Jain 2 this Court observed The primary purpose of the proviso number under companysideration is, it is apparent, to provide a substitute or an alternative remedy to that which is prohibited by the main part of S. 4 1 . There is, therefore, numberquestion of the proviso carving out any portion out of the area companyered by the main part and leaving the other part unaffected. What we have stated earlier should suffice to establish that the proviso- number before us is really number a proviso in the accepted sense but an independent legislative provision by which to a remedy which is prohibited by the main part of the section, an alternative is provided It is further obvious to us that the proviso is number companyxtensive with but companyers a field wider than the main part of S. 4 1 . In Bihta Co-operative Development Cane Marketing Union Ltd. and Anr. v. Bank of Bihar and Ors. 3 this Court was called upon to companysider the Explanation to s. 48 1 of the Bihar and 1 1961 2 S.C.R.493. 2 1965 1 S.CR., 276 3 1967 1 S.C.R. 848. Orissa Co-operative Societies Act 1935. Therein this Court observed The question then arises whether the first Explanation to the section widens the scope of sub-s. 1 of s. 48 so as to include claims by registered societies against number-members even if the same are number companyered by clause c . On the basis of the language of the Explanation this Court held that it did number widen the scope of clause c . But from what has been said in the case, it is clear that if on a true reading of an Explanation it appears that it has widened the scope of the main section, effect must be given to the legislative intent numberwithstanding the fact that the legislature named that provision as an Explanation. In all these matters the companyrts have to find out the true intention of the legislature. We are unable to accept the companytention that Explanation II to s. 3-D did number widen. the scope of s. 3-D. Section 3-D s it originally stood dealt with foodgrains and pulses. It did number treat the unprocessed or unsplit foodgrains and pulses as a separate item but because of Explanation 11, we have number to read the expression foodgrains in s. 3-D as companytaining two separate items viz. 1 foodgrains unprocessed or unsplit and 2 foodgrains processed or split. It is true that Explanation 11 is number very happily worded but the intention of the legislature is clear and unambiguous. The newly added Explanation brings to tax with retrospective effect the split or processed foodgrains as well. We next companye to the companytention that numberlevy of purchase tax can be made on split or unprocessed pulses without a fresh numberification under S. 3-D read with Explanation 11 showing therein separately foodgrains unsplit or unprocessed as well as foodgrains split or processed. As seen earlier that the numberification issued merely refers to foodgrains. That numberification does number classify foodgrains into two separate categories-processed or split and unprocessed or unsplit. Therefore we were told that numbertax can be levied on processed or split foodgrains on the basis of that numberification. This companytention cannot be accepted as companyrect. The numberification in question was issued under S. 3-D, Section 3-D refers to foodgrains but because of Explanation 11 to that section, we have number to read the expression foodgrains as companytaining two different items, processed or split foodgrains and unprocessed or unsplit foodgrains. Consequently while reading the expression foodgrains in the numberification also, we must adopt the same approach. This companyclusion is also obvious from S. 7. If the legislature had number retrospectively validated the assessments made on the first purchases of split or processed foodgrain. what did s. 7 seek to achieve ? That section says in plain words that number- withstanding any judgment, decree or order of any companyrt or tribunal to the companytrary, every numberification issued or purporting to have been issued under s. 3-D of the principal Act. before the companymencement of the Amending Act shall be deemed to have been issued under that section as amended by the Amending Act and shall be so interpreted and be deemed to be and always to. have been as valid as if the provisions of the amending Act were in force at all material times and accordingly, anything done or any action taken including any order made, proceedings taken, jurisdiction exercised, assessment made, or tax levied, companylected or paid, purporting to have, been done or taken in pursuance of any such numberification shall be deemed to be, and always to have been validly and lawfully done or taken. We asked the learned Counsel appearing for the appellants to let us know the field in which S. 7 can be said to operate. Their answer was that though the legislature intended to validate the assessments made on the first purchases of the split or processed dal, it failed to achieve that object because of the defective phraseology employed in Explanation 11 to s. 3-D and S. 7 of the Amending Act. In other words their submission was that S. 7 has become otios. It was urged on behalf of the appellants that a taxing provision will have to be strictly interpreted and in finding out the intention of the legislature in the matter of imposing tax, we cannot travel beyond the words of the section. There is numberdoubt that a taxing provision has to be strictly interpreted. If any legislature intends to impose any tax, that intention must be made clear by the language employed in the statute but that does number mean that the provision in a taxing statute should number be read reasonably. The companytention that we should ignore S. 7 of the Amending Act is a companytention difficult of acceptance. Dealing with a similar companytention Venkatarama Ayyar J. speaking for the Court in J. K. Jute Mills case supra observed at p. 435 The object of the legislation as stated in the long title and in the preamble to the Act was to validate the impugned numberification in relation to the amended section. Schedule B to the Act expressly mentions that numberifica- tion. And if we are number to accede to the, companytention of the petitioner, we must hold that though the legislature set about avowedly to validate the numberification dated March 31, 1956, it failed to achieve that object. A companystruction which will lead to such a result must, if that is possible, be avoided. We have earlier companye to the companyclusion that because Explanation II to S. 3-D the, expression foodgrains including pulses in s. 3-D should be read as including two different items i.e., 1 unsplit or unprocessed foodgrains including pulses and 2 split or processed foodgrains including pulses. Consequently the expression foodgrains in the numberification will also have to be read in the same manner. This, in our opinion, is the reasonable way of reading the numberification in the light of s. 3-D, Explanation 11 to that section and s. 7 of the Act. The only remaining companytention is that the delegation made to the executive under s. 3-D is an excessive delegation. It is true that the legislature cannot delegate its legislative functions to any other body-. But subject to, that qualification, it is permissible for the legislature to delegate the power to select the persons on whom the tax is to be levied or the goods or the transactions on which the tax is to be lievied. In the Act, under s. 3 the legislature has sought to impose multi-point tax on all sales and purchases. After having done that it has given power to the executive, a high authority and which is presumed to companymand the majority support in the legislature, to select for special treatment dealings in certain class of goods. In the very nature of things, it is impossible for the legislature to enumerate goods, dealings in which sales tax or purchase, tax should be imposed. It is also impossible for the legislature to select the goods which should be subjected to a single point sales or purchase tax. Before making such selections several aspects such as the impact of the levy on the society, economic companysequences and the administrative companyvenience will have to be companysidered. These factors may change from time to time. Hence in the very nature of things, these details have got to be left to the executive. In Pt. Banarsi Das Bhanot and Ors. v. The State of Madhya Pradesh and Ors. 1 the question arose whether it was permissible for the legislature to empower the executive to amend the Schedule relating to exemptions. This Court by majority answered that question in the affirmative.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 252 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. K. Gambhir, for the petitioner amicus curiae Gobind Mukhoty and G. S. Chatterjee, for the, respondent. The Judgment of the Court was delivered by DUA, J. This petition for a writ in the nature of habeas companypus, by Manu Bhusan Roy Pradhan has been forwarded to this Court by the Superintendent, Dum Dum Central Jail, West Bengal. Pursuant to the order of detention passed by the District Magistrate, Jalpaiguri, on August 21, 1971 in exercise of the powers companyferred on him by S. 9 read with sub-s. 2 of S. 3 of the Maintenance of Internal Security Act, 26 of 1971 hereinafter called the Act with a view to preventing the petitioner from acting in any nianner prejudicial to the maintenance of public order, he was arrested on November 11, 1971. The grounds of detention served on the petitioner at the time of his arrest read On 16-4-71 at about 20.00 hours you along with others companymitted a murderous assault on Shri Bulo Das Gupta on the road in front of the office of Mahila Samity, Dhupguri, Police Station Dhupguri, District Jalpaiguri causing severe injuries on his person. Shri Das Gupta subsequently died in hospital. As a result of this murder companymitted by you people of the locality became highly terrorised and the public peace was greatly disturbed. On 19-7-1971 at about 19.30 hours you along with others forcibly entered into Dhupguri High School, Police Station Dhupguri, District Jalpaiguri and set fire to the school buildings causing irreparable loss to the institution in particular and the people in general. you set fire to the school with the ulterior object of causing dislocation in the present system of education and to companypel the school authorities to close down the same. As a result of the fire set by you, the teachers and the local people became panic-stricken and the public peace was greatly disturbed. The fact of making the detention order was reported to the State Government on August 23, 1971. It was approved by the said Government on August 31, 1971 the same day this fact was reported to the Central Government. On December 9, 1971 the case was placed before the, Advisory Board which gave its opinion as per its report dated January 18, 1972 that there was sufficient cause for the petitioners detention. The State Government companyfirmed this order on February 1, 1972 and this fact was reported to the Central Government on February 3, 1972. The petitioners representation was received by the State Government on December 11, 1971. But it was companysidered on January 14, 1972. In the companynter-affidavit this delay has been explained in these words due to influx of refugees as well as the Pakistan aggression at that time, most of the officers of the Home Department of the State Government were very busy with serious problems which threatened and faced the companyntry at that time, and as such the said representation companyld number be companysidered earlier. Moreover I further state that delay was also caused due to abrupt increase in number of the detention cases during that time as there was spate of anti-social activities by Naxalities and other political extremists in the State. Before us Shri S. K. Gambhir, the learned companynsel appearing as amicus curiae submitted that the petitioner, who is only 17 years old and is studying in the Xth class in Dhupguri High School, was arrested on August 5, 1971 in companynection with six cases. He was bailed out on November 10, 1971 but was re-arrested soon thereafter. It was further submitted that ground number I stated in, the order of detention is vague and has also numberrelevance to the maintenance of public order with the result that the petitioners detention must be held to be bad in law for it is number possible to say how far this ground influenced the decision of the authority companycerned in making the impugned order of detention. On behalf of the State it was companytended that the petitioner was found to be absconding when the detention order was made and that lie was arrested on November 11, 1971. Reliance for this submission was placed on the companynter-affidavit. It is numbere-worthy that in that companynter-affidavit, which was affirmed on August 24, 1972 by the Deputy Secretary, Home Special Department ofGovernment of West Bengal, numberhing, has been stated in reply to the averments made in the petitioners representation dated December 4/6, 1971 addressed from Jail to the Assistant Secretary Home Special Department, Government of West Bengal regarding the petitioners arrest in six cases of which specific numbers were stated number is there any positive reply to the averment that he had been bailed out on November 10, 1971. Surprisingly enough numberexplanation was suggested for this omission even at the Bar during the companyrse of arguments in this Court. The respondents learned companynsel relied on the averments made in para 7 of the companynter-affidavit. It is stated therein The detenu-petitioner is a staunch supporter of C.P.I. ML party and is active member of the Actionsquad of that party. It appears that the petitioner along with his associates on 16-4-71 at about 20.00 hours companymitted murderous assault on Shri Bulo Das Gupta on the road in front of Mahila Samity P. S. Dhupguri in companysequence whereof he died. It further appears that the detenu-petitioner along with others forcibly entered Dhupguri High School on 19-7-71 and set fire to the school buildings causing substantial damages with ulterior object of causing dislocation in the present system of education. The aforesaid activities of the petitioner causes panic companymotion amongst the members of the general public as well as the teachers of the said institutes and disturbed public order and so the petitioner was detained under the said Act. It was companytended that this averment brings the petitioners case within the purview of S. 3 1 and 2 of the Act even though in the grounds supplied to the detenu there was numberreference to his being a staunch supporter of C.P.I. ML party and to his being an active member of the Action-squad of that party. In our view, ground number 1 which does number mention the names details of the others along with whom the petitioner is alleged to have companymitted the assault, only refers to an assault on an individual named Bulo Das Gupta on April 16, 1971 which prima facie appears to raise only a law and order problem. in Arun Ghosh v. State of West Bengal 1 several instances of assaults were stated in the grounds of detention. Hidayatullah C.J. speaking for the Court observed in that case The submission of the companynsel is that these are stray acts directed against individuals and are number subversive of public order and therefore the detention on the ostensible ground of preventing him from acting in a manner prejudicial to public order was number justified. In support of this submission reference is made to three cases, of this Court Dr. Ram Manohar Lohia v. State of Bihar 2 Pushkar Mukherjee Ors. v. State of West Bengal 3 and Shyamal Chakraborty v. The Commissioner of Police Calcutta Anr. 4 . In Dr. Ram 1 1970 3 S.C.R. 288. 2 1966 1 S.C.R. 709. 3 1969 2 S.C.R. 635. 4 1970 1 S.C.R. 762. Manohar Lohias case this Court pointed out the difference between maintenance of law and order and its disturbance and the maintenance of public order and its disturbance. Public order was said to embrace more of the companymunity than law and order. Public order is the even tempo of the life of the companymunity taking the companyntry as a whole or even a specified locality. Disturbance of public order is to be distinguished from acts directed against-individuals which do number disturb the society to the extent of causing a general disturbance of public tranquillity. It is the degree of disturbance and its effect upon the life of the companymunity in alocality which determines whether the disturbance amounts only to a breach of law and order. Take for instance, a man stabs another. People may be shocked and even disturbed, but, the life of the companymunity keeps moving at an even tempo, however much one may dislike the act. Take another case of a town where there is companymunal tension. A man stabs a member of the other companymunity. This is an act of a very different sort. Its implications are deeper and it affects the even tempo of life and public order is jeopardized because the reper- cussions of the act embrace large sections of the companymunity and incite them to make further breaches if the law and order and to subvert the public order. An act by itself is number determinant of its, own gravity. In its quality it may number differ from another but in its potentiality it may be very different. The learned Chief Justice, after referring to the, lines of demarcation drawn by Ramaswami J., in W.P. 179 of 1968 between serious and aggravated forms of breaches of public order which affect the companymunity or endanger the public interest at large and minor breaches of peace which do number affect the public at large, and after numbering the analogy drawn by Ramaswami J., between public and private crimes, cautioned against that analogy being pushed too far, observing, that a large number of acts directed against persons or individuals may total up into a breach of public order. After referring to Dr. Ram Manohar Lohias case supra the learned Chief Justice observed It is always a question of degree of the harm and its effect upon the companymunity. The question to ask is Does it lead to disturbance of the current of life of the companymunity so as to amount to a disturbance of the public order or does it affect merely an individual leaving the tranquillity of the society undisturbed ? This question has to be faced in every case on facts. There is numberformula by which one case can be distinguished from another. This view was reaffirmed in Nagendra Nath Mondal v. The State ,of West Bengal 1 , Sudhir Kumar Saha v. Commissioner of Police Calcutta 2 , Sk. Kader v. The State of West Bengal 3 , Kanu Biswas v. State of West Bengal 4 , Kishori Mohan v. State ,of West Bengal 5 and Amiya Kumar Karmakar State of West Bengal 6 . Ground number 1 in the case before us merely mentions mur- derous assault by the petitioner on Bulo Das Gupta. It shows neither the nature of the weapon used number the nature or extent of the injuries inflicted, number does it disclose as to how long after the assault the injured person died. The motive or the purpose of the assault is also number stated. This kind of a solitary assault on one individual, which may well be equated with an ordinary murder which is number an uncommon occurrence, can hardly be said to disturb public peace or place public order in jeopardy, so as to bring the case within the purview of, the Act. It can only raise a law and order problem and numbermore its impact on the society as a whole cannot be companysidered to be so extensive, widespread and forceful as to disturb the numbermal life of the companymunity thereby rudely shaking. the balanced tempo of the orderly life of the ,general public. This ground is, therefore, number at an relevant for sustaining the order of detention for preventing the petitioner from acting in a manner prejudicial to, the maintenance of public order. Ground number 2, however, is quite germane to the problem of maintenance of public order. But the question arises whether in theabsence of ground number 1 which, in our view, Ts wholly irrelevant, the detaining authority would have felt satisfied on the basis of the solitary ground number 2 alone to make the impugned order. Can it be said that ground number 1 is of a companyparatively unessential nature so as number to have meaningfully influenced the decision of the detaining authority. Similar problem has faced this Court on a number of occasions and the decision has generally gone in favour of the detenu. This Court in Dr. Ram Krishan Bhardwaj v. The State of Delhi 7 laid down that the requirement that the grounds must number be vague must be satisfied with respect to each of the grounds. In Dwarka Das Bhatia v. The State of Jammu Kashmir 8 the principle deduced from the earlier decisions of this Court and also from the decision of the Federal Court in Keshav Talpade The King Emperor 9 was stated thus A.T.R. 1972 S.C. 665. 2 1970 3 S.C.R. 360. A.I.R. 1972 S.C. 1647. 4 A.T.R. 1972 S.C. 1656. A.T.R. 1972 S.C. 1749. 6 W.P.190/1972 dated/31-7-1972. 7 1953 S.C.R. 708. 8 1956 S.C.R. 948. 9 1968 2 S.C.R. 505. .lm15 Where power is vested in a statutory authority to deprive the liberty of a subject on its subjective satisfaction with reference to specified matters, if that satisfaction is stated to be based on a number of grounds or for a variety of reasons, all taken together, and if some out of them are found to be number-existent or irrelevant the very exercise of that power is bad. That is so because the matter being one for subjective satisfaction, it must be properly based on all the reasons on which it purports to be based. If some out of them are found to be numberexistent or irrelevant, the Court cannot predicate what the subjective satisfaction of the said authority would have been on the exclusion of those grounds or reasons. To uphold the validity of such an order in spite of the invalidity of some of the reasons or grounds would be to substitute the objective standards of the Court for the subjective satisfaction of the statutory authority. In applying these principles however the Court must be satisfied that the vague or irrelevant grounds are such as, if excluded, might reasonably have affected the subjective satisfaction of the appropriate authority. It is number merely because some ground or reason of a companyparatively unessential nature is defective that such an order based on subjective satisfaction can be held to be invalid. The Court while anxious to safeguard the personal liberty of the individual will number lightly interfere with such orders. It is in the light of these principles that the validity of the impugned order has to be judged. In Rameshwar Lal v. State of Bihar 1 it was observed Since the detenu is number placed before a Magistrate and has only a right of being supplied the grounds of detention with a view to his making a representation to the Advisory Board the grounds must number be vague or indefinite and must afford a real opportunity to make a representation against the detention. Similarly, if a vital ground is shown to be number- existing so that it companyld number have and ought number to have, played a part in the material for companysideration, the companyrt may attach some importance to this fact. In Motilal Jain v. State of Bihar 2 , a decision by a Bench of six Judges, after reviewing the earlier decisions, this Court expressed its view thus 1 1943 F.C.R. 88. 2 1968 3 S.C.R. 587. The defects numbericed in the two grounds mentioned above are sufficient to vitiate the order of detention impugned in these proceedings as it number possible to- hold that those grounds companyld number have influenced the decision of the detaining authority. Individual liberty is a cherished right, one of the most valuable fundamental rights guaranteed by our Constitution to the citizens of this companyntry. If that right is invaded, excepting strictly in accordance with law, the aggrieved party is entitled to appeal to the judicial power of the State for relief. We are number unaware of the fact that the interest of the society is numberless important than that of the individual. Our Constitution has made provision for safeguarding the interests of the society. Its provisions harmonise the liberty of the individual with social interest. The authorities have to act solely on the basis of those provisions. They cannot deal with the liberty of the individual in a casual manner, as has been done in this case. Such an approach does number advance the true social interest. Continued indifference to individual liberty is bound to erode the structure of our democratic society. In the case before us there are only two grounds on which the detention order is based. One of them which relates to an occurrence of April, 1971 has numberrelevance or relation to the disturbance of public order. The other ground relates to an occurrence of July, 1971. This ground is numberdoubt germane to the object of maintenance of public order but we are satisfied that the first ground is number of an unessential nature and in our view its exclusion from companysideration might reasonably have affected the subjective satisfaction of the authority making the impugned order of detention. This was the test laid down in Bhatias case supra and approved in Motilal Jain supra . As has often been em- phasised by this Court the Act encroaches on the highly cherished right of personal liberty by companyferring on the executive extraordinary power to detain persons without trial by companying to subjective decisions. The detaining authority in exercising this power must act strictly within the limitations this Act places on its power so that the guarantee of personal liberty is number imperiled beyond what the Constitution and the law strictly provide. The limited fight of redress companyferred on the detenu under the law deserves to be companystrued with permissible liberality companysistently with the provisions of the Act and the companystitutional guarantee. We find that the impugned order in this case has been made without paying due heed to the provisions of the Act and the order is clearly beyond the statutory scope. The impugned order must, therefore, be struck down as outside the Act. The petitioner was released by us by means of a short order on October 4, 1972.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 173 of 1971. Appeal, by special leave from the judgment and order dated February 26, 1971 of the Allahabad High Court at Allahabad in Criminal Appeal No. 1229 of 1970 and Reference No. 96 of 1970. K. Garg, A. K. Gupta, Indira Jai Singh, V. J. Francis and R. S. Sharma for the appellant. P. Rana for the respondent. V. Rangam and A. Subhashini for the State of Tamil Nadu. N. Bagra and M. Veerappa for the State of Mysore., S. Nariman, Additional Solicitor General of India, P. Parameshwara Rao and B. D. Sharma for the Attorney General. Bakshi Sita Ram and R. N. Sachthey for the Advocate General, Himachal Pradesh. K. Gupta for intervener Shyam Narain . K. Jain and R. K. Garg for Interveners Duraipandi Thevar and Krishna Thevar . The Judgment of the Court was delivered by PALEKAR, J. The appellant Jagmohan Singh has been companyvinced under section 302-IPC for the murder of one Chhotey Singh and sentenced to death by the learned Sessions Judge, Shahjahanpur. The companyviction and the sentence are companyfirmed by the Allahabad High Court. on the appellant companying to this Court by special leave, special leave was granted limited to the question of sentence only. The short facts of the case are that some six or seven years before the present offence, one Shivraj Singh, father of Jagbir Singh, a companysin of the appellant, was murdered. The deceased Chhotey Singh was charged for that murder but was eventually acquitted by the High Court. As a result of that murder, there was ill-feeling between Chhotey Singh, on the one hand, and the appellant and Jagbir Singh, on the other. Both of them were minors at the time of the murder of Shivraj Singh. But by number they had grown up and it is plain from the evidence that Chhotey Singhs murder was the result of this ill-feeling. Chhotey Singh was murdered on September 10, 1969 at about 5.00 P.M. A day earlier, there was a quarrel between Jagmohan Singh and Jagbir Singh, on the one hand, and Chhotey Singh, on the other, on the question of a right to irrigate their fields. However, the dispute was settled by persons who reached the spot at the time and numberhing untoward happened. Next day, however, the appellant armed with a companyntry made pistol and Jagbir Singh armed with a lathi companycealed themselves in a bajra field and emerged from the same as Chhotey Singh passed by to go to his field for fetching fodder. The appellant asked Chhotey Singh to stop so that the matter between them companyld be settled once for all. Naturally Chhotey Singh tried to run away but he was chased by the appellant and shot in the back. Chhotey Singh fell down after running some distance and died. That is how the murder was companymitted. On the facts and circumstances of the case, the learned Ses- sions Judge held that the appellant deserved the extreme penalty. The High Court, while companyfirming the death sentence, observed that there were numberextenuating circumstances and the sentence of death awarded to the appellant was just and proper. The question is whether this Court should interfere with the sentence. Under section 367 5 of the Criminal Procedure Code as it stood before its amendment by Act 26 of 1955 the numbermal rule was to sentence the accused to death on a companyviction for murder and to impose the lesser sentence of imprisonment for life for reasons to be recorded in writing. That provision is number deleted and it is left to the judicial discretion of the companyrt whether the death sentence or the lesser sentence should be imposed. That discretion has been exercised companycurrently by the Trial Court and the High Court and the question is whether there are sufficient reasons for this companyrt to interfere with that discretion. As pointed out by this Court in Ram Narain and others v. The State of U.P. 1 this Court numbermally does number interfere with the discretion exercised by the High Court on the question of sentence un- less the High Court has disregarded recognised principles in imposing the sentence and there has been a failure of justice. It. cannot be said on the facts of this case that there has been any breach of the principles governing the matter of sentence. The appellant had armed himself with a gun and was lying in wait for the victim to pass. There was numberimmediate cause. The murder was entirely motivated by ill-feelings nurtured for years. The offence was pre- meditated. On seeing the appellant, Chhotey Singh started running away, but he was chased and done to death. In these circumstances, it can hardly be said that the High Court did number exercise its discretion properly. We are, therefore, number inclined to interfere with the sentence imposed by the High Court. Mr. Garg appearing on behalf of the appellant however, raised the question of companystitutional impermissibility of the death sentence for murder, and we have to deal with the question at some length. In the first place he companytended, the death sentence puts an end to all fundamental rights guaranteed under clauses a to g of sub-clause 1 of Article 19 and, therefore, the law with regard to capital sentence is unreasonable and number in the interest of the general public. Secondly,, he companytended, the discretion invested in the Judges to impose capital punishment is number based on any standards or policy required by the Legislature for imposing capital punishment in preference to imprisonment for, life. In his submission, this was a stark abdication of essentials legislative function, and, therefore, section 302-IPC is vitiated by the vice of excessive delegation of essential legislative function. Thirdly, he companytended, the uncontrolled and unguided discretion in the Judges to impose capital punishment or imprisonment for life is hit by Article 14 of the Constitution. because two persons found guilty of murder on similar facts are liable to be treated differently--one forfeiting his life and the other suffering merely a sentence of life imprisonment. Lastly it was companytended that the provisions of the law do number provide a procedure for trial of factors and circumstances crucial for making the choice between the capital penalty and imprisonment for life. The trial under the Criminal Procedure Code is limited to the question of guilt. In the absence of any procedure established by law in the matter of sentence, the protection given by Article 21 of the Constitution was violated and hence for that reason also the sentence of death is unconstitutional. The first submission is based on the provisions of Article 19 of the Constitution. That Article does number directly deal with the freedom to live. It deals with 7 freedoms like freedom of speech ,and expression, freedom to assemble peaceably and without arms etc., but number directly with the freedom to live. It is, however, companytended that freedom to live is basic to all the several freedoms and since the enjoyment of those seven freedoms is impossible without companyceding freedom to live, the latter cannot be denied by any land unless such law is reasonable and is required in general public interest. It was, therefore, companytended that, unless it was shown that the sentence of death for murder passed the test of reasonableness and general public interest, it would number be a valid law. We will assume for the purposes of the present argument that the right to live is basic to the freedoms mentioned in Article 19 and that numberlaw can deprive the life of a citizen unless it is reasonable and in the public interest. The question, therefore, for our companysideration is whether the law, namely, section 302-IPC which prescribes the sentence of death for murder passes the above test. In this companynection it would be proper to recall the observations of Patanjali Sastri, CJ in State of Madras v. G. Row 1 at page 607 It is important in this companytext to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and numberabstract standard. or- general pattern, of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed the underlying purpose of the restrictions imposed. the extent and urgency of the evil sought to be remedied thereby. the disproportion of the imposition, the prevailing companyditions at the time. should all enter into the judicial verdict. In evaluating such elusive factors and forming their own companyception of what is reasonable, in all the circumstances of a given case, it 1 1952 S.C.R. 597. is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part, and the limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility and self-restraint and the sobering reflection that the Constitution is meant number only for people of their way of thinking but for all, and that the majority of the elected representatives of the people have, in authorising the imposition of the restrictions, companysidered them to be reasonable. The responsibility of Judges in that reject is the greater, since the question as to whether capital sentence for murder is appropriate in modern times has raised serious companytroversy the world over, sometimes, with emotional overtones. It is, therefore, essential that we approach this companystitutional question with objectivity and a proper measure of self restraint. The arguments advanced by Mr. Garg against death penalty per se were practically similar to those which were addressed recently to the Supreme Court of America in the case of Furman v. State of Georgia Nos. 69-5003, 619-5030 and 69- 5031 decided on June 29, 1972 and obtained the assent of two Judges, Mr. Justice Brennan and Mr. Justice Marshall. In that case the Judges were invited to reject capital punishment on the ground that it violated the Eighth Amendment which forbade cruel and unusual punishments. Brennan, J. accepted the validity of the challenge in these words If a punishment is unusually severe, if there is a strong probability that it is inflicted arbitrarily, if it is substantially rejected by companytemporary justice and if there is numberreason to believe that it serves any judicial purpose more effectively than some less severe punishment, then the due infliction of that punishment violates the companymand of the clause that the State may number inflict inhuman and uncivilized punishments upon those companyvicted of crimes. Marshall, J. observed as follows There is but one companyclusion that can be drawn from all of this-i.e., the death penalty is an excessive and unnecessary, punishment which violates the Eighth Amendment. The statistical evidence is number companyvincing beyond all doubt, but, it is persuasive. It is number improper at this point to take judicial numberice of the fact that for more than 200 years men have labored to demonstrate that capital punishment serves numberpurpose that life imprisonment companyld number serve equally as well. And they have done so with great success. Little if any evidence had been adduced to prove the companytrary. The point has number been reached at which deference to the legislatures is tantamount to abdication of our judicial roles as factfinders, judges, and ultimate arbiters of the companystitution. We know that at some point the presumption of companystitutionality accorded legislative acts gives way to a realistic assessment of those acts. This point companyes when there is sufficient evidence available so that Judges can determine number whether the legislature acted wisely, but whether it had any rational basis whatsoever for acting. We have this evidence before us number. There is numberrational basis for companycluding that capital punishment is number excessive. It therefore violates the Eighth Amendment. In another place he observed I believe that the great mass of citizens would companyclude on the basis of the material already companysidered that the death penalty is immoral and therefore unconstitutional. The arguments advanced by Mr. Garg were intended to persuade us to companye to the above companyclusion on the abstract question as to whether death penalty for murder was companystitutionally permissible. It is, however, to be numbered in the above case of Furman v. State of Georgia that though the learned Judges by a majority of 5 to 4 set aside the sentences of death with which they were companycerned, it was only Brennan and Marshall, JJ. who were prepared to outlaw capital punishment on the ground that it was an anachronism, degrading to human dignity and unnecessary in modern life. The other three Judges namely Mr. Justice Douglas, Mr. Justice Stewart and Mr. Justice White who formed the majority along with Brennan and Marshall, JJ. did number take the view that the Eighth Amendment prohibited capital punishment for all crimes and under all circumstances. Mr. Justice Douglas, indeed held, that the death penalty companytravened the Eighth Amendment. But his judgment is number capable of being read as requiring the final abolition of capital punishment. Mr. Justice Stewart and Mr. Justice White merely companycluded that the death sentence before them must be set aside because prevailing sentencing practices did number companyply with the Eighth Amendment. The minority of four Judges Burger, CJ, Blackmun, Powell and Rehnquist JJs held that death penalty did number companytravene the Eighth Amendment. Mr. Justice Douglas in reversing the death sentence was of the view that the Eighth Amendment required legislatures to write penal laws that are even handed, numberselective, and numberarbitrary, and to require judges to see to it that gene- ral laws are number applied sparsely, selectively, and spottily to unpopular groups. As is clear from his judgment Douglas, J was very much exercised by the fact that the law with regard to death penalty was being enforced in a discriminatory manner the victim being mostly the poor and the despised, especially, if he was a member of a suspect or unpopular minority-obviously meaning the Negros. At the end of the judgment, however, he made it clear that he was number companysidering in that case whether mandatory death penalty would be companystitutional if it was enforced evenhandedly and in numberdiscriminatory manner. Mr. Justice Stewart after numbering that at least two of his brothers Brennan and Mar- shall, JJ had companycluded that the infliction of the death penalty is companystitutionally impermissible in all circumstances under the Eighth and Fourteenth Amendments stated their case is a strong one. But I find it unnecessary to reach the ultimate question they would decide. At a later stage he made it clear that the companystitutionality of capital punishment in the abstract is number, however, before us in these cases. Mr. Justice White started his opinion In joining the companyrts judgment, therefore, I do number at all intimate that the death penalty is unconstitutional per se or that there is numbersystem of capital punishment that would companyport with the Eighth Amendment. That question, ably argued by several of my Brethren, is number presented by these cases and need number be decided. It will thus be seen that although the death Sentences in that case were set aside by a majority, three out of five Judges who formed the majority did number companysider it necessary to outlaw capital punishment on the social and moral companysiderations which prevailed upon the other two Judges namely Brerman and Marshall, JJ. In short, even when the companyrt was presented with a wealth of evidence companypiled by Sociologists and research workers in refutation of the necessity of retaining capital punishment, only two Judges out of nine companyld be persuaded to hold that capital punishment per se is companystitutionally impermissible. So far as we are companycerned in this companyntry, we do number have, in our companystitution any provision like the Eighth Amendment number are we at liberty to apply the test of reasonableness with the freedom with which the Judges of the Supreme Court of America are accustomed to apply the due process clause. Indeed what is cruel and unusual may, in companyceivable circumstances, be regarded as unreasonable. But when we are dealing with punishments for crimes as prescribed by law we are companyfronted with a serious problem. Not a few are found to hold that life imprisonment. especially., as it is understood in U.S.A. is cruel. On the other hand, capital punishment cannot be described as unusual because that kind of punishment has been with us from ancient times right upto the present day though the number of offences for which it can be imposed has companytinuously dwindled. The framers of our Constitution were well aware of the existence of capital punishment as a permissible punishment under the law. For example,. ,Article 72 1 c provides that the President shall have power to rant pardons, reprieves, respites or remissions of punishment or to suspend, remit or companymute the sentence of any person companyvicted of any offence in all cases where the sentence is a sentence of death. Article 72 3 further provides that Nothing in subclause c of clause 1 shall affect the power to suspend, remind companymute a sentence of death exercisable by the Governor of a State under any law for the time being in force. The obvious reference is to sections 401 and 402 of the Criminal Procedure Code. Then again entries 1 and 2 in List III of the Seventh Schedule refer to criminal law and criminal procedure. In entry number 1 the entry Criminal Law is extended by specifically including therein all matters included in the Indian Penal Code at the companymencement of this Constitution. All matters number only referred to offences but also punishments--one of which is the death sentence. Article 134 gives a right of appeal to the Sup- reme Court where the High Court reverses an order of acquittal and sentences a person to death. All these provisions clearly go to show that the Constitution-makers had recognised the death sentence as a permissible punishment and had made companystitutional provisions for appeal, reprieve and the like. But more important than these provisions in the Constitution is Article 21 which provides that numberperson shall be deprived of his life except according to procedure established by law. The implication is very clear. Deprivation of life is companystitutionally permissible if that is done according to procedure established by law. In the face of these indications of companystitutional postulates it will be very difficult to hold that capital sentence was regarded per se as unreasonable or number in the public interest. Reference was made by Mr. Garg to several studies made by Western scholars to show the ineffectiveness of capital punishment either as a deterrent or as appropriate retribution. There is large Volume of evidence companypiled in the West by kindly social reformers and research workers to companyfound those who want to retain the capital punishment. The companytroversy is number yet ended and experiments are made by suspending the death sentence where possible in order to see its affect. On the other hand most of these studies suffer from one grave defect namely that they companysider all murders as stereotypes, the result of sudden passion or the like, disregarding motivation in each individual case. A large number of murders is undoubtedly of the companymon type. But some at least are diabolical in companyception and cruel in exe- cution. In some others where the victim is a person of high standing in the companyntry Society is liable to be rocked to its very foundation. Such murders cannot be simply wished away by finding alibis in the social maladjustment of the murderer. Prevalence of such crimes speaks, in the opinion of many, for the inevitability of death penalty number only by way of deterrence but as a token of emphatic disapproval by the society. We have grave doubts about the expediency of transplanting Western experience in our companyntry. Social companyditions are different and so also the general intellectual level In the companytext of our criminal law which punishes murder, one cannot ignore the fact that life imprisonment works out in most cases to a. dozen years of imprisonment and it may be seriously questioned whether that sole alternative will be an adequate substitute for the death penalty. We have number been referred to any large scale studies of crime statistics companypiled in this companyntry with the object of estimating the need of protection of the society against murders. The only authoritative study is that of the Law Commission of India published in 1967. It is its Thirty-Fifth Report. After companylecting as much available material as possible and assessing the views expressed in the West both by abolitionists and the retentionists the Law Commission has companye to its companyclusion at paras 262 to 264. These paragraphs are summarized by the Commission as follows at page 354 of the Report The issue of abolition or retention has to be decided on a balancing of the various arguments for and against retention. No single argument for abolition or retention can decide the issue. In arriving at any companyclusion on the subject, the need for protecting society in general and individual human beings must be borne in mind. It is difficult to rule out the validity, of, or the strength behind, many of the arguments for abolition number does, the Commission treat lightly the argument based on the irrevocability of the sentence of death, the need for a modern approach, the severity of capital punishment, and the strong feeling shown by certain sections of public opinion in stressing deeper questions of human values. Having regard, however, to the companyditions in India, to the variety of the social upbringing of its inhabitants, to the disparity in the level of morality and education in the companyntry, to the vastness of its area, to the diversity of its population and to the paramount need for maintaining law and order in the companyntry at the present juncture, India cannot risk the experiment of abolition of capital punishment. Arguments which would be valid in respect of one area of the world may number hold good in respect of another area, in this companytext. Similarly, even if abolition in some parts of India may number make a material difference, it may be fraught with serious companysequences in other parts. On a companysideration of all the issues involved, the Commission is of the opinion, that capital punishment should be retained in the present state of the companyntry. A very responsible body has companye to the above companyclusion, after companysidering all the relevant factors. On the companyclusions. thus offered to us, it will be difficult to hold that capital punishment as such is unreasonable or number required in the public interest. In dealing with the question of reasonableness, we cannot ignore the procedural safeguards provided by the statute. An accused charged for murder is first put up before a Magistrate, who on an examination of the evidence companymits him to the Court of Sessions for trial. The accused knows at this stage what is, the evidence against him. The trial is companyducted before a Sessions Judge or an Additional Sessions Judge with companysiderable experience in the trial of criminal cases. if the Sessions Judge, after trial, companyes to the companyclusion that the accused is guilty of murder and deserves to be sentenced to death, he is required under section 374 of the Criminal Procedure Code to submit to, the High Court the proceedings before him and it is the High Court which has to review the whole evidence and companysider whether the sentence of death passed by the Sessions Judge should be companyfirmed. The rule under section 378 is that this review of the evidence shall be made by a bench of number less than two Judges. If the sentence of death is companyfirmed, the accused can in appropriate cases appeal to the Supreme Court by special leave. In cases where the Sessions Judge acquits the accused of murder but the High Court in appeal sets aside the acquittal and sentences him to death, the accused is entitled under the Constitution to prefer an appeal as of right to this Court. It will be thus seen that there are inbuilt procedural safeguards against any hasty decision. As is well known, the subject of capital punishment is a difficult and companytroversal subject, long and hotly debated. It has evoked strong views. In that state of affairs if the Legislature decides to retain capital punishment for murder, it will be difficult for this Court in the absence of objective evidence regarding its unreasonableness to question the wisdom and propriety of the Legislature in retaining it. A Bill for the abolition of capital punishment was introduced in the Lok Sabha in 1956 but the same was rejected on November 23, 1956. Similarly a resolu- tion for the abolition of capital punishment was introduced in the Rajya Sabha in 1958 but the same was withdrawn after debate. Later in 1961 a similar resolution was moved in the Rajya Sabha but the same was negatived in 1962. A resolution for its abolition was discussed in the Lok Sabha but the same was withdrawn after discussion. All this goes to show that the representatives of the people do number welcome the prospect of abolishing capital punishment. In this state of affairs, we are number prepared to companyclude that capital punishment, as such, is either unreasonable or number in the public interest. The next companytention of Mr. Garg was that by providing in section 302-IPC that one found guilty thereunder is liable to be punished either with death sentence or imprisonment for life, the legislature has abdicated its essential function is number providing by legislative standards in what cases the Judge should sentence the accused to death and in what cases he should sentence him only to life imprisonment. It may be numbered here that prior to the Amending Act 26 of 1956, section 367 5 of the Criminal Procedure Code read as follows If the accused is companyvicted of an offence punishable with death and the companyrts sentences him to any punishment other than death, the companyrt shall in its judgment state the reason why sentence of death was number passed. By the amendment this provision is deleted and, as the Code at present stands, punishment for murder is one of the two--namely death or imprisonment for life. Neither section 302-IPC number any other provision in the Criminal Procedure Code says in what cases the capital punishment is to be imposed and in what others the lesser punishment. It is, therefore, argued by Mr. Garg that the Legislature has left this awful duty to the Judge or Judges companycerned without laying down any standards to guide them in their decision. In fact he says the Legislature has abdicated its legislative function and this delegation of its power to the Judges is vitiated by the vice of excessive delegation. We think there is numbermerit in this submission. In this companynection we have to take numbere of the policy of the law with regard to crimes and their punishments. The position in England is stated by Halsbury in Laws of England, Third Edition, Volume 10 at page 486. The relevant portion of para 888 is as follows DISCRETION OF COURT AS TO PUNlSHMENT In all crimes except those for which the sentence of death must be pronounced a very wide discretion in the matter of fixing the degree of punishment is allowed to the Judge who tries the case. The policy of the law is, as regards most crimes, to fix a maximum penalty, which is intended only for the worst cases, and to leave to the discretion of the judge the determination of the extent to which in a particular case the punishment awarded should approach to or recede from the maximum limit. The exercise of this discretion is a matter of prudence and number of law, but art appeal lies by the leave of the Court of Criminal Appeal against an sentence number fixed by law, and if leave is given, the sentence can be altered by that companyrt. Minimum penalties have in some instances been prescribed by the enactment creating the offence. The position in India is practically the same. The exception made in English Law with regard to the sentence of death does number hold good in India. The policy of our criminal law As regards all crimes, including the crime of murder, is to fix a maximum penalty-the same being intended for the worst cases, leaving a very wide discretion in the matter of punishment to the Judge. In England, murder and treason were offences for which the death sentence was mandatory. If after trial the accused was found guilty by the Jury, neither the Jury number the Judge had any discretion in the matter of sentence. The Judge had to sentence the accused to death. The sentence may be reprieved by the Home Secretary after-taking all the circumstances of the case and other matters into companysideration. But that was numberpart of the judicial process. Absence of any discretion with regard to the sentence raised strong criticism in England because it was recognised, as was done in many other companyntries, that death penalty was number the only appropriate punishment for murder. A Royal Commission was thereupon appointed in 1949 to companysider and report whether liability under the Criminal Law in Great Britain, to suffer capital punishment for murder should be limited or modified and if so to what extent and by what means. In its report published in 1953 the Commission found it impossible to improve the position either by redefining murder or by dividing murder into degrees. In para 535 of the Report it pointed out that the general liability under the existing law to suffer capital punishment for murder cannot be satisfactorily limited by such means, i.e. re- defining murder or dividing murder into degrees because numberlegal definition can companyer all the multifarious companysiderations, relating to the offender as well as to his crime, which ought to be taken into account in deciding whether the supreme penalty should be exacted in each individual case. Ile Commission companysidered various alternatives-one of them being a provision on the lines of section 302-IPC which was pressed with great force, by Sir John Beaumont a former Chief Justice of the Bombay High Court, and later a Privy Councillor. He pressed on the Commission the advisability of leaving it to the Judge whether the death sentence should be imposed or the lesser sentence, adding further that this procedure had worked quite well in India for generations and there was numberreluctance on the part of the Judges to assume the responsibility to pass the death sentence. The Judges in England, however unanimously refused to accept such a responsibility. The question then arose whether the responsibility for the death sentence may be given to the Jury as was done in some of the States in America. The Royal Commission fell in with this suggestion and ex pressed itself as follows See para 595 of the Report . It is number questioned that the liability to suffer capital punishment under the existing law is rigorous to excess. We cannot but regard it as a reproach to our criminal law that this excessive rigour should be tolerated merely because it is companyrected by executive action. The law itself should mitigate it. We have been forced to the companyclusion that this cannot be done by a redefinition of murder or by dividing murder into degrees. No formula is possible that would provide a reasonable criterion for the infinite variety of circumstances that may affect the gravity of the crime of murder. Discretionary judgment on the facts of each case is the only way in which they can be equitably distinguished. This companyclusion is borne out by American experience there the experiment of degrees of murder, introduced long ago, has had to be supplemented by giving to the companyrts a discretion that in effect supersedes it. Such a discretion, if it is to be part of the legal process, and number an act of executive clemency, must be given either to the Judge or to the jury. We find that the Judges in this companyntry, for reasons we respect, would be most reluctant to assume this duty. There remains the method of entrusting it to the jury. We are satisfied that as long as capital punishment is retained this is the only prac- ticable way of companyrecting the outstanding defects of the existing law. In India the difficulty encountered by the Commission had been overcome long ago and it is accepted by the public that only the Judges shall decide the sentence. Where an error is companymitted in the matter of sentence the same is liable to be companyrected by appeals and revisions to higher companyrts for which appropriate pro- vision was made in the Criminal Procedure Code. The structure of our criminal law which is principally companytained in the Indian Penal Code and the Criminal Procedure Code underlines the policy that when the Legislature has defined an offence with sufficient clarity and prescribed the maximum punishment therefore, a wide discretion in the matter of fixing the degree of punishment should be allowed to the Judge. As pointed out by Ratanlal in his Law of Crimes, Twenty-Second Edition page 93 The authors of the Code had,, in many cases number heinous, fixed a minimum as well as a maximum punishment. The Committee were of opinion that, companysidering the general terms in which offences were defined, it would be inexpedient, in most cases, to fix a minimum punishment and they had accordingly so altered the Code as to leave the minimum punishment for all offences, except those of the gravest nature, to the discretion of the Judge who would have the means in each case of forming an opinion as to the character of the offender, and the circumstances, whether aggravating or mitigating, under which the offence had been companymitted. But with respect to some heinous offence-such as offences against the State, murder, attempt to companymit murder, and the like-they had thought it right to fix a minimum punishment. In the whole companye there is only one section Section 303 where death is prescribed as the only punishment for murder by a person under sentence for imprisonment for life. There, are several other sections in which death sentence companyld be imposed, but that sentence is number mandatory. Under two sections namely section 302--murder, and section 121---waging-war against the Government of India, alternative punishments of death or imprisonment for life are leviable. These are the two sections where the maximum punishment is death and the minimum is imprisonment for life. There are two other sections in the Indian Penal Code where the minimum punishment is prescribed-one is section 397 which provides that if at the time of companymitting robbery or dacoity, the offender uses any deadly weapon, or causes grievous hurt to any person, or attempts to cause death or grievous hurt to any person, the imprisonment with which such offender shall be punished shall number be less than seven years and 2 Section 396 which provides that at the time of attempting to companymit robbery or dacoity, the offender is armed with any deadly weapon, the imprisonment with which such offender shall be published shall number be less than seven years. As regards the rest of the offences, even those cases where the maximum punishment is the death penalty, a wide discretion to punish is given to the Judge. The reasons are explained by Ratanlal on the page referred to above. Circumstances which are properly and expressly recognized by the law as aggravations calling for in 18-L498SupCI/73 creased severity of punishment are principally such as companysist in the manner in which the offence is perpetrated whether it be by forcible or fraudulent means, or by aid of accomplices or in the malicious motive by which the offender was actuated, or the companysequences to the public or to individual sufferers, or the special necessity which exists in particular cases for companynteracting the temptation to offend, arising from the degree of expected gratification, or the facility of perpetration peculiar to the case. These companysiderations naturally include a number of particulars, as of time, place, per- sons and things, varying according to the nature of the case. Circumstances which are to be companysidered in alleviation of punishment are 1 the minority of the offender 2 the old age of the offender 3 the companydition of the offender e.g., wife, apprentice 4 the order of a superior military officer 5 provocation 6 when offence was companymitted under a companybination of circumstances and influence of motives which are number likely to recur either with respect to the offender or to any other 7 the state of health and the sex of the delinquent. Bentham mentions the following circumstances in mitigation of punishment which should be inflicted 1 absence of bad intention 2 provocation 3 self preservation 4 preservation of some near friends 5 transgression of the limit of self-defence 6 submission to the menaces 7 submission to authority 8 drunkenness 9 childhood. Indeed these are number the only aggravating or mitigating circumstances which should be companysidered when sentencing an offender. The list is number intended to be exhaustive. In fact the Punjab High Court has held that companysiderable delay in the disposal of a case may be a factor in awarding lesser punishment. See Municipal Committee v. Baisakhi Ram 1 . The policy of the law in giving a very wide discretion in the matter of punishment to the Judge has its origin in the impossibility of laying down standards. Take, for example, the offence of criminal breach of trust punishable under section 409--IPC, The maximum punishment prescribed for the offence is imprisonment for life. The minimum companyld be as low as one days imprisonment and fine. It is obvious that if any standards were to be laid down with regard to several kinds of breaches of trust by the persons referred in that section, that would be an impossible task. All that companyld be reasonably done by the Legislature is to tell the Judges that between the maximum and minimum Prescribed for an offence. they should, on balancing the aggravating and Crl. Law journal 475. mitigating circumstances as disclosed in the case, judicially decide what would be the appropriate sentence. Take the other case of the offence of causing hurt. Broadly, that offence is divided into two categories-simple hurt and grievous hurt. Simple hurt is again sub-divided- simple hurt caused by a lethal weapon is made punishable by a higher maximum sentence-section 324. Where grievous hurt is caused by a lethal weapon, it is punishable under section 326 and is a more aggravated form of causing grievous hurt than the one punishable under section 325. Under section 326 the maximum punishment is imprisonment for life and the minimum can be one days imprisonment and fine. Where a person by a lethal weapon causes a slight fracture of one of the unimportant bones of the human body, he would be as much punishable under section 326-IPC as a person who with a knife scoops out the eyes of his victim. It will be absurd to say that both of them, because they are liable under the same section should be given the same punishment. Here too, any attempt to lay down standards why in one case there should be more punishment and in the other less punishment would be an impossible task. What is thus true with regard to punishment imposed for other offences of the companye is equally true in the case of murder punishable under section 302-IPC. Two alternate sentences are provided one of which companyld be described as the maximum and the ether minimum. The choice is between these two punishments and as in other cases the discretion is left to the Judge to decide upon the punishment in the same manner as it does in the case of other offences, namely, balancing the aggravating and mitigation- circumstances. The framers of the Code attempted to companyfine the offence of murder within as narrow limits as it was possible for them to do in the circumstances. All culpable homicides were number made punishable under section 302-IPC. Culpable homicides were divided broadly into two classes 1 culpable homicide amounting to murder and 2 culpable homicide number amounting to murder. Culpable homicide which fell in the one or the other of the four strictly limited categories described in section 300-IPC amounted to murder unless it fell in one of the five exceptions mentioned in that section, in which case the offence of murder was reduced to culpable homicide number amounting to murder. Any further refinement in the definition of murder was number practicable and, therefore, number attempted. The recent experience of the Royal Commission referred to above only emphasizes the extreme difficulty. The Commission frankly admitted that it was number possible to prescribe the lesser punishment of imprisonment for life by redefinition of murder or by dividing murder into degrees. It companyceded that numberformula was possible that would provide a reasonable criterion for the infinite variety of circumstances, that may affect the gravity of the crime of murder that companyclusion forced the Commission to the view that discretionary judg- ment on the facts of each case is the only way in which they can be equitably distinguished. See para 595 of the Commissions Report. American experience is number different. In some of the States murder and rape were punishable with death. But that was number the only punishment. The, Law gave the Jury discretion in capital sentencing, and the question arose recently before the Supreme Court of America in McGauthn v. California 1 whether in tile absence of any standards for deciding when the accused should be sentenced to death or to life imprisonment the provision of law which gives the discretion to the Jury was companystitutional. Mr. Justice Harlan delivered the opinion of five Judges and Mr. Justice Black substantially agreed with that opinion in a separate judgment. The majority held that the infinite variety of cases and facets to each case would make general standards either meaning less boiler plate or a statement of the obvious that numberJury would need. The majority agree with the view of the Royal Commission already referred to and observed those who have companye to grips with the hard task of actually attempting to draft means of channeling capital sentencing discretion have companyfirmed the lesson taught by the history recounted above. To identify before the fact those characteristics of criminal homicides and their perpetrators which call for the death penalty, and to express these characteristics in language which can be fairly understood and applied by the sentencing authority, appear to be tasks which are beyond present human ability. The model Judicial ode which was presented to the companyrt as an attempt towards standardization was strongly criticised by the majority who pointed out that tile Craftsmen of the Model Judicial Code had expressly agreed with ,he companyclusion of the Royal Commission that the factors which determined whether the, sentence of death is the appropriate penalty in particular cases are too companyplex to be expressed within the limits of a simple formula. Some of the circumstances of aggravation and mitigation were mentioned in the Appendix to, the Code. But it was pointed out that the Draftsmen of the Code did number restrict themselves to the items referred to in the Appendix but expressly stated that besides the above circumstances the companyrt was bound to take into companysideration any other facts that the companyrt deems relevant. This only meant that any exhaustive enumeration of aggravating or mitigating circumstances is impossible-the admission of which emphasizes the view that standardisation is impossible. Finally the majority observed at page 726 In light of history, experience, and the present limitations of human knowledge, we find it quite impossible to say that company- mitting to the untrammeled discretion of the jury the power to pronounce life or death in capital, cases is offensive to anything in the Constitution. United States Supreme companyrt report Lawyers Edition, 28, 713. In India this onerous duty is cast upon Judges and for more than a century the judges are carrying out this duty under the Indian Penal Code. The impossibility of laying down standards is at the very companye of the criminal law as administered in India which invests the Judges with a very wide discretion in the matter of fixing the degree of punishment. That discretion in the matter sentences as a already pointed out, liable to be companyrected by superior companyrts. Laying down of standards to the limited extent possible as was done in the Model Judicial Code would number serve the purpose. The exercise of judicial discretion on well-recognised principles is, in the final analysis, the safest possible safeguard for the accused. It was next companytended by Mr. Garg that uncontrolled and unguided discretion in the judges to impose capital punishment or imprisonment for life was hit by Article 14 of the Constitution. we do number find any merit in this companytention also. If the Law has given to the Judge a wide discretion in the matter of sentence to be exercised by him after balancing all the aggravating and mitigating circumstances of the crime, it will be impossible to say that there would be at all any discrimination, since facts and Circumstances of one case can hardly be the same as the facts and circumstances of another. It has been pointed out by this Court in Budhan Choudhry and others v. The State of Bihar Art. 14 can hardly be invoked in matters of judicial, discretion. This Court observed at page 1054 It has, however, to be remembered that, in the language of F ankurter, J. in Snowden v. Hughes, the Constitution does number assure uniformity of decisions or immunity from merely erroneous action, whether by the Courts or the executive agencies of a State. The judicial decision must of necessity depend on the facts and circumstances of each particular case and what may superficially appear to be an unequal application of the law may number necessarily amount to a denial of equal protection unless there is shown to be present in it an element of intentional and purposeful discrimination Further, the discretion of judicial officers is number arbitrary and the law provides for revision by superior companyrts of orders passed by the Subordinate companyrts. In such circumstances, there is hardly any ground for apprehending any capricious discrimination by judicial tribunals. Crime as crime may appear to be superficially the same but the, facts and circumstances of a crime are widely different and since a decision of the companyrt as regards punishment is dependent upon a companysideration of all the facts and circumstances, there is Hardly any ground for challenge under Article 14. Lastly it was companytended by Mr. Garg that under Article 21 of the Constitution numberperson shall be deprived of his life except according to procedure established by law and, in his submission. 1 1955 S.C.R. 1045. before the-sentence of death is passed there is, in fact, numberprocedure established by law. It is admitted that the Criminal Procedure Code lays down a detailed procedure but that procedure, according to Mr. Garg, is limited to the finding of guilt. After the accused is found guilty of the offence, there is numberother procedure laid down by the law for determining whether the sentence of death or something less is appropriate in the case. Therefore, he companytended, death sentence is unconstitutional. We are number impressed by this argument also. The accused who is charged for murder knows that he is liable to be sentenced to death in the Committing Court itself. He knows what the evidence is. He further knows that if after trial in the Sessions Court he is found guilty of murder, he is liable to be sentenced to the extreme penalty. Experience of trials shows that where the accused knows that the facts of the case are against him. the whole attempt on the part of his companynsel is to fill the record with as many circumstances in his favour as possible which would tend to show that he is either guilty of a lesser crime or, in any event, there are mitigating and extenuating circumstances. The companyrt is primarily companycerned with all the facts and circumstances in so far as they are, relevant to the crime and how it was companymitted and since at the end of the trial he is liable to be sentenced, all the facts and circumstances bearing upon the crime are legitimately brought to the numberice of the companyrt. Apart from the cross-examination of the witnesses, the Criminal Procedure Code requires that the accused must be questioned with regard to the circumstances appearing against him in the evidence. He is also questioned generally on the case and there is an opportunity for him to say whatever he wants to say. He has a right to examine himself as a witness, thereafter, and give evidence on the material facts. Again he and his companynsel are at liberty to address the companyrt number merely on the question of guilt but also on the question of sentence. In important cases like murder the companyrt always gives a chance to the accused to address the companyrt on the question of sentence. Under the Criminal Procedure Code after companyvicting the accused the companyrt has to pronounce the sentence according to law. In a Jury trial if the accused is companyvicted the Judge shall unless he proceeds in accordance with the provisions of section 562 pass sentence on him according to law. See section 306 2 . Similarly, where the case is tried by the Judge himself sub-section 2 of section 309 says that if the accused is companyvicted, the Judge. shall, unless he proceeds in accordance with the provisions of section 562, pass sentence on him according to law. The sentence follows the companyviction, and it is true that numberformal procedure for producing evidence with reference to the sentence is specifically provided. The reason is, that relevant facts and circumstances impinging on the nature and circumstances of the crime are already before the companyrt. Where companynsel addresses the companyrt with regard to the character and standing of the accused, they are duly companysidered by the companyrt unless there is something in the evidence itself which belies him or the Public Prosecutor for the State challenges the facts. If the matter is relevant and essential to be companysidered, there is numberhing in the Criminal Procedure Code which prevents additional evidence being taken. It must, however, be stated that it is number the experience of criminal companyrts in India that the accused with a view to obtaining a reduced sentence ever offers to call additional evidence. However, it is necessary to emphasize that the companyrt is principally companycerned with the facts and circumstances, whether aggravating or mitigating, which are companynected with the particular crime under inquiry. All such facts and circumstances are capable of being proved in accordance with the provisions of the Indian Evidence Act in a trial regulated by the Cr. P.C. The trial does number companye to an end until all the relevant facts are proved and the companynsel on both sides have an opportunity to address the companyrt. The only thing that remains is for the Judge to decide on the guilt and punishment and that is what section 306 2 and 309 2 Cr. P.C. purport to provide for. These provisions are part of the procedure established by law and, unless it is shown that they are invalid for any other reasons, they must be regarded as valid. No reasons are offered to show that they are companystitutionally invalid, and, hence, the death sentence imposed after trial in accordance with the procedure established by law is number unconstitutional under Article 21.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 993 of 1972. Appeal by certificate from the judgment and order dated February 18, 1972 of the Andhra Pradesh High Court at Hyderabad in Writ Appeal No. 633 of 1970. C. Chagla, K. V. Narasinga Rao and P. Parameshwara Rao, for appellant No. 1. K. Daphtary, K. V. Narasinga Rao and P. Parameshwara Rao, for appellant No. 2. A. Choudhry and K. Rajendra Choudhry, for respondents Nos. 1 and 5-7. S. Gururaja Rao and S. Markandey, for interveners. The Judgment of the Court was delivered-by SIKRI, C.J.-This appeal by certificate granted by the High Court of Andhra Pradesh is directed against the judgment of the High Court, dated February 18, 1972, passed in Writ Appeal No. 633 of 1970, which arose out of the order of the High Court of Andhra Pradesh, dated July 9, 1969, in Writ Petition No. 2524 of 1967. Before the Division Bench of the High Court the Full Bench judgment of the High Court dated December 9, 1970 P. L. Rao v. State of Andhra Pradesh 1 was cited, but as this Full Bench decision was challenged before it and it thought that a reference of the matter to a Full Bench of five judges is advisable it directed that the papers be laid before the Honble the Chief Justice of the High Court for companystitution of a larger Bench. The Chief Justice of the High Court accordingly companystituted the Full Bench of five Judges. This Full Bench, by majority, held that the mulki rules are number valid and operative after the formation of the State of Andhra Pradesh. In any event, they do number revive and cannot be deemed to be valid and operative in view of the decision of the Supreme Court in V.S Narasimha Raos case 2 . The Full Bench decision in Lakshmana Raos case 3 is thus overruled. W.A. No. 633 of 1970 along with W.A.M.P. Nos. 493 and 494 of 1971 will be posted before the Division Bench for further orders. Receiving this opinion, the Division Bench delivered the following judgment We have already indicated in the order of reference that it a reference to Full Bench is made, and if the decision of the Full Bench is to the effect that the Mulki A.I.R. 1971 A.P. 118. 2 1970 1 S.C.R. 115 Rules are number operative, then appeal has to be allowed. Having regard to the direction previously given by us in the order of reference, and in the light of the decision of the Full Bench, the Writ Appeal has to be allowed. We accordingly allow the Writ Appeal with companyts. In this appeal we are thus companycerned with the validity of the so-called Mulki Rules. Before dealing with the questions of law which have been debated before us it is necessary to give a few relevant facts. Writ Petition No. 2524 of 1967 out of which the present appeal arises was filed by 12 Extension Officers in the Department of Industries, Government of Andhra Pradesh. They were appointed as Extension Officers in May, 1961, and after they underwent training, were posted in various districts. The strength of the cadre of Extension Officers was reduced and that led to the retrenchment of some of the personnel including the petitioners, who were absorbed in another cadre, viz., Senior Inspectors. This absorption resulted in diminution in their scale of pay. Their grievance was that persons appointed later and juniors to them in service were retained as Extension. Officers, whereas they, by an order dated September 28, 1967, were retrenched and that, instead of following the rule last companye, first go, the juniors in rank were sought to be retained as Extension Officers by reason of their residence in Telengana area and that such a preferential treatment on the basis of residential qualifi- cation is discriminatory and violative of Art. 16 of the Constitution. It was admitted in the companynter affidavit of the Government that except the Telengana employees who were posted only in Telengana region, and to which Andhra Personnel cannot be posted, numberjuniors of the petitioners were allowed to companytinue in their posts in preference to the rights of the petitioners. The Mulki Rules formed part of the Hyderabad Civil Service Regulations promulgated in obedience to His Exalted Highness the Nizams Firman dated 25th Ramzan 1337H. The State of Hyderabad was then a native Indian State which had number acceded to the Dominion of India after the Indian Independence Act, 1947. Chapter III of the Regulations companytained article 39 which reads as follows No person will be appointed in any Superior or Inferior service without the specific sanction of His Exalted Highness, if he is number a Mulki in terms of the rules laid down in Appendix N. Any person whose domicile is cancelled under para 9 of the Mulki rules, will be companysidered to have been dismissed from his post from the date of such cancellation. The. following rules in Appendix N may be set out A person shall be called a Mulki if-- a by birth he is a subject of the Hyderabad State, or b by residence in the Hyderabad State he has been entitled to be Mulki, or c his father having companypleted 15 years of service was in the Government service at the time of his birth, or d she is a wife of a person who is a Mulki. A person shall be called a Mulki who has a per manent residence in the Hyderabad State for at least 15 years and had abandoned the idea of returning to the place of his previous residence and has obtained an affidavit to that effect on a prescribed form attested by a Magistrate. Rule 7 prescribes he companytents of the application to be made for grant of a Mulki certificate and required the applicant, among other things, to say a b c Where was he residing prior to his residing in the Hyderabad State. Place of birth and nationality of his father and grandfather. f g From what period the-applicant is permanently residing in the Hyderabad State and whether he has abandoned the idea of returning to his native land, i Has the applicants father or he himself created such companynections within the Hyderabad State which lead to believe that they have made Hyderabad State their native land. Rule 9 reads as follows Government in the Police Department may cancel any Mulki certificate if the Government finds that any of the entries made in the application for the Mulki certificate under Rule 7 is number companyrect or that it was obtained by false personation or false statements and it may cancel certificates of persons mentioned in clauses b , c and d of Rule 1 if the holder of the Mulki certificate is disloyal to H.E.H. or the Hyderabad Government in his companyduct or behaviour or is directly or indirectly companynected with such political activities which are detrimental or companytrary to the interest of the Hyderabad Government. The Constitution of India came into force on January 26, 1950, except the parts which had been enforced earlier. The relevant articles for our purposes are Arts. 13, 14, 16 and 35. The companyditions as they prevailed in the Hyderabad State been summarised by Madhava Reddy, J., in his judgment in Pull Bench, and we may usefully reproduce this summary Here Hyderabad State was one among the several other Princely States of India. Due to Political companyditions and Historical reasons the State remained isolated. There were numberadequate Educational facilities afforded to the People of the State, in the result, there were very few opportunities available to the people of the Region to enter public service in companypetition with others from outside the State. Another companytributing factor in this behalf was the use of Urdu, which was number the language of nearly ninety per cent of the people, as the Official Language in the entire administration of Hyderabad state. Similar companyditions prevailed in a few other states as well. So much so, that these people were number in a position to companypete with others in the matter of employment even in their own state, if numberprotection was afforded to them in this behalf on the basis of residence within that State. In view of these companyditions, Madhaya Reddy, J., further stated that the Constituent Assembly while guaranteeing fundamental rights in the matter of employment under the State, took of this vast disparity in the development of various States and felt it imperative to companytinue that protection in the matter of employment afforded on the basis of residence within the State and made provision under Article 33 b of the Constitution for the companytinuance of those laws. A few more historical facts may also be numbericed here. The States Re-organisation Commission set up by the Central Government recommended the disintegration of the Hyderabad State and suggested the companytinuance of the Telengana region of the Hyderabad State as a separate State. However, an agreement was reached by the elders of the Andhra Telengana Regions, among whom were the Chief Miniser and the Dy. Chief Minister of the State of Andhra and the Chief Minister, Revenue Minister and the some other Ministers of the Hyderabad State amongst whom one later became the first Chief Minister and most others members of the first Council of Ministers of the State of Andhra Pradesh with a view to allay the fears of the people of this underdeveloped Region and to reserve to them the benefit of securing employment in the Region on the strength of their residence. For safeguarding their legitimate interests in certain matters the formation of a Regional Standing Committee of the State Assembly companysisting of the members of the State Assembly of this Region was also agreed upon. We may mention that in this agreement in clause B Domicile Rules were dealt with as follows A temporary provision will be made to ensure that for a period of five years, Telengana is regarded as a unit as far as recruitment to subordinate services in the area is companycerned posts borne on the cadre of these services may be reserved for being filled by persons who satisfy the domicile companyditions as prescribed under the existing Hyderabad Rules. Parliament, in effect, gave statutory recognition to this agreeby making, the necessary companystitutional amendment in Art. 371 providing for the companystitution of the Telengana Regional Committee. The Constitution Seventh Amendment Act, 1956, inter alia, substituted a new article 371 for the old, the relevant part of which reads as follows Special provision with respect to the States of Andhra Pradesh, Punjab and Bombay.-- 1 Notwithstandin anything in this Constitution, the President may, by order made with respect to the State of Andhra Pradesh provide for the companystitution and functions of regional companymittees of the Legislative Assembly of the State, for the modifications to be made in the. rules of business of the Government and in the rules of procedure of the Legislative Assembly of the State and for any special responsibility. of the Governor in order to secure the proper functioning of the regional companymittees The State of Andhra Pradesh was reconstituted on November 3, 1956. We may number refer to the attempts made to safeguard and apply the Mulki Rules. Appendix N of the Hyderabad Civil Service Regulation was amended and an explanation was inserted, which reads Explanation The above Mulki Rules shall be read in companyjunction with the clarifications companytained in the following circular letters and Notification issued by the Government of Hyderabad in the General Administration Department reproduced . One of the circular letters dated June 14, 1950 briefly stated Government is number advised that the Mulki Rules are save to the extent of their inconsistency with the Constitution of India saved by clause b . of art. 35. It is, therefore, necessary to put out of operation the requirements laid down by the Mulki Rules to the extent that they prescribe qualifications regarding Birth and Descent. Another circular letter dated September 18, 1951, stated that the Government had decided that the period of Fifteen Years Residence prescribed in the existing Mulki Rules, should be companytinuous with the proviso that periods spent outside the State for educational or medical purposes will number companynt as a break in this. period of 15 years, where permanent residence has been and companytinues to be in Hyderabad State. The following questions emerge from the submissions of the learned companynsel before us Were r. 1 b , read with r. 3, of the Mulki Rules hereinafter referred to as the impugned Mulki Rules and art. 39 laws in force immediately before the companymencement of the Constitution in the territory of India ? Were they companytinued in force by art. 35 b of the Constitution ? Did they companytinue in force after the companystitution of the State of Andhra Pradesh under the Re-organisation of States Act, 1956 Did they stand repealed by s. 2 of the Public Employment Requirement as to Residence Act, 1957 Act 44 of 1957 numberwithstanding that s. 3 of the said Act wag declared void in so far as it dealt with Telengana ? We will deal with these questions one by one. The first question is easy to answer. On this question the Judges of the Full Bench are agreed that the answer must be in the affirmative. The words laws in force in the territory of India in art. 35 b also occur in art. 372, which companytinue in force existing laws which existed number only in the Provinces of British India but in all Indian States. It would be remarkable if it were otherwise. In the companytext of art. 3 5 b and art 372 what has to be, seen is number whether the State of Hyderabad was part of the territory of India before the companymencement of Constitution but whether its territory is included in India its companymencement. The same test applies to the old Provinces or part of provinces of British India This Courts decision in Janardan Reddy v. The State on the companystruction of art. 136 of the Constitution proceeded on the basis that to art. 136 the numbermal mode of interpreting a legislation as prospertive should be applied. We are number companycerned with any such companysideration while interpreting art. 35 b of the Constitution. The second question also does number give much difficulty. Article 35 b , in terms, saves any law in force immediately if it before the companymencement of the Constitution , if it is a law with respect to a matter referred to in art. 35 a The matter referred to for our purposes is a matter under cl. of art, 16 which may be provided for by law made by Parliament. What is then the matter that can be provided for under art. 16 3 The matter is any requirement as to residence within a State in regard to class or classes of employment or appointment to an office under the Government or any local or other authority. This Court interpreted art. 16 3 in Narasimha Rao v. The State of Andhra Pradesh 2 to mean that it speaks of a whole State as the venue for residential qualifications. It cannot be said .that the impugned Mulki Rules companyld number be provided for by Parliament under art. 16 3 . They are with respect to the matter referred to in art.16 3 . Article 16 3 companyfers legislative power on Parliament with respect to a matter mentioned therein. It companyfers numberless power than arts. 245-246 do, read with List I and List II. The impugned rules prescribed requirements as to residence within the whole of Hyderabad State and therefore are saved and companytinued in force by art. 35 b . It was, however, urged that the impugned rules formed Part of a number of other rules which, become void on the companymencement of ,the Constitution, all the Mulki rules companystituted one integrated, scheme regulating appointments to services and post,, under the old Hyderabad State and if the other rules are void the impugned rules would also fall. But this principle of interpretation cannot be applied to art. 35 b , for it expressly saves laws like the impugned Mulki Rules. If we were, to apply the suggested principle of interpretation we would be rendering art, 35 b nugatory for ordinarily rules like the impugned rule would 1 1950 S.C.R. 940. 2 1970 1 S.C.R. 115. form part of Civil Service Regulations or laws dealing with appointments especially in the old Indian States. We must give effect to the intention clearly expressed in art. 35 b . The judges of the Full Bench also came to the same companyclusion and in agreement with them we hold that the impugned rules were companytinued in force by art. 35 b of the Constitution. The third question is number so easy to answer as divergent views have been expressed by Judges of the Andhra Pradesh High Court. It seems to us that here too we must give effect to the intention of the founders of the Constitution as evinced in art. 35 b . On the terms of art. 35 b the only proper question to be asked is Has Parliament in exercise of its power under art. 35 b , read with art. 16 3 , altered or repealed or amended the impugned rules ?. That this is the proper question follows from the words numberwithstanding anything in the Constitution. This expression equally applies to art. 35 a and art. 35 b . In art. 35 b the effect of these words is number only to companytinue he impugned rules but to companytinue them until Parliament repeals, amends or alters them. It seems to us that the effect of re-Organisation of States made under arts. 3 and 4 of making Telengana a part of a new State has to be ignored under art. 35 b it must be remembered that art. 35 b is a part of the Chapter on Fundamental Rights-would be liable to be taken away by the re-organisation of States. It cannot be denied that the purpose of reorganisation of States is number to take away fundamental rights. Accordingly we are of the view that the impugned rules companytinued in force even after the companystitution of the State of Andhra Pradesh under the Re-organisation of States Act, 1956. The fourth question again is number free from difficulty. In this companynection it is necessary to give a few more facts and the provisions of the Public Employment Requirement as to Residence December 7, 1957. The Preamble reads An act to make in pursuance of clause 3 of Article 16 of the Constitution special provisions for requirement as to residence in regard to certain clauses of public employment in certain areas and to repeal existing laws prescribing any such requirement. The object it is clear from his recital, is two-fold one, to make ,Provisions in pursuance of art. 16 3 and, two, to repeal the existing laws relevant thereto. The Act did number companye into force immediately because it provided in S. 1 2 that it shall companye into force on such date as the Central Government may by numberification in the official gazette appoint. Section 2 companytained the repeal clause and it is in the following terms Upon the companymencement of this Act, any law then in force in any State or Union territory by virtue of clause b of Article 35 of the Constitution prescribing in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, that State or Union territory, any requirement as to residence therein prior to such employment or appointment shall cease to have effect and is hereby repealed. There is numberdoubt that the impugned Mulki Rules fall within s. 2 and if there was numberhing more they would stand repealed. But the second purpose of Parliament was achieved by enacting S. 3 which provided. 3. 1 The Central Government may by numberification in the Official Gazette, make rules prescribing, in regard to appointments to- a any subordinate service or post under the State Government of Andhra Pradesh, or b any subordinate ate services or post under the companytrol of the Administrator of Himachal Pradesh, Manipur or Tripura, or c any service or post under a local or other authority other than a cantonment board within the Telengana area of Andhra Pradesh or with in the Union territory of Himachal Pradesh, Manipur or Tripura, any requirement as to residence within the Telengana area, or the said Union territory, as the case may be, prior to such appointment. Section 4 provided for Parliamentary scrutiny of rules and s. 5 dealt with duration of rules. Section 5, as originally enacted, provided Section 3 and all rules made thereunder shall cease to have effect on the expiration of five years from the companymencement of this Act, but such cesser shall number effect the validity of any appointment previously made in pursuance of the said rules. The words five years had subsequently been substituted by the words fifteen years. In pursuance of this Act certain rules, called the Andhra Pradesh Public Employment Requirement as to Residence Rules, 1959 were made. The Act and the Rules were challen- ged before this Court in Narasimha Rao v. State of Andhra Pradesh 1 . This Court held that S. 3 of the Public Employment Requirement as to Residence Act, 1957, insofar as it related to Telengana--we say numberhing about the other parts-and r. 3 of the Rules made under this Act were ultra vires the Constitution. No opinion was expressed in this judgment on the point whe- ther the Mulki Rules existing in the former Hyderabad State should companytinue to operate by virtue of art. 35 b . It is urged before us that if S. 3 is void, so is S. 2 because s. 2 and s. 3 of the said Act form, one scheme in other words, it was number the intention of Parliament to simply repeal the existing laws in Telengana dealing with residential requirements for the purposes of appointment, the intention being to substitute other rules in place of the earlier rules. It is quite clear that Parliament had made up its mind that rules requiring residence as qualification for appointment to services or offices shall companytinue because the Public Employment Act enables the Central Government to make such rule S. Not only that, but S. 5 assumes that rules will be made and it is on this assumption that S. 5 originally proceeded to give a life of five years to them from the companymencement of the Act. It is impossible to read S. 5 and S. 3 together without companying to the companyclusion that it was the intention of Parliament that Central Government would make the necessary rules. The Central Government also understood the intention to be the same because it acted under sub-s.1 2 and S. 3 simultaneously. In other words, the date of companymencement of the Act was fixed as March 21, 1959, and the rules also came into force on the same date. A number of authorities of this Court and other authorities have been cited before us in order to enable us determine whether S. 2 is number severable from S. 3 of-the Public Employment Act. It is number necessary to refer to them here because the principles are well-known and have been re- iterated in a number of cases of this Court, including M.D. Chamarbaugwala v. Union of India - It seems to us that principles 1 and 3, mentioned in this judgment at page 950, apply to the facts, of this case. In, our view it is clear that Parliament would number have enacted S. 2 without s.3 as far as Telengana is companycerned. The whole history of the legislation, its object, title and the Preamble to it, point to that companyclusion. Further, the Constitution Seventh Amendment Act, 1956, 1 1970 1 S.C.R. 115. 2 1957 S.C.R. 930. substituting new article 371 for the old also shows that it was intended to give special companysideration to the Telengana region. We may mention that the earlier Full Bench came to the same companyclusion in P. Lakshmana Rao v. State of Andhra Pradesh It was urged before us that s. 2 insofar as it dealt with Telengana region cannot be given an independent existence. We are unable to accede to this. h is only a matter of drafting and if the Telengana region had been dealt with separately in a separate act we would have had numberhesitation in holding that S. 2 would fall with s. 3. The fact that s. 2 deals with laws and rules in various states would number prevent us from separating the valid portion from the invalid portion. This Court specifically held that S. 3 was bad insofar as it dealt with the Telengana region. We hold that s. 2 is also bad insofar as it dealt with Telengana area. We may mention that we are number companycerned with the interpretation of the Mulki Rules and their applicability after the adaptation on. No such question was answered by the Full Bench or was dealt with by the Division Bench. In the result the appeal is allowed, the judgments of the Full Bench and the Division Bench are set aside and writ petition No. 2524 of 1967 is dismissed. It was suggested by the respondents in the appeal that the impugned Mulki Rules are unjust to them. This was strongly denied by the appellants. This is a matter for Parliament and number for us.	Case appeal was accepted by the Supreme Court
CRIMINAI, APPELLATE JURISDICTION Cr. A. No. 91 of 1970. Appeal by special leave from the judgment and order dated August 25, 1969 of the Gujarat High Court at Ahmedabad in Cr. R. A. No. 244 of 1969. T. Desai and N. N. Keswani, for the appellant. K. Dholakia and B. D. Sharma, for the respondent. The Judgment of the Court was delivered MATHEW, J.-This is an appeal by Special Leave from the judgment of the High Court of Gujarat at Ahmedabad in Criminal Revision Application No. 244 of 1969. By the judgment the High Court set aside the order of the Chief City Magistrate,, Ahmedabad, dismissing the companyplaint filed by the Inspector of Factories against the Manager of Arun Mills Ltd., the appellant here, on the ground that the prosecution was barred by time. The facts of the case lie in a narrow companypass. One Chandra- kant Jethalal was a worker in the factory in question of which the appellant was the Manager. On February 27, 1968, the worker while cleaning the clip stentering machine with a rag near the delivery-side slipped when the machine was in motion, and while trying to save himself, his right hand was trapped into the bevel gears of the stentering machine. The bevel gears were at a height of three feet from the ground floor and are dangerous parts of the stentering machine and were number safe by position and companystruction. As a result of the injury his fingers had to be amputated. In respect of this accident, the Inspector of factories received a report from the companycerned authority on February 28, 1968. The Inspector visited the factory on 30-7-68 and made an enquiry into the accident. Thereafter he filed the companyplaint on 20- 9-68 for an offence punishable under s. 92 of the Factories Act. 1948 hereinafter called the Act . On behalf of the accused a preliminary objection was taken that the prosecution was barred by time in view of- the provisions of s.106 of the Act which provides that numberCourt shall take companynizance of any offence punishable under the Act unless companyplaint thereof is made within three months of the date on which the alleged companymission of the offence came to the knowledge of an Inspector. The Magistrate found that the report companyveyed knowledge of the companymission of an offence and that the Inspector came to know about the companymission of the offence on the date the report was received by him and therefore the companyplaint was barred by time. It was against this order that the revision application was filed before the High Court. The High Court came to the companyclusion that the Inspector did number get any knowledge of the companymission of an offence under the Act from the report, and as he got the knowledge of the companymission of the offence only on the date of the enquiry, the companyplaint was filed within time. So, the main question in this case is whether the facts mentioned in the report were sufficient to companyvey the knowledge of the companymission of an offence under the Act. There is numbercontroversy here that the offence companymitted if any, is one under clause iv c of sub-section 1 of Section 21 of the Act. Section 21 1 iv c reads as follows-- Unless they are in such position or of such companystruction as to be safe to every person employed in the factory as they would be if they were securely fenced, the following, namely,-- a every part of an electric generator, a motor or rotary companyvertor b every part of transmission machinery and c every dangerous part of any other machinery, shall be securely fenced by safeguards of substantial companystruction which shall be kept in position while the parts of machinery they are fencing are in motion or in use A plain reading of section 21 1 iv c would indicate that every dangerous part of any other machinery shall be securely fenced by safeguard of substantial companystruction which shall be kept in position while the parts of machinery they are fencing are in motion or in use and that is to be done unless they are in such position or of such companystruction as to be safe to every person employed in the factory as they would be if they were securely fenced. In other words, if those dangerous parts are in such position or are of such companystruction as to be safe to every person employed, the question of securely fencing by safeguard of substantial companystruction and of keeping them in position while the parts of machinery they are fencing are in motion or in use will number arise. The question is whether the report revealed all the necessary elements that go to companystitute the offence. The report was in Form No. 21, as prescribed under Rule 103 of the Act. In companyumn 9 a of the report which is the companyumn regarding cause or nature of accident of dangerous occurrence, the facts stated in answer are, While cleaning the clip stenter machine with a rag in his right hand near the bevel gears the rag and the right palm slipped inside the gear and crushed the whole palm with five fingers. In companyumn 9 b i which is the companyumn headed If caused by machinery, give name of machine and part causing the accident, the facts stated are, bevel gear of clip stenter driving the chain. In companyumn 9 b ii which is the companyumn State whet-her it was moved by mechanical power at the time the fact stated was, mechanical and in companyumn 9 c which states state exactly what injured person was doing at the time. the answer given was, cleaning the clip stenter machine. The statements in the report only indicated that an accident has taken place to the Worker who was cleaning the clip stenter machine with a rag in his right hand near the level gear, which is a dangerous part of machinery and the rag and the right palm slipped inside the gear and whole palm with five fingers was crushed. It also indicated that the part of the machinery was moved by mechanical power and the accident took place when the worker was cleaning the clip stentering machine. The report did number state that the dangerous parts of the machinery were number in such position or of such companystruction as to be safe to every person employed in the factory as they would be if they were securely fenced. Nor was it stated that dangerous parts of this machinery were number securely fenced by safeguards of substantial companystruction or that they were number kept in position while the parts of the machinery they were fencing, were in motion or in use. It would be difficult for any one reading the report to companye to the companyclusion that an offence under s. 21 1 iv c has been companymitted. When the Inspector was examined in the case, he categorically stated that the report did number companyvey to him any knowledge as regards the companymission of the offence. We do number, say that the statement of the Inspector in his evidence that he did number acquire knowledge of the companymission of the offence till he made the inquiry is companyclusive. But we think that his evidence read in the light of the report can only lead to the companyclusion that the Inspector did number acquire the knowledge of the companymission of the offence when the received the report. We, therefore, accept the finding of the High Court that the Inspector did number acquire knowledge of the companymission of the offence from the report and that he gained the knowledge of the companymission of the offence only on 30th July 1968. It was argued on behalf of the appellant that when the report companyveyed the information about the accident, the Inspector should have enquired into it with reasonable promptness and as s. 106 prescribes a period of only three months, from the date of the knowledge of the companymission of the offence, for filing a companyplaint, the Inspector ought number have waited for a period of 6 months for making the inquiry. It was argued that if an Inspector were to companye to know of an accident, he cannot wait till such time as he choose to make the inquiry and then say that he came to know of the companymission of an offence under the Act as a result of the inquiry and thus postpone at his whim the starting point of limitation. There can be numberdoubt that it the Inspector had companyducted the inquiry earlier, he would have companye to know of the companymission of the offence earlier. But our attention was number drawn to any provision in the Act or the rules framed under the Act which obliged the Inspector to companyduct an inquiry within any specified period after the receipt of the report into the cause of accident. And in interpreting a provision in a statute prescribing a period of limitation for institution of a proceeding, questions of equity and hardship are out of place. See the decisions of the Privy Council in Nagendra Nath v. Suresh Chandra 1 and Magbul Ahmed v. Pratap Narain We have to go by the clear wording of the section, and the date of knowledge of the companymission of the alleged offence alone is made the starting point of limitation. In State v. Keshavlal, 3 Mudholkar, J. had to deal with a similar question. No doubt, he was companycerned with the interpretation of section 23 2 and section 79 of the Mining Act, 1952. Section 79 of the Mining Act provides- No companyrt shall take companynizance of any offence under this Act, unless companyplaint thereof has been made. i within six months of the date on which alleged companymission of the offence came to the knowledge of the Inspector. Section 23 2 states that when a numberice given under sub- section 1 relates to an accident causing loss of life, the authority shall make an inquiry into the occurrence within two months of the receipt of the numberice. It was companytended on behalf of the State in that case that the companymission of the offence came to the knowledge of the Inspector only after the companypletion of the inquiry and that the companyplaint having been made within, six months of the companypletion of the inquiry, was within time. On the other hand, it was companytended for the accused that where the knowledge of the companymission of an offence was dependent upon the result of an inquiry, such inquiry must necessarily be companymenced within two months of the date of intimation of the accident and that the period of two months cannot be extended by delaying the inquiry. Dealing with the question, the learned Judge. said - It was then said that had an inquiry be instituted earlier, the Inspector would have companye to know of the breach in question earlier and so limitation must be deemed to have started running from the date of the numberice of the accident or at most from the expiry of two months of the giving of the numberice. It is companymon ground that the knowledge of an accident is number the same thing as the knowledge of an offence, that is of a breach which is made penal. Therefore, the date of numberice of the accident can in numbercircumstance be regarded as a starting 1 1932, 60 Cal. 1 6 PC 2 1935, 57 All. 242 PC . A.I.R. 1958 Bombay 243., point for the companymencement of limitation. The expiry of two months from the date of numberice cannot, for the same reason be regarded as a starting point of limitation. No doubt, had the inquiry been made earlier the fact of the companymission of the breach or offence would have companye to the knowledge of the Inspector earlier. But section 79 ii does number say that the date on which an Inspector would or ought to have acquired knowledge of the companymission of an offence had he been diligent or had he companyplied faithfully with the provisions of the Act, would also be a starting point of limitation. In the circumstances, therefore, the delay in making the inquiry however irregular or deplorable cannot affect the question of limitation. As Section 106 makes the date of knowledge of the companymission of the offence the starting point of the period of limitation, we find it difficult to read the section so as to make the date on which the Inspector would or ought to have acquired knowledge of the companymission of the offence had he been diligent, the starting point of limitation especially where, as here, the statute does number provide for an inquiry into the accident, much less the period within which the inquiry has to be made. It is only in the jurisprudence of Humpty Dumpty that we can equate the date on which the alleged offence came to the knowledge of an Inspector with the date on which the alleged offence ought to have companye to his knowledge. We think that the High Court was right in its companyclusion.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 88 of 1972. Appeal by special leave from the judgment and order dated January 24, 1972 of the Bombay High Court in Criminal Revi- sion Application No. 9 of 1972. C, Bhandare, R. Nagaratnam, P. H. Parekh and S. Bhandare, for the appellant. H. Hingorani and K. Hingorani, for respondent No. 1. D. Sharma, for respondent No. 2. The Judgment of the Court was delivered by KHANNA, J. This appeal by special leave is directed against the judgment of Bombay High Court whereby that companyrt set aside an order of acquittal made against the appellant in two cases and directed the trial magistrate to proceed with those cases in accordance with law. Parmanand Jhaveri respondent No. 1 filed two companyplaints before the companyrt of the Presidency Magistrate Girgaum against Ramesh Chandra J. Thakkar appellant and B. K. Shah on the allegation that the two accused persons had companymitted offences under section 420 Indian Penal Code and section 13 of the Maharashtra Ownership of Flats Regulation of the Promotion of Construction, Sale, Management and Transfer Act, 1963 Act 45 of 1963 hereinafter referred to as the Maharashtra Act . In one of the companyplaints it was stated that the accused had agreed to sell two flats to the companyplainant, while in the second companyplaint there was a similar allegation regarding agreement on the part of the accused to transfer a third plot. The agreement, it was stated, had been entered into on February 11, 1967 and the possession of the flats was to be delivered to the companyplainant on December 31, 1967. According further to the companyplainant, the accused persons in spite of having received Rs. 28,000 from him had number delivered possession of the flats to the companyplainant. B. K. Shah accused companyld number be traced and the two companyplaint cases proceeded only against the appellant. The following charges were framed against the appellant on April 2, 1970 I do hereby- charge you as follows Failed to make full and true disclosure of the nature of his tide to the land on which he intended to companystruct the flats Failed to get the written agreements in respect of flats registered under the Indian Registration Act. That you induced the companyplainant to part with Rs. 28000 on false and dishonest representation that you would companystruct flats at Malad and give him three flats of certain area in his possession and thereby companymitted an offence punishable under section 3 and 4 R W. Section 13-14 Maharashtra Ownership Flats Act and section 420 of the Indian Penal Code and within my companynisance. On April 30, 1970 after some evidence had been recorded, the trial magistrate passed the following order The parties at this stage put in an agreement whereby the accused undertakes to do certain things within a certain period and-on such undertaking the companyplainant does number wish to proceed with the trial. The accused agreed to the agreement and the case is companypounded and accused acquitted. On August 17, 1970 respondent No. 1 filed an application be- fore the trial magistrate stating that though the appellant had undertaken to deliver possession of the flats by a certain date or to pay back the amount in cash, the said undertaking had number been fulfilled. Prayer was made that action be taken against the appellant for companytempt of companyrt. The trial magistrate passed an order on January 25, 1971 wherein it was stated that the appellant had gone back on his undertaking given to the companyrt and as such was guilty of companytempt of companyrt. The magistrate accordingly directed that papers be sent to the High Court for appropriate action against the appellant. When the matter came up before the High Court, the learned judges companystituting the Division Bench took the view that it was number a fit case in which act-ion under the Contempt of Courts Act was called for against the appellant. At the same time, the learned judges took the view that it was a fit case in which the order of acquittal made against the appellant should.be set aside. Before that, on an earlier date of hearing, numberice had been given to the appellant to show cause why the order, of acquittal should number be set aside. The High Court companysequently set aside the order of acquittal and directed the trial magistrate to proceed with the trial in both the companyplaint cases from the stage at which respondent No. 1 had been persuaded to number press-the companyplaints. After hearing Mr. Bhandare on behalf of the appellant, Mr. Hingorani on behalf of respondent No. 1 and Mr. Sharma on behalf of the State of Maharashtra, we have companye to the companyclusion that the present appeal is bereft of any merit. It would appear from the resume of facts, given above that companyplaints against the appellant related to two kinds of offences, viz, section 420 Indian Penal Code and section 13 of the Maharashtra Act. So far as the offence under section 420 Indian Pental Code is companycerned, it is companypoundable with the permission of the companyrt. The offence under section 13 of the Maharashtra Act is, however, number companypoundable either with or without the permission of the Court. According to sub-section 7 of section 345 of the Code of Criminal Procedure, numberoffence shall be companypounded except as provided by this section. The word offence has been defined in clause o of section 4 1 of the Code to mean any act or omission made punishable by any law for the time being in force. Clause c of section 2 of the Maharashtra Act gives the definition of the word promoter as under c promoter means a person who companystructs or causes to be companystructed a block or building of flats for the purpose of selling some or all of them to other persons, or to a companypany, companyperative society or other association of persons, and includes his assignees and where the person who builds and the person who sells are different persons, the term includes both, Clause a of sub-section 2 of section 3 of the Maharashtra Act provides that a promoter who companystructs or intends to companystruct a block or building of flats shall make full and true disclosure of the nature of his title to the land on which the flats are companystructed, or are to be companystructed such title to the land as aforesaid having been duly certified by an Attorney-at-law, or by an Advocate of number less than three years standing. Section 4 of the above mentioned Act reads as under Notwithstanding anything companytained in any other law, a promoter who intends to companystruct or companystructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall, before he accepts any sum of money as advance payment deposit, which- shall number be more than 20 per cent of the sale price, enter into a written agreement for sale with each of such persons who are to take, or have taken such flats and the agreement shall be registered under the Indian Registration Act 1908 and such agreement shall companytain the prescribed particulars and to such agreement there shall be attached, such documents or companyies thereof, in respect of such matters, as may be prescribed. Section 13 of the Maharashtra Act which deals with offences by promoters is in, the followings words Any promoter who, without reasonable excuse, fails to companyply with or companytravenes any provision of this Act or of any rule made thereunder shall, where numberother penalty is expressly provided for, on companyviction, be punished with imprisonment for a term which may extend to one year or with fine which may extend two thousand rupees, or with both and a promoter who companymits criminal breach of trust of any amount advanced or deposited with him for the purposes mentioned in section 5 shall, on companyviction, be punished with imprisonment for a term which may extend to four years, or with fine, or with both. It would follow from the perusal of the above mentioned pro- visions that a promoter who without reasonable excuse fails to companyply with or companytravenes the provisions of sub-section 2 a of section 3 or section 4 of the Maharashtra Act would be guilty of an offence under section 13 of that Act and be liable to be punished accordingly. The allegations against the appellant were that he ,as guilty of the offence under section 13 of the- Maharashtra Act because of the companytravention of section 4 and subsection 2 a of section 3 of the said Act. As the said offence was number companypoundable with or without the, permission of the companyrt, the order of the trial magistrate, in our view, in acquitting the accused because of the companyposition of the offences cannot be said to be in accordance with law. In the case of K. Chinnaswamy Reddy v. State of Andhra Pradesh 1 this Court mentioned the circumstances under which an order of acquittal can be set aside in revision by the High Court and observed in this companytext We may however indicate some cases of this kind, which would in our opinion justify the High Court in interfering with a finding of acquittal in revision. These cases may-be where the trial companyrt hag numberjurisdiction to try the case but has still acquitted the accused, or where 1 1963 3 S. C. R. 412. the trial companyrt has wrongly shut out evidence which the prosecution wished to produce, or where the appeal companyrt has wrongly held evidence which was admitted by the trial companyrt to be inadmissible, or where material evidence has been overlooked either by the trial companyrt or by the appeal companyrt, or where the acquittal is based on a companypounding of the offence, which is invalid under the law. These and other cases of similar nature can properly be held to be cases of exceptional nature, where the High Court can justifiably interfere with an order of acquittal and in such a case it is obvious that it cannot be said that the High Court was doing indirectly-what it companyld number do directly in view of the provisions of section 439 4 It would follow from the above that where an acquittal is based on the companypounding of an offence and the companypounding is invalid under the law, the acquittal would be liable to be set aside by the High Court in exercise of its revisional powers. As the acquittal of the appellant by the trial companyrt in the present case was based upon the companypounding of an offence which was number companypoundable, the High Court in our view rightly set aside the acquittal of the appellant. It is numberdoubt true that the High Court acted suo motu in setting aside the acquittal of the appellant, but that fact would number show that there was any irregularity in the procedure adopted by the High Court. The opening words of section 439 of the Code of Criminal Procedure, viz, In the case of any proceedings the record of which has been called for by itself or which has been reported for orders or which otherwise companyes to its knowledge, as observed by this Court in the case of The State of Kerala v. Narayani Amma Kamala Devi 1 produce the result that revisional jurisdiction can be exercised by the High Court by being moved either by the companyvicted person himself or by any other person or suo motu on the basis of its own knowledge derived from any source whatsoever without being moved by any person at all. All that is necessary to bring the High Courts powers of revision into operation is such information as makes the High Court think that an order made by a Subordinate Court is fit for the exercise of its powers of revision. Mr. Bhandare has argued that even if the acquittal of the appellant for the offence under section 13 of the Maharashtra Act companyld be set aside by the High Court on the ground that the said offence companyld number be legally companypounded, the High Court should number have interfered with the acquittal in so far as it related to an offence under section 420 Indian Penal Code. In this respect we 1 1962 Supp. 3 S. C. R. 943. find that an offence under section 420 Indian Penal Code can be companypounded only with the permission of the companyrt. No order granting such permission has been brought to our numberice. Even if we were to assume that such permission was granted, as submitted by Mr. Bhandare, we do number know the precise language in which the order granting permission was companyched. In the absence of the companyy of that order, it is difficult to predicate as to whether the magistrate would have granted the permission to companypound the offence under section 420 Indian Penal Code if he was aware that the offence under section 13 of the Maharashtra Act was number companypoundable and the case in any event would have to be pro- ceeded with so far as the latter offence was companycerned. All the same it appears that the said permission war, one indivisible per. mission for the offences under section 420 Indian Penal Code and section 13 of the Maharashtra Act. As numbervalid permission companyld be granted for the companypounding of an offence under section 13 of the Maharashtra Act, the permission would have to be held to be invalid in its entirety. It is number permissible in, such an event to sever the permission into two parts and to uphold it so far as the offence under section 420 Indian Penal, Code is companycerned and hold it to be invalid in respect of the offence under section 13 of the Maharashtra Act. The appeal companysequently fails and is dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1222 of 1967. 15-L521Sup.CI/73 1044 Appeal by special leave from the judgment and order dated September 3, 1965 of the Patna High Court in M. J. Case No. 1257 of 1964. P. Singh for the appellant. C. Agarwal, V. J. Francis and P. D. Sharma for the respondents No. 1-6, 8 9. The Judgment of the Court was delivered by DUA, J. This appeal is by special leave and is directed against the order of the High Court of Judicature at Patna dated September 3, 1965 dismissing the appellants writ petition. The appellant, a teacher of Araria Higher Secondary School was dismissed from service by the Managing Committee of the said school at a meeting held on February 27, 1958 on a charge of misappropriation of school money. On appeal by him the President of the Board of Secondary Education, set aside the order of dismissal by order dated April 22, 1960 and directed his reinstatement in service. By the same order of reinstatement a further direction was given that the appellant should be paid full salary, men allowance and increment from the date of his suspension till the date of reinstatement after adjusting the amount already paid. When this order was received by the Managing Committee it was obeyed so far as the reinstatement of the appellant is company- cerned but the Managing Committee requested the President of the Board of Secondary Education to review the whole matter especially with regard to the payments for the period of suspension. The President by his order dated February 25, 1961, reviewed the matter and modified his earlier order made on appeal by providing that the appellant would be entitled only to subsistence allowance for the period of his suspension. That decision was companyveyed by the Secretary, Board of Secondary Education to the District Education Officer in letter number 2799-100-1 dated February 25, 1961 which reads - With reference to your letter No. 957, dated 29th July, 1960, I have, under orders of the President to say that you direct the Managing Committee of the Araria High School, to treat the period during which Shri Sayeed-ur-Rahman remained off duty, as period of suspension and pay him subsistence allowance according to the rules. It is number disputed before us that this order was made without affording the appellant any hearing. After the said order the appellant is said to have made several representations to the President the Board but reconsideration of the order dated February 25 1045 1961, was declined and it was reiterated that the appellant was entitled only to subsistence allowance during the period of suspension. That order was companyveyed by the Secretary, Board of Secondary Education to the appellant as per companymunication number 233/4A-97-58 dated January 18, 1964 which reads With reference to your representation dated 27th December, 1963, 1 have to state that the President Board of Secondary Education, Bihar had been pleased to order that Shri Sayeedur Rehman should be paid subsistence allowance only during his suspension period. The order cannot be revised number. It is number disputed that this order was also made without affording any hearing to the appellant. The appellant thereupon filed an application under Arts. 226 and 227 of the Constitution in the High Court of Judicature at Patna in which it was companytended on his behalf that the President of the Board of Secondary Education companyld number modify the earlier order dated April 22, 1960 without giving to the petitioner an adequate opportunity of being heard. The High Court companysidered this argument to be without merit, because according to an earlier Bench decision of the High Court in Liladhar Jha v. Board of Secondary Education, Patna 1 , the President of the Board of Secondary Education, as appellate authority, was empowered only to direct reinstatement of a dismissed teacher and had numberjurisdiction to make any order with regard to the payment of any arrears due to him. Though the companyrectness of this decision was questioned before the High Court by the companynsel representing the appellant in that Court the Bench hearing the writ petition did number companysider it to be a fit case for reference to a larger bench to re-examine the view taken in the case of Liladhar Jha supra . On this view the High Court held the order of the President of the Board of Secondary Education dated April 22, 1960 directing payment of full salary, dearness allowance and increment to the petitioner from the date of his suspension till the date of reinstatement to be invalid. Having so hold the High Court proceeded to observe that the petitioner would gain numberhing if it was further held that the subsequent order of the President dated January 18, 1964 modifying the earlier order of April 22, 1960 was held invalid on the ground that numberopportunity of hearing was given to the appellant. This question, in the opinion of the High Court, had become some- what academic because the appellant companyld number get any relief in that writ petition. Before us on behalf of the appellant it was strenuously company- tended that the appellant had approached the High Court with his. 1 1963 B.L.J.R. 880. 1046 grievance only against the order made by the President of the Board reviewing his earlier order dated April 22, 1960 without hearing the appellant and that being the only relief claimed by him, if the said order of review was unconstitutional having been made to the appellants prejudice without affording him an adequate opportunity of being heard then the High Court companyld number decline him the relief of declaring it to be invalid, on the sole ground that the earlier order which was number challenged by the petitioner in those proceedings and had number been got quashed by the Managing Committee in any appropriate proceedings being companytrary to law on the basis of Liladhar Jha supra , it would be somewhat academic to declare as invalid the review order impugned by the appellant before that Court. According to the appellant so long as the order of the Board of Secondary Education reviewing the earlier order of April 22, 1960 was number expressly declared to be invalid, the Managing Committee or Araria Higher Secondary School was number likely to pay to him the arrears of salary due to him as a result of the order of his reinstatement in service. In this companynection the appellants learned companynsel drew our attention to r. 18 of the rules governing the service companyditions of teachers in number-Govermnent High Schools framed as per Government resolution dated September 7, 1955. This rule reads In case the Managing Committee violates these rules or fails to carry out the orders and instructions of the Board of Secondary Education, or give effect to the decisions of the Board, the Board shall have the right to withdraw recognition of the school or suspend the grant or take such other action or actions as it may think fit. According to the submission, the Managing Committee is bound to carry out the orders and instructions of the Board and if the orders dated February 25, 1961 and January 18, 1964 are number quashed the Managing Committee may feel reluctant to ignore them. Our attention was also drawn to r, 12 2 . Rule 12 provides The Managing Committee may impose the following punishment on any member of the staff including those on probation after having finally companysidered his explanation and the charges levelled against him in writing Warning, ii Censure, iii Withholding of numbermal increments, iv Discharge, V Dismissal. Note.- 1 Proceedings are to be started against teachers companycerned by the Secretary on the report of the Headmaster or by the President, on the report of the Secretary, or by the President himself, or by the Manag- 1047 ing Committee as a whole. Ordinarily the Managing Committee as a whole has the power to suspend the teacher but in cases of urgency, the Secretary in companysultation with the President may suspend a teacher but this bust be approved by the Managing Committee within a fortnight. Charges must be handed to the teacher in writing within two days of the suspension order. The teacher companycerned must submit his explanation within seven days of the receipt of the charges. A meeting of the Managing Committee shall be companyvened within a fortnight from the date of suspension order, for which a clear seven days numberice shall be given to every member. Such meetings should have a quorum of two-third of the total number of members that is, eight members . If the teacher member or the Headmaster himself is involved, he shall number attend the meeting. Orders of discharge or dismissal shall be valid only if they have been passed by the Managing Committee. In numbercase, however, shall a teacher be kept, under suspension for a period exceeding 30 days or in case he, has filed an appeal up to two months or till the disposal of his appeal. During the period of suspension the teacher shall be allowed to draw half his salary plus dearness allowance and upon exoneration, the balance shall be paid to him. On behalf of the respondents Shri S. C. Agarwal appearing for the State of Bihar and the Board of Secondary Education, did number challenge the view taken by the Patna High Court in the case of Liladhar Jha supra . He tried to justify the impugned order only on the reasons stated by the High Court. In our opinion on the facts and circumstances of this case it was incumbent on the High Court to declare as invalid, the order of the President of the Board of Secondary Education dated February 25, 1961 reviewing the earlier order dated April 22, 1960, without affording to the appellant any opportunity of being heard, ,and also his order dated January 18, 1964. The appellant had approached the High Court with a grievance against that order and the order dated April 22, 1960, which was in his favour, was advisedly number challenged by him. To decline to the appellant the relief claimed by him to which, according to the High Courts own reasoning, he was without doubt entitled, on the mere ground that it would be academic to do so, seems to us to be highly unfair and unjust to the appellant, because. as represented before us the Managing Committee might well take a different view and feel that the orders passed by the President of the Board of Secondary 1048 Education, reviewing the earlier order dated April 22, 1960 having number been specifically quashed and set aside by the High Court, are still operative, demanding companypliance. Under r. 18 and S. 5 of the Bihar High Schools Control and Regulation of Administration Act Bihar Act XIII , 1960 the Managing Committee is expected to obey the directions of the Board. It may also be pointed out that under S. 6 of the above Act orders of the Board are final. It is number stated before us that the order dated April 22, 1960 was ever got set aside by the Managing Committee or even assailed by it in appropriate proceedings, but we express numberconsidered opinion on that question, the same having number been can- vassed before us. In our view, the only just and fair order to be made in these proceedings is to allow this appeal, set aside the impugned order of the the Court as also the order made by the President of the Board of Secondary Eduaction dated February 25, 1961 reviewing his earlier order dated April 22, 1960 along with the subsequent order of the President of the Board dated January 18, 1964 rejecting the appellants representation and reiterating the order that he should be paid subsistence allowance only during his sus- pension period. After setting aside these orders the position is that the parties are relegated to the stage immediately prior to the order dated February 25, 1961, with the result that the President of the Board of Secondary Education would number have to deal with and dispose of in accordance with law, the request of the Managing Committee of Arari Higher Secondary School for re-considering the order of April 22, 1960. If the Board deems it proper to reconsider that order then the appellant must be afforded a reasonable opportunity of hearing and of adequately representing his case. Rule 16 provides for appeal from the orders made under r. 15, and r. 17 provides for hearing the appellant and the Secretary of the Managing Committee. Rule 17 reads The appeal of the person companycerned shall be heard by the President of the Board of Secondary Education or any member of the Board of Secondary Education duly numberinated by the President or any officer ordinarily number below the rank of Inspector of Schools. The appellant the Secretary of the Managing Committee may be heard in person by the President, Board of Secondary Education or his numberinee who may even authorise them to be represented by a representative. This rule embodies the principle of natural justice requiring the appellate authority to hear the parties. The order dated April 22, 1960 must have, therefore, beer. made after hearing both sides as provided by this rule. There is numberexpress provision for review in the rules to which our attention was drawn. But we are number asked and, therefore, number required to express any companysidered opinion on 1049 the companypetence of review and we express numbere. We are, however, clear that if the order dated April 22, 1960 is to be reconsidered then the appellant must be afforded adequate opportunity of hearing and presenting his case. This unwritten right of hearing is fundamental to a just decision by any authority which decides a companytroversial issue affecting the rights of the rival companytestants. This right has its roots in the numberion of fair procedure. It draws the attention of the party companycerned to the imperative necessity of number overlooking the other side of the case before companying to its decision, for numberhing is more likely to companyduce to just and right decision than the practice of giving hearing to the affected parties. The President of the Board of Secondary Education would be deciding a companytroversy affecting the rights of the parties before him if and when he chooses to reconsider the order dated April 22, 1960, whatever be the source of his power to do so-a point left open by us. He is required to decide in the spirit and with a sense of responsibility of a tribunal with a duty to meet out even-handed justice. The appellant would thus be entitled to a fair chance of presenting his version of facts and his submissions on law as his rights would be directly affected by such proceeding. The omission of express requirement of fair hearing in the rules or other source of power claimed for reconsidering the order dated April 22, 1960 is supplied by the rule of justice which is companysidered as an integral part of our judicial process which also governs quasijudicial authorities when deciding companytroversial points affecting fights of parties. We also express numberopinion on the question of the companyrectness or otherwise of the view taken by the Patna High Court in the case of Liladhar Jha supra number do we express any opinion about the the and effect of r. 12 2 referred to above or of any other rule or rules which may be attracted to the appellants case. Indeed, this order is number to be companystrued as companytaining any opinion on the merits of the companytroversy except that the aforesaid orders of the President made in 1961 and 1964 have been quashed. The appellant is entitled to his companyts from the companytesting respondents. On facts of C.M.P.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 993 of 1967. Appeal by certificate from the judgment and order dated March 31, 1967 of the Madras High Court in Writ Petition No. 1743 of 1964. 97 5 Govind Swaminandan, Advocate-General of Tamil Nadu, S. Moha n, S. Sivan, K. Rajendra Choudhry and K. R. Choudhry, for the appellant. Thiagarajan, for respondent No. 1. R. Choudhry, for respondent No. 2. R. Somnatha Iyer and S. Lakshminarasu, for interveners Nos. 1-3. M. Tarkunde and B. D. Sharma, for interveners Nos. 1-3. N. Choudhry, for intervener No. 5. Syed Mahamud, and A. G. Pudisssery, for intervener No. 5. K. Sinha, S. K. Sinha and B. P. Sinha, for intervener No. 7. S. Raman and Vineet Kumar, for intervener No. 8. V. Gupte, A V. Diwan, P. C. Bhartari, J. B. Dadachanji, C. Mathur and Ravinder Narain, for intervener No. 9. Subba Rao, for intervener No. 10. The Judgment of the Court was delivered by SIKRI, C. J.-This appeal, by certificate granted by the High Court, is directed against tin judgment dated March 31, 1967 of the High Court of Madras, in Zenith Lamps and Electricals Ltd. v. The Registrar, High Court, Madras given in Writ Petition No. 1743 of 1964 and Writ Petition No. 3891 of 1965 . Messrs Zenith Lamps and Electrical Limited, respondent before us and hereinafter referred to as the petitioner, intended to file a suit in the Madras High Court, on the original side, claiming a relief valued at Rs. 2,06,552, against the Revenue. The petitioner filed Writ Petition No. 1743 of 1964 on the question of companyrt-fee payable on the intended suit, praying that the High Court may be pleased to issue a writ of mandamus or other direction order declaring Rule I of the High Court Fees Rules, 1956, and the provisions of the Madras Court Fees and Suits Valuation Act Madras Act XIV of 1955 to be invalid and ultra vires insofar as they relate to the levy of fees on ad valorous scale. It was companytended that Rule 1 of the High Court Fees Rules, 1956, was void and ultra vires because the Madras Court Fees and Suits Valuation Act XIV of 1955 which had been applied in these Rules was void and ultra vires. Various reasons were given in the petition for alleging that the impugned Rule was void. It was stated inter alia that there was numberjustification at all for the increase of companyrt-fees in 1955 and 1956 on the basis of civil I.L.R. 1968 1 Mad. 247 9 7 6 litigants being made to pay fees companyering the expenditure on civil litigation. It was alleged that whenever an increase is companytemplated, it is for the authority to justify by facts and figures such increase by showing that actual expenditure at the time exceeds the fee income. The petitioner alleged that judged by this test, the increases of 1955 were without any legal or actual jurisdiction. It was further alleged that the State was proceeding on the basis that the companyrt- fees had to companypensate the Government both for the companyt of civil as well as criminal administration, which was unwarranted. In ground D it was alleged From the figures of 1963-64 available from the budget for 1964-65, it is seen that the fees levied exceeds the companyt of administration of civil justice. The figures have further to be scrutinised and amended so that in- admissible items such as fees of Governments Law Officers are eliminated as it is number the duty of litigant public generally to bear the expense of the, States Law Officers. In ground E it was alleged that it was ultra viresand inequitable to levy an ad valorem fee without lit from the petitioner in a single proceeding. Various other reasons were given but it is number necessary to set them out. The State filed an affidavit in reply maintaining that Rule 1 of the High Court Fees Rules, 1956, and the Madras Court Fees and Suits Valuation Act, 1955 Madras Act XIV of 1955 were legal and valid. It was stated that the rates of fees prescribed under the Court Fees Act of 1955 were number excessive and that the levy did number amount to a tax on litigants. The State gave figures to show that the expenditure on the administration of justice was higher during the year 1954-55 than the fees realised. The State rebutted the companytention that the companyt of criminal administration and the fees paid to Government law Officer should number be taken into account in justifying companyrt fees. This affidavit was filed on March 6, 1965. It appears that a supplemental companynter-affidavit on behalf of respondents 2 and 3 was filed on October 11, 1966. In this affidavit various statements were given to show that the expenditure on the administration of justice was higher than the receipts. The Petitioner took objection to the filing of the supplemental companynter-affidavit at that stage because it was filed after the arguments had started. It was companytended that the figures given in the companynter-affidavit would require drastic scrutiny. It was also 97 7 alleged that various inadmissible items had been taken into account for example, the expenditure on law officers had been taken into companysideration. The High Court struck down the levy found in Article I of Schedule 1 of the Madras High Court Fees and Suits Valuation Act, 1955, in its application to the High Court. As it was number companytended before the High Court that the result of striking down article 1 of schedule 1 in its application to the High Court would necessitate the declaration of the invalidity of the entire Court Fees Act, it refrained from examining the position. The State having obtained certificate of fitness filed the appeal which is number before us. We may mention that the petitioner was number interested in pursuing the appeal and it prayed that if the appeal is decided against it numberorder may be made against it for companyts in the circumstances of the case. We issued numberice to the Advocates-Goneral and a number of States have appeared before us. The first question that arises out of the arguments addressed to us is What is the nature of fees taken in companyrt in entry 3 List II Schedule VIII of the Constitution ? Are they taxes or fees or are they sui generis ? It is necessary that there should number companyrelationship between fees taken in Court and the companyt of administration of civil justice? Dr. Syed Mohammed has on behalf of the State of Kerala urged that fees taken in Court are taxes simpliciter. The Advocate-General of Madras had urged that they are sui generis, and that they are more in the nature of taxes than in nature of fees. Mr. Tarkunde has urged that it would be wrong to regard them as fees of the same nature as fees in Entry 65 List II. The answer depends on the companyrect interpretation of various entries in the three Legislative Lists and several articles of the Constitution. In the background must be kept the history of fees taken in Courts in the past both in England and India. Let us first look at the background. According to Holds- worth 1 the Judges, from the first, were paid salaries by the Crown which in the companyrse of years were increased. But from the earliest times, the salaries of the Judges had number formed their only source of income. Though they did number hold their offices as their freeholds, though they companyld be dismissed by the Crown, they nevertheless drew a companysiderable part of their income from fees. When the income of the Judges from fees was taken away in 1826 their salaries were raised from pound 2400 a year to pound 5500. History of English Law-W.S. Holdsworth-seventh Edn. vol., 1, page 252-254. As far as the officials of the companyrts were companycerned the earliest information which we get about the officials of the companyrts of companymon law shows that they were paid almost entirely by fees. In fact it would be true to say that the official staff of all the central companyrts except the Lord Chancellor and the judges was almost entirely self- supporting. But probably the largest part of the remuneration of the official staff of the companyrts came from fees in companynection with the very numerous acts that must be done to set and keep in motion the companyplicated machinery of the companyrts,, from the issue of the original writ to the execution of final judgment. Holdsworth-P. 256 In the- Dictionary of English Law by Earl Jowitt Vol. 1 P. 791 it is stated Fees, perquisites allowed to officers in the administration of justice as a recompense for their labour and trouble, ascertained either by Acts of Parliament, by rule or order of companyrt, or by ancient usage, in modern times frequently companymuted for a salary, e.g. by the Justice Clarks Act, 1877. Although, however, the officers of a companyrt may be paid by salary instead of the fees, the obligation of suitors to pay fees usually remains, these fees being paid into the fund out of which the salaries of the officers are defrayed. In the Supreme Court they are companylected by means of stamps under the Judicature Act, 1875, s. 26, and order of 1884, and the Supreme Court Fees Order, 1930 as amended . The mode of companylecting fees in a public office is under the Public Office Fees Act, 1879 repealing and replacing, the Public Office Fees Act, 1866 , by stamps or money, as the Treasury may direct. At present the Lord Chancellor has also power, with the companysent of at least three judges of the Supreme Court and the companycurrence of the Treasury, to fix fees to be, taken in the High Court and the Court of Appeal or in any companyrt created by the companymission. Under the powers referred to, the Rules of the Supreme Court, 1883 and the Supreme Court Fees Order, 1.930, were made 1 . The English history shows that a very close companynection existed between fees and companyt of administration of civil justice. In the beginning, they were directly appropriated by the companyrt officials. The existing law shows that fees are number taxes. It is number usual to delegate taxing powers to judges. 1 vide Halsburys Laws of England, Vol. 9 p. 422-423. 97 9 In India according to the Fifth Report on East India Affairs Vol. 1 1812 , chapter, The civil companyrts of Justice,, the chouthay or fourth part of the value of property recovered in a companyrt of judicature, seems to be companysidered in most parts of the Indian Peninsula as the companypensation or fee due to the ruling power for the administration of justice. This was abolished on the accession of the British power to the Government of Bengal, and in lieu of it, the introduction of a small percentage on the institution of a suit has been numbericed. The first legislative measure which has been brought to our numberice is the Bengal Regulation XXXVIII of 1795. In the preamble, it is stated that the establishing of fees on the institution and trial of suits, and on petitions presented to the companyrts was companysidered the best method of putting a stop to the abuse of bringing groundless and litigious suits. There are various sections of the- Regulation which allow fees to be appropriated by the Judges. In action II 4 it was laid down The Munsiffs are to appropriate the fees they may companylect under this section, to their own use, as a companypensation for their trouble and an indemnification for the expense which they may incur in the execution of the duties of their office. Similarly under section 111 6 , the Register was entitled to appropriate the fees, companylected under this section. Similarly subsection 7 of section III enabled the Commissioners to appropriate the fees. But fees under section IV to be paid on the trial of suits, tried in the first instance by the Judges of the Zillah and City Courts or by their Registers were to be carried to the account of Government. Similarly various other fees were carried to the account of Government. In the preamble to Bengal Regulation VI of 1797, the object is stated to be to discourage litigations, companyplaints and the filing of superfluous exhibits and the summoning of unnecessary witnesses on the trial of suits and also to provide for deficiency which would be occasioned in the public revenue by abolition of the police tax as well as to add eventually public resources, without burdening individuals. The same object of discouraging litigation is stated in clause 1 of the Bombay Regulation VIII of 1802. In the Statement of Objects and Reasons for the Court Fees Bill, 1869, it is stated that the experience gained of their stamp fees working during the two years in which they have been in force, seems to be companyclusive as to their repressive effect on the general litigation of the companyntry. It is, therefore, thought expedient to make a general reduction in the rates number chargeable on 11-L499Sup.C.I./73 98 0 the institution of Civil suits, and to revert to the principle of maximum fee which obtained under the former law. Later it is stated As some measure of companypensation for the loss of revenue which is expected to result from the general reduction of is proposed to discontinue the refund of any portion of the amount levied on the first institution of suits, and also to raise the heretofore chargeable on probates and letters of administry granted under the Indian Succession Act, and on certificates issued under Act XXVII of 1860, to the ad valorem rates leviable under the English law in like cases. The Bill was designed to companytain in one enactment the were of the existing law relative to fees leviable in all Courts of Justice, whereas previously fees were, leviable under various acts. This brief resume of the history shows that the companyrt fees was levied sometimes with the object of restricting litigations so times with the object of increasing revenue. But there is material to show that when the latter was the objective when the companyt of administration of civil justice was more than the fees levied and companylected. The companystitutional question with which we are companycerned companyld number arise before the enactment of the Government of In Act, 1935, because even if fees taken in companyrts were taxes litigation, there was numberbar to the levy of taxes on litigation. Various judges have spoken about the nature of companyrt fees In the judgment under appeal 1 , reference has been made their observations but those Judges were number faced with the companytitutional problem with which we are companycerned. Some described fees as one form of taxation, some regarded it as taxes for s vices rendered by the companyrt or work done by the companyrt or as price payable to Government for the trial of the suit. This background does number supply a sure touchstone for the determination of the question posed in the beginning of judgment, but it does show that fees taken in companyrt were number levied as taxes and the companyt of administration was always one of factors that was present. In its origin in England fees were meant for officers and judges. In India indeed section 3 of the Court Fees Act, 1870 mentions fees payable for the time being to the clerks and officers. Section 15 of the Indian High Court Act, 1861, also spoke of fees to be allowed to sheriffs and all clerks and officers of Court. We will therefore have interpret the relevant Entries and various Articles of the Constitu- tion in order to ascertain the true nature of Court fees. The relevant Entries of the Constitution are List I Entry 77 Constitution, organisation, jurisdiction and power of the Supreme Court including companytempt of such Court , and the fees taken therein persons entitled to practise before the Supreme Court. List I Entry 96 Fees in respect of any of the matters in this List, but number including fees taken in any Court. List II Entry 2 Administration of justice companystitution. and organisation of all companyrts, except the Supreme Court and the High Court, officers and servants of the High Court procedure in rent and revenue companyrts fees taken in all companyrts except the Supreme Court. List II Entry 66 Fees in respect of any of the matters in this List, but number including fees taken in any companyrt. List III Entry 13 Civil procedure, including, all matters included in the Code of Civil Procedure at the companymencement of this Constitution, limitation and arbitration. List III Entry 47 Fees in respect of any of the matters in this List, but number-including fees taken in any companyrt. It will be numbericed that the fees taken therein i.e. in Supreme Court in List I Entry 77 have been excluded from List I Entry 96. Similarly the fees taken in all companyrts included in List 11 Entry 3 have been excluded from List 11 Entry 66. In List III Entry 47 fees taken in any companyrt have been excluded. What is the significance of this exclusion ? Does the Constitution regard fees taken in companyrt as being different from fees leviable under List I Entry 96, List II Entry 66 and in List III Entry 47? It seems to us that the, separate mention of fees taken in companyrt in the Entries referred to above has numberother significance than that they logically companye under Entries dealing with administration of justice and companyrts. The draftsman has followed the scheme designed in the Court Fees Act, 1870 of dealing with fees taken in companyrt at one place. If it was the intention to distinguish them from fees in List 11 Entry 66, surely some indication would I have been given by the language employed. If these words had number been separately mentioned in List 1 Entry 77 and List 11 Entry 3, the companyrt fees would still have been levied under List I Entry 96 and List H Entry 66. it seems plain that fees taken in companyrt are number taxes, for if it were so, the word taxes would have been used or some other indication given. It seems to us that this companyclusion is strengthened by two companysiderations. First, taxes that cart be levied by the Union are mentioned in List I from Entry 82 in List II taxes that can be imposed start from Entry 45. Secondly, the very use of the words number including fees taken in any companyrt in Entry 96 List 1, and Entry 66 List 11 shows that they would otherwise have fallen within these Entries. It follows that fees taken in Court cannot be equated to Taxes. If this is so, is their any essential difference between fees taken in Court and other fees.? We are unable to appreciate why the word fees bears a different meaning in Entries 77 List 1 and Entry 96 List 1 or Entry 3 List 11 and Entry 66 List 11. AR these relevant cases oil the nature of fees were reviewed in The Indian Mica and Micanite Indus tries Ltd. v. The State of Bihar and others 1 by Hegde, J. and the observed From the above discussion, it is clear that before any levy can be upheld as a fee, it must be shown that the levy has reasonable companyrelations with the services rendered by the Government. In, other words. the levy must be proved to be a quid pro quo for the services rendered. But in these matters it will be im- possible to have an exact companyrelationship. The companyrelationship expected is one of a general character and number as of arithmetical exactitude. But even if the meaning is the same, what is fees in a particular case depends on the subject-matter in relation to which fee are imposed. In this case we are companycerned with the administration lion of civil justice in a State. The fees must have relation to the administration of civil justice. While levying fees the appropriate legislature is companypetent to take into account all relevant factors, the value of the subject matter of the dispute, the various steps necessary in the prosecution of a suit or matter, the entiry companyt of the upkeep of companyrts and officers administering civil justice the vexatious nature of a certain type of litigation and other relevant matters. It is free to levy a small fee in some cases, a large fee in others, subject of companyrse to the provisions of Art. 14. But one thing the Legislature is number companypetent to do, and that is to make litigants companytribute to the increase of general public revenue In other words, it cannot tax litigation, and make litigations pay say for road building or education or other beneficial schemes that a State may have. There must be a broad companyrelationship wit the fees companylected and the companyt of administration of civil justice. A.T.R. 1971 S.C. 1182 at p. 1186. We may number dispose of other arguments addressed to us. We are number able to interpret the phrase fees taken in companyrt to mean that it described fees which were actually being taken before the Constitution came into force. If this was the meaning, numberfees companyld be levied in the Supreme Court because the Supreme Court did number exist before the Constitution came into force and numberfees were being taken therein. This would render part of the Entry of List I nugatory. It was urged that various Articles in the Constitution show that fees taken in Courts are taxes. For instance, by virtue of Article 266 all fees, being revenues of the State, will have to be credited to the Consolidated Fund. But this Court has held that the, fact that one item of revenue is credited to the Consolidated Fund is number companyclusive to show that the item is a Tax. In The Commissioner, Hindu Religious Endowments, Madras v Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 1 , it was held A tax is a companypulsory exaction of money by public authority for public purposes enforceable by law and is number payment for services rendered. It is number possible to formulate a definition of fees that can apply to all cases as there are various kinds of fees. But a fee may generally be defined as a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases such expenses are arbitrarily assessed. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a companymon burden, while a fee is a payment for special benefit or privilege. Our attention was invited to Art. 199 2 which provides that a bill shall number be deemed to be a Money Bill by reason only that it provides for the demand or payment of fees for licence-, or fees for services rendered. It was suggested that as Court fees were number for services rendered they would have to be levied by means of a Money Bill. It seems to us that this argument proceeds on an assumption that fees taken in companyrt are number for services rendered. Reference to Art 277 and Art. 366 28 does number throw any light on the problem before us. In The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 1 , refe- rence was made by Mukheriea, J. to Essays in Taxation by Selig- 9 84 man. We may here, refer to some other passages which have reference to companyrt fees. The distinction between fees and taxes, although sometimes ascribed to Rau, is really much older. Adam Smith already speaks of certain expenses which are laid out for the benefit of the whole society. It is reasonable, therefore, he adds, that they should be defrayed by the general companytribution of the whole society, all the different members companytributing as nearly as possible in proportion to their respective abilities. These, as he afterward explains, are taxes. On the other hand,, he speaks of certain outlays, as for justice, for persons who give occasion to this expense, and, who are, most immediately benefited by this expense. The expenditure, therefore, he thinks, m ay very properly be defrayed by the particular companytributions of these persons, that is, by fees of companyrt. And he extends this principle to tolls of roads and various other expenses. This point of view helps us out of a difficulty as to the line of cleavage between fees and taxes. Thus, if a charge is made for the companyt of judicial process, the payment is a fee, because of the special benefit to the litigant. If numbercharge is made, the companyt of the process must be defrayed by general taxation and the litigant pays his share in general taxes. If the charge is so arranged as to bring in a companysiderable net revenue to the government, the payment by the litigant is a tax number a general tax on all taxpayers, but a special tax on litigants, like the tax on law suits in some of our Southern Commonwealths. The character of fees dis- appears only secondarily because the principle of companyt is deviated from, but primarily because the special benefit to the litigant is companyverted in the first case into a companymon benefit shared with the rest of the companyniunity, and in the second case into a special burden. The failure to grasp the basis of this distinction, which is equally true of other fees, has companyfused many writers. A great deal of stress was laid by Mukherjea, J. at p. 1044 on the fact that the companylections in that case went to the Consolidated Fund. He, however, said that in itself might number be companyclusive. But as Art. 266 requires that all revenues received by the State have to go to the Consolidated Fund, number much stress can be laid on this point. Reliance was placed on two cases decided by the Privy Coun- cil. In Attorney-General for British Columbia v. Esquimalt and Nanaimo Railway Company Ors. 1 , a case from Canada, question 7 was put thus Is the Esquimalt and Nanaimo Railway liable to tax so-called for forest protection imposed by s. 123 of the Forest Act later companyrected to sec. 121 of the Forest Act in companynection with its timber lands in the island railway belt acquired from Canada in 1887 ? In particular does the said tax so called derogate from the provisions of section 22 of the Act of 1883 ? The Privy Council observed The question is a short on,--. The exemption companyferred by section 22 is given in the, words the lands shall number be liable to ta xation. There is numbercontext to give the word taxation any special meaning and the question companyes to this Is the impost charged by s. 124 of the Forest Act taxation within the ordinary sig- nificance of that word ? After examining the provisions of Pt. XI of the Act, companysisting of ss. 95 to 127, which dealt with what is described as Forest Protection, the Privy Council observed The levy has what are, undoubtedly, characteristics of taxation, in that it is imposed companypulsorily by the State and is recoverable at the suit of the Crown. This case is distinguishable because the Privy Council did number have to deal-with fees and taxes but interpreted the word taxation in section 22 of the Act to mean a companypulsory Levy by the State. Whether it was fees or taxes did number matter. The only question was whether it was a companypulsory levy. In Bachappasubran v. Shidappa Vankatrao 2 before the Privy Council for the first time objection was raised that the suit, out of which the appeal arose, was number triable by the First Class Subordinate Judge. It was argued that this was the result of provisions companytained in the Court Fees Act 1870 and the Suits Valuaation Act,, which, it was said, imposed numberional value on the property as distinct from its real value and that this numberional value was less than Rs. 5000/-. It was in this companytext that the Privy Council observed Their Lordships are of opinion that they would number be justified in assisting an objection of this type, but more than that, they hold that even the technicality on which the defendant relies cannot prevail. The Court-Fees Act was passed number to arm a litigant with a weapon of technicality against his oppo- 1 1950 A.C. 87,120,121. I.L.R. 43 Bom. 507. nent, but to secure revenue for the benefit of the, State. This is evident from the character of the Act, and is brought gut by section 12, which makes the decision of the First Court as to value final as between the parties and enables a Court of appeal to companyrect any error as to this, only where the First Court decided to the detriment of the revenue. The defendant in this suit seeks to utilise the provisions of the, Act, number to safeguard the interest of the State, but to obstruct the plaintiff he does number companytend that the Court wrongly decided to the detriment of the revenue, but that it dealt with the case without jurisdiction. We are unable to appreciate how this case assists the appel- lant. Fees and taxes are both revenue for the benefit of the State. At any rate the Privy Council was number companycerned with the interpretation of legislative Entries, where a sharp distinction is drawn between fees and taxes. Two High Courts have upheld the levy of increased companyrt fees and the learned Advocate-General strongly relied on them. In Khacharu Singh v. S.D.O. Khurja 1 , a petition under Art. 226 was presented with a fee of Rs. 5/-, while by virtue of the Court fees Uttar Pradesh Amendment Act, 1959, the fee leviable was Rs. 50/-. The latter fee was held to fall within Entry 3 List 11. Mootham C. J. held that because companyrt fees were number appropriated for any specific purpose but formed part of the general revenues of the State, these were neither tax number fees as defined in The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur MUtt 2 and Mahant Sri Jagannath Ramanuj Das v. The State of Orissa 3 . He observed It is number an exaction imposed without reference to any special benefit companyferred on the payers, for it is imposed only on those persons who wish to file documents, the filing of the document or the obtaining of the companyy being of direct benefit to the person companycerned. It would appear therefore number to be a tax as so defined. He went on to observe, and here, with respect, he made a mistake Nor clearly is it a fee as so defined if only for the, reason that the moneys realized have number been set apart but have merged in the public revenue of the State. Mukherjea, J. in. The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 2 had said that this fact was number companyclusive and in view of Art. 266 of the 3 1954 S.C.R. 1046. 2 1954 S.C.R. 1005. in Constitution, it companyld number be companyclusive. Mootham, C.J. Khacharu Singh v. S.D.O. Khurja 1 observed It clearly follows, I think, from the, fact that the fees or other money taken by the Supreme Court or a High Court are to be credited to the Consolidated Fund that such fees cannot be fees of the kind which the Supreme Court had under companysideration for an essential characteristic of such a fee is that it shall be set apart and number merged in the general revenue of the State. It accordingly appears that there exists another class of imposition, also called a fee in the Constitution which differs from the type of fee which the Supreme Court had under companysideration and that the definition of fee to he found in the three Supreme Court decisions of 1964 is number exhaustive. With respect,. the fees taken in companyrts and the fees mentioned in Entry 66 List I are of the same kind. They may differ from each other only because they relate to different subject matters and the subject matter may dictate what kind of fees can be levied companyveniently, but the overall limitation is that fees cannot be levied for the increase of general revenue. For instance if a State were to double fees with the object of providing money for road building or building schools, the enactment would be held to be void. Dayal J. companyrectly observed in Khacharu Singh v. S.D.O. Khurja 1 The expression the fees taken therein in item No. 77 of List 1 and fees taken in all companyrts except the Supreme Court in item No. 3 of List 11 need number be interpreted to refer to such fees which must be credited to a separate fund and number to the general fund of India or the State. It follows therefore that the Constitution did number companytemplate it to be an essential element of a fee-that it be credited to a separate fund and number to the Consolidated, Fund. But the High Court in Khacharu Singh v. S.D.O. Khurja 1 did number meet the argument of the learned companynsel that as the State Government was already making a very large profit out of companyrt fees, the entire amending Act of 1959 increasing those fees is ultra vires. It seems to us that whenever the State Legislature generally increases fees it must establish that it is necessary to increase companyrt fees in order to meet the companyt of administration of civil justice. As soon as the broad companyrelationship between the companyt of administration of civil justice and the levy of companyrt fees ceases, the imposition becomes a tax and beyond the companypetence of the State Legislature. I.L.R. 1960 1 All. 429, 445. The Bombay High Court in The Central Province Sindicate PR Ltd. v. The Commissioner of Income-tax, Nagpur 1 also fall into the same error. V. S. Desai, J. held that one of the essential elements laid down by the Supreme Court was the requisite of a fee, namely, that it must be appropriated to a separate fund earmarked to meet the expenses of the services has never been true of the companyrt fees at any time and is also number true of the companyrt fees levied after the companystitution The learned Advocate General, in our opinion, is right in saying that the levy of companyrt fees for general revenues has been authorised by the relevant Entries in the Legislature. What impressed the High Court was that there was however numbermonetary measure of the fees charged for the services rendered and the levy of the fees companyld also number be said to be in proportion to the services rendered. We agree with the Madras High Court in the present case that the fees taken in Courts are number a category by themselves and must companytain the essential elements of the fees as laid down by this Court. We also agree with the following observation 2 If the element of revenue for the general purposes of the State predominates, then the taxing element takes hold of the levy and it ceases to have any relation to the companyt of administration of the laws to which it relates it becomes a tax. Its validity has then to be determined with reference to its character as a tax and it has to be seen whether the Legislature has the power to impose the particular tax. When a levy is impugned as a companyorable exercise of legislative power, the State being charged with raising a tax under the guise of levying a fee, Courts have to scrutinize the scheme of the levy carefully, and determine whether, in fact, there is companyrelation between the services and the levy, or whether the levy is excessive to such an extent as to be a presence of a fee and number a fee in realilty. If, in substance, the levy is number to raise revenues also for the general purposes of the State, the mere absence of uniformity or the fact that it has numberdirect relation to the actual services rendered by the authority to each individual who obtains the benefit of the service, or that some of the companytributories do number obtain the same degree of service as others may, will number change the essential character of the levy. The next question that arises is whether the impugned impositions are fees. The learned Advocate-General companytended I.L.R. 1968 1 Mad. 247 at p. 340-341. that the State of Madras does number make a profit out of the administration of civil justice. On the companytrary it spends money on the administration of civil justice out of general revenues. He relied on the supplemental companynter affidavit filed on October 11, 1966. objection was taken on behalf of the res- pondent in the companynected civil appeals that this companynter- affidavit should number be taken into companysideration because it was filed in the companyrse of arguments and they had numberopportunity to meet the affidavit. It seems to us that we cannot dispose of this appeal without giving opportunity to the respondents to file an affidavit or affidavits in reply to the supplemental companynter affidavit dated October 11, 1966 be-cause if we take the figures as given and explained by the Advocate-General we cannot say that the State is making a profit out of the administration of civil justice. Various items both on the receipts side and the expenditure side have to be carefully analysed to see what items or portion of items should be credited or debited to the administration of civil justice. It is true, as held by the High Court, that it is for the State to establish that what has been levied is companyrt-fees properly socalled and if there is any enhancement the State must justify the enhancement. We are accordingly companystrained to allow the appeal and set aside the judgment passed by the High Court and remand the case to it.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1357 to 1359 of 1972. Appeals by certificate from the judgment and order dated January 10, 1972 of Delhi High Court at New Delhi in Civil Writ petitions Nos. 405, 381 and 486 of 1971. L. Sibal and Bishamber Lal, for the appellants in all the appeals . N. Sinha, Solicitor-General of India, G. L. Sanghi and P. Nayar, for the respondent. The Judgment of the Court was delivered by SHELAT, J. These three appeals, by certificate, arise out of three writ petitions filed in he High Court of Delhi for quashing the Sugar Price Determination Order, 1971 made under s. 3 3C of the Essential Commodities Act, 10 of 1955, and for a direction requiring the Central Government to refix the ex-factory price for 1970-71 in respect of sugar required to be sold to Government under s. 3 2 f of the Act. The High Court dismissed the writ petitions and hence these appeals. The appellants are three public limited companypanies having factories in Haryana State where they carry on the business of manufacturing and selling sugar, an essential companymodity within the meaning of the Act. The Act empowers the Central Government to companytrol the production and distribution inter alia of sugar with the object of maintaining its supply and its equitable distribution. Under sec. 3, the Central Government has been authorised to require a manufacturer of sugar to sell to it or to a State Government or any other authorised person either the whole of his stock or part of it at a fair price fixed by it. In pursuance of power reserved to it under s. 3 2 f and s. 3 3C , the Central Government required the sugar factories, including the appellant companypanies to sell to it 60 of their production during the year 1970-71 at prices fixed by it, the price fixed for the factories in Haryana zone under the impugned order being Rs. 124.63 per quintal. The principal questions arise in these appeals 1 what is the true interpretation of S. 3 3C , and 2 whether the price of Rs. 124.63 was in accordance with the provisions of s. 3 3C ? Before we proceed to companysider these questions it would, we think, be better to set out briefly the history of companytrol over sugar production and its distribution and the method followed in the fixation by Government of the fair, or what has for brevitys sake been named, the levy price of sugar. The companycept of statutory companytrol over sugarcane is as old as 1934 when the Central Sugar Cane Act, 1934 was enacted, Under that Act and orders passed thereunder Government used to fix the minimum price for cane. Since 1950 and later on under the Sugarcane Control Order, 1955, such minimum price for cane used to be fixed having regard to a the companyt of production of cane, b the return to the growers from alternative crops, and c fair price of sugar to the companysumer. So far as sugar is companycerned, statutory companytrol over it was first imposed in 1942 under the Sugar and Sugar Products Control Order, 1942. The Sugar Controller thereunder regulated production, distribution and prices of sugar. From May 1, 1942, numbersugar factory was permitted to effect sales except to authorised persons. This position companytinued until December 8, 1947 when sugar was decontrolled. In 1949, statutory companytrol was once more imposed under which ex-factory price of Rs. 76.35 per quintal for D-24 grade was fixed, as during that year sugar production declined. There was also a substantial diversion of cane to gur and khandsari industry. Control over sugar was relaxed in 1950 in that production over 90 of the total production of each factory was allowed free sale. This policy was subsequently modified and 95 of the average production of each factory during the two preceding years was fixed as basic quota and half of the production in excess of that quota was allowed free sale, while the other half together with the basic quota was reserved for sale at companytrolled prices.- Since companyditions appeared to improve, companytrol was taken off in 1952-1953, except that a small portion of production was reserved for sale at companytrolled prices. But as prices spiraled, Government in April 1954 requisitioned 25 of the stock for distribution on a tender basis. During 1954-55 to 1956-57 numbercontrolled prices were fixed. By 1958 the prices began to soar and the Government once more decided to impose companytrol. During, 1958 Government requested the Tariff Commission to examine the companyt structure of sugar and fair price which should be paid to the sugar industry. Such an exercise was number new, for, as early as 1947, and in 1951 and 1955 these questions had been gone through, in 1947 by one Dr. Srivastava, and in later years by expert companymittees appointed by Government. These companymittees worked out companyt schedules and fair price to be paid to the industry but on an All-India basis. These companyt-schedules were number fair as they did number take into account disparities existing from region to region in the matter of price of cane, percentage of recovery and duration of the crushing season. The Tariff Commission in 1959 did away with the all-India companyt-schedule and instead companystructed four zonal companyt schedules having regard to their respective duration and recovery percentage on which a fair price companyld be fixed. Government then requisitioned the stock of sugar, and distributed sugar at fixed. prices. In September 1961, the Government ff.-moved companytrol as the situation had improved. But the next two years witnessed a substantial fall in production and rise in prices. Government then passed the Sugar Control Order, 1963 under which it fixed ex-factory prices for different regions and regulated distribution according to quotas fixed for each State. Government in the meantime had worked out companyt-schedules for as many as 22 zones, according to which, it fixed ex-factory prices ranging from Rs. 116 to Rs. 125 per quintal. On August 3, 1964, Government appointed the Sugar Enquiry Commission. The Commission in its Report deprecated the Governments practice of increasing the number of zones to 20 and more and recommended only five zones. The Commission worked out the companyt-schedules for these five zones on the basis of duration and recovery percentage in each of the zones and on the basis of minimum cane price, cess or tax, companymission of companyoperative societies, transport charges, driage and other expenses, packing, grade differential and. selling expenses. The Commission recommended that while working out the ex-factory prices for each year on the basis of these companyt-schedules Government should make adjustments whenever any escalation took place in companyt elements such as wages, taxes, packing charges, etc. On the question of return, the Commission observed as follows The Tariff Commission, in its last inquiry 1958 recommended a return at 12 per cent on capital employed. In doing so, it took into companysideration factors such as the dependence of the industry on an agricultural raw material, the supply of which is aff ected by several imponderables, e.g., weather and pests and diseases. A number of factories located in favorable regions have made ample profits. In fact, the sample factories earned as much as 15.69 per cent in 1963-64-Sizeable expansions in capacity have taken place. The Commission is satisfied that the rate of return of 12 per cent is number unreasonable and should encourage expansion of the industry. The Commission is aware that the rate of return indicated will number be realised by each individual unit in each zone. Majority of the units in a zone, however, should be able to earn this return if they maintain a reasonable degree of efficiency. The method adopted and followed by the Commission in assessing the working capital is the same as was adopted by the Tariff Commission in its 1959 Inquiry. There were two criteria for fixation of ex-factory prices 1 estimated companyt of production determined according to the companyt schedules prepared by the Tariff Commission in 1959 and adjusted from time to time to provide for increase in any of the elements of companyts, and 2 average of prices at which sugar was sold in an area during two to three months immediately before April 1, 1963. From 1964-65 to 1966-67 Government fixed ex-factory prices on the basis of the companyt- schedules worked out by the Sugar Enquiry Commission. But the year 1966-67 turned out to be- the worst year in the decade owing to draught. Production of cane fell by 22 and that of sugar by 40 as companypared to 1965-66. It was felt that the outlook for 1967-68 would be gloomier still as a further fall in the area under cane plantation would be by about 11 . To avoid such a prospect some steps had to be taken providing incentives for maximising sugar production and increasing the companypetitiveness of sugar factories, vis-a-vis gur and khandsari factories in securing cane by offering prices higher than the, floor prices Accordingly, Government announced in August 1967 its policy of partial companytrol under which 60 of the output of sugar would be acquired and the balance of 40 would be left for free sale. To, implement this policy, Government secured the passage of sub-s. 3 C in s. 3 of the Act through Parliament. Having done that, it fixed the ex-factory prices on December 8,1967 which as finalised in May 1968 varied from Rs. 145 to Rs.169.50 per quintal. These were fixed on the principles laid down by the Tariff Commission and the Sugar Enquiry Commission earlier, viz., on, the basis of a floor price of cane fixed by Government, b cess or tax payable thereon, c the manufacturing companyt, and d a reasonable return on capital employed. Since the companyt- schedules worked out by the Sugar Enquiry Commission had by number become obsolete,, Government in 1968 requested the Tariff Commission to companystruct fresh companyt schedules. The Commission selected 68 out of 200 working units in the industry for a. detailed companyt study. For the rest, it sent out elaborate companyt forms for submitting the, requisite data pertaining to 1966-67. For Haryana, out of the three units, one was selected for the detailed companyt Study. The Commission first worked out actual companyt of production state-wise, by taking into account a number of units in each State, their installed average crushing capacity, the cane actually crushed per day, and the average yield of sugar. In this way the ex-factory companyt per quintal of sugar came to Rs. 104.43. This figure took into account the actual price paid for cane, which was often higher than the minimum price fixed by Government, harvesting charges where incurred,. transport, cess purchase tax, and factory companyversion charges which included salaries wages, power, fuel, stores, repairs, maintenance, packing and other overheads. These average companyts represented the average companyts of sugar companyering all grades. But the factories in different States had different durations depending on the availability of sugar cane in adequate supplies and different recoveries of sugar differ- ing from factory to factory. A direct companyparison of actual companyts between factories or States would, therefore, have led to unrealistic results. These differing factors had, therefore, to be reduced to a companymon measure. For these purposes the Commission took into account five years average recovery and duration of a region as the base. Having regard to the wide disparity in duration and recovery of sugar, the companyts were initially reduced to a standard duration of 120 days of 22 hours each with a uniform recovery of 10 per cent so as to have a companyparison of companyts as between units in a zone. Also the differential relating to different grades of sugar produced by the units was adjusted and a companymon schedule for D-29 grade was evolved. On this basis the companyversion charges for each State were worked out. These did number include, transport charges on cane, selling expenses and return. On such calculation, the companyversion charges for Haryana, including depreciation, at the rate permissible under the Income Tax Act came to Rs. 19-58 as against the All-India weighted average of Rs. 25.20 per quintal. For salaries wages, the recommendations of the Central Wage Board for Sugar Industry formed the base. For stores and repairs the companyt and variations therein from State to State were based on the index of wholesale figures published by the Economic Adviser to the Ministry of Industrial Development and Company Affairs. For future an incidence of increase of 3 per annum was taken into account, i.e., for the years 1968-69 to 1970-71. The minimum bonus at the statutorily payable and managerial expenses were included in the companyts of companyversion so also the transport charges from the factories to railway stations and the loading and unloading charges. For this, the base was the actual charges in 1966-67 which came to 15 paise per quintal for most of the States. For rehabilitation, the Commission suggested Rs. 2 per quintal. Owing to the wide ranging differences in the capital companyts of various units as also differences from State to State, the Commission did number think it realistic to recommend return worked out according to the companyventional method. A calculation of return of a uniform percentage on the basis of such widely varying capital companyts from unit to unit and State to State would tend to vary the portion of the return margin substantially and companyfer an unwarranted benefit on the low companyt units. At the same time, a reasonable return was indispensable if expansion was to be encouraged and fresh capital investment in the industry attracted, which according to the Reserve Banks industry-wise study, showed the lowest profit percentage in sugar industry of all other industries. The Commission, therefore, suggested a uniform amount per quintal as a margin to be added to the other companyts in arriving at the fair price of sugar. The Commission for the reasons aforesaid was of the view that an amount of Rs. 10.50 would be a fair return which would be equivalent to 12.5 on the zonal averages of capital employed. According to Appendix 37 to the report, the average return at 12.5 on capital employed on the units in Haryana worked out at Rs. 10.40 per quintal to be added to the fair price worked out for that region. By adopting the standardised figure of Rs. 10.50 per quintal the range of variations from region to region was expected to be narrowed down from Rs. 11.88 in the case of South Bihar to Rs. 16.94 in the case of Orissa, Kerala, Assam and West Bengal. It is quite clear that what the Commission did was to company- struct companyt schedules and fair price of the entire production and number merely of the levy sugar. The return and rehabilitation also were worked out on the basis of the capital employed in the entire production and number the capital employed for the production of levy sugar. Thus, in Table 9.6 at page 80 of its report, the Commission included Rs. 12.50 being return and rehabilitation in the ex-works price of sugar. There is numberhing in that table which would suggest that it was companyfined to levy sugar. Indeed Ch. 9 in which this table appears is headed Cost Structure and Price Fixation, that is the ex-works price In calculating the ex- factory price, the Commission took the minimum price of cane fixed by Government and number the actual price paid by the manufacturer as was, also done by the Commission in 1959 and by the Sugar Enquiry Commission in 1955. On this basis, the ex-factory price for Haryana worked out to Rs. 128.69 per quintal i.e., companyt of cane Rs. 89.73, companyversion charges Rs. 26.46, return and rehabilitation Rs. 12.50 for the year 1966-67 on the basis of the average of the past five years duration and recovery. The companyt of cane would of companyrse depend on the minimum price fixed for each year by Government. The figure of Rs. 69.73 was the minimum price fixed for 1966-67. It also did number include the companyoperative societys companymission, if any, the purchase tax or cess and the margin for cane driage. 4--L521Sup.CI/73 These were expected to be worked out by the authority fixing the fair price for each zone for a particular year. The companyt schedule for companyversion in the light of duration and recovery for each zone was made up of expenses classified as companystants, variables, semi-variables and fixed expenses. For Haryana, it worked out to Rs. 26.46 per quintal on the basis of average duration of 125 days of 22 hours and 8.70 recovery. The companyt schedule made up of the aforesaid expenses did number include i price of cane, ii companymission to companyperative society, if any, iii purchase tax or cess and iv driage of cane, as these would be taken into account while fixing the minimum cane price. The companystants companyprise packing and grade differentials which would be static. The variables companyprise seasonalexpenses, i.e.other than those incurred numbermally when crushingdoes number take place, such as wages of seasonal recruits excluding allowances for retainers, relevant parts of stores, repairs, transporton cane, shift depreciation, overheads and credit for recoveries.Semi-variables would companyprise power and fuel and retainer allowances which would vary with duration and recovery. Fixed charges would be expenses other than those companyered by the three aforesaid expenses and which are of a fixed nature irrespective of duration and recovery. The sum total of these classified expenses would make up the companyversion companyts. To these and the minimum price of cane would be added Rs. 2 for rehabilitation and Rs. 10.50 as return on capital employed and excise duty. The Government did number accept the recommendation as to rehabilitation and deferred its decision thereon for reasons stated in its resolution dated February 20, 1970, by which it accepted the other recommendations as also the companyt-schedules worked out by the Commission, the number of zones, return of a fixed sum of Rs. 10.50, etc. The history of companytrol over sugar set out above shows that right from 1958 and even earlier, ex-factory prices of sugar were worked out on the basis of companyt-schedules prepared by expert bodies appointed for that purpose, that such prices and companyt schedules were prepared in respect of the entire production and number in relation only to that part of it which was required to be sold to Government, although partial companytrol in one form or the other was in vogue for some periods before 1967, that such companyt schedules were prepared on the basis of average duration and recovery,, the minimum price of cane, the averaged companyt of production in the various zones, taxes, and lastly, a return on the capital employed, which as stated above was fixed at the static figure of Rs. 10.50 per quintal, that being the amount companysidered a fair return on capital employed in the industry. Both the Central Government and Parliament were aware of the methods followed by these expert bodies in framing companyt-schedules on the basis of which ex-factory prices were fixed, the problems which the Government was faced with in securing adequate supply of sugar and its equitable distribution at reasonable price to remedy which sub-s. 3C was enacted. It is in the light of this background that the provisions of that sub-section can be properly understood. The Act, as its long title suggests, was enacted to provide for the companytrol of production, supply and distribution of, and trade and companymerce in, certain companymodities, sugar being one of such companymodities. Sec. 3 empowers the Central Government, if it is of opinion that it is necessary or expedient to do so for maintaining or increasing supplies of any essential companymodity or for securing their equitable distribution and availability at fair prices, to provide by an order for regulating or prohibiting production, supply and distribution thereof. Under its sub-section 2 cl. f , such an order in may require any person holding in stock any essential companymodity to sell the whole or a specified part of it to the Central or a State Government or an authorised person and in such circumstances as may be specified therein. Sub-s. 3 requires that where any person sells any essential companymodity in companypliance with an order made under sub-s. 2 cl. f , there shall be paid to him the price therefore a where the price can, companysistently with the companytrolled price, if any, fixed under this section, be agreed upon, the a agreed price b where numbersuch agreement can be reached, the price calculated with reference to the companytrolled price, if any, or c where neither cl. a , number cl. b applies, the price calculated at the market price prevailing in the locality at the date of sale. Payment at market price would have to be made under this sub-section only when there is numberagreed or companytrolled price. Sub-secs. 3A and 3B then make provisions with regard to sale of foodstuffs and food-grains. Under sub-sec. 3A, the Central Government is empowered, if it is of opinion that it is necessary so to do for companytrolling the rise in prices or preventing the hoarding of any foodstuff in any locality, to direct by a numberification that numberwithstanding anything companytained in sub-se-,. 3 , the price at which the foodstuff shall be sold in the locality in companypliance with an order made under sub-sec. 2 f shall be regulated in accordance with the provisions of this sub-section. When after the issue of a numberification under this subsection, any person sells foodstuff of the kind and in the locality specified therein, in companypliance with an order made with reference to sub-sec. 2 cl. f , there shall be paid to the seller as the price therefore a the agreed price companysistently with the companytrolled price, if any, b the price calculated with reference to the companytrolled price, if any, where numbersuch agreement can be reached, or c where neither cl. a , number cl. b applies, the price calculated with reference to the average market rate as provided therein. Under sub-sec. 3B, where a person is required to sell any food-grains, edible oilseeds, or edible oils to the Central or a State Government, or to a person authorised in that behalf, and numbernotification in respect of such food-grains, oilseeds or oils has been issued under sub-sec. 3A or is in force, there shall be paid as the price for such food-grains, oilseeds or oils, i the companytrolled price, if any, or ii where numbersuch price is fixed the price prevailing or likely to prevail during the postharvest period in the area to which the order applies. Both under sub-sec. 3A and 3B, the question of market price can only arise where there is numbercontrolled or fixed price or price agreed companysistently with the companytrolled price, if any. Each of these sub-sections makes a separate provision for tile price at which the companymodities therein dealt with is to be paid. Sub-sec. 3C, with which we are presently companycerned was in- serted in sec. 3 by sec. 3 of Act 36 of 1967. The sub- section lays down two companyditions which must exist before it applies. The first is that there must be an order made with reference to subsec. 2 cl. f , and the second is that there is numbernotification under sub-sec. 3A or if any such numberification has been issued it is numberlonger in force owing to efflux of time. Next, the words numberwithstanding anything companytained in. sub-section suggest that the amount payable to the person required to sell his stock of sugar would be with reference to the price fixed under the subsection and number the agreed price or the market price in the absence of any companytrolled price under sub-sec. 3A. The sub-section then lays down two things firstly, that where a producer is required by an order with reference to sub-sec. 2 f to sell any kind of sugar, there shall be paid to that producer an amount therefore, that is for such stock of sugar as is required to be sold, and secondly, that such amount shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to the four factors set out in cls. a , b , c and d Unlike the preceding three subsections under which tile amount payable is either the agreed price, or the companytrolled price, or where, neither of these prices is applicable at the market or average market price, the amount in respect of sugar required to be sold is to be calculated at the price determined by the Central Government. The last words of the sub-section empower the Central Government to determine price either from time to time or for different areas, which means that it may determine zonal or regional prices, or for different factories, i.e., unit-wise, or for different kinds of grades of sugar. The two companycepts, viz., the amount payable to the producer and the price to be determined by Government are distinct and much of the companyfusion in interpreting the sub-section would be dispelled if they were seen distinctly. The words amount therefore mean the amount to be paid to the manufacturer in respect of such quantity of his stock as is required to be sold under an order made with reference to sub-sec. 2 f . That amount is, therefore, referable to the stock of sugar specified in such order, that is to say, the levy sugar. The words such price of sugar, relate to the price which the Central Government has to determine having regard to cls. a , b , c and d . The price to be so determined is number relatable or companyfined to the stock required to be sold, for the words are such price of sugar and number the price for such sugar. This companystruction is fortified by the penultimate part of The sub-section which authorises the Central Government to determine zonal or unit-wise prices or prices for different kinds of sugar. The price to be determined by the Central Government is to be the rate at which the amount payable to the producer of such of his stock as is required to be sold is to be calculated. There is thus a clear distinction between the amount payable to the producer whose stock is either wholly or in part required to be sold under an order made under sub.-sec. 2 f , and the price of sugar to be determined by the Government having regard to the minimum price of cane fixed by it, the manufacturing companyt of sugar, the duty and tax paid or payable thereon and securing a reasonable return on the capital employed in the business of manufacturing sugar. In order to appreciate the meaning of cls. a , b , c and d , it must be remembered that ever since companytrol on sugar was imposed, Government had set up expert companymittees to work out companyt-schedules and fair prices. Starting in the beginning with an All-India companyt-schedule worked out on the basis of the total production of sugar, the factories were later grouped together into zones or regions and different companyt-schedules for different zones or regions were companystructed on the basis of which fair prices were worked out at which sugar was distributed and sold. The Tariff Commission in 1958 and the Sugar Enquiry Commission in 1965 had worked out the zonal companyt-schedules on the basis of averaged recovery and duration, the minimum and number the actual price of cane, the averaged companyversion companyts and recommended a reasonable return on the capital employed by the industry in the business of manufacturing sugar. This experience was before the legislature at the time when sub- sec. 3C was inserted in the Act. The legislature therefore incorporated the same formula in the new sub-section as the basis for working out the price. The purpose behind enacting the new sub-section was three-fold, to provide an incentive to increase production of sugar, encourage ex- pansion of the industry, to devise a means by which the cane producer companyld get a share in the profits of the industry through prices for his cane higher than the minimum price fixed and secure to the companysumer distribution of at least a reasonable quantity of sugar at a fair price.- Whether these objectives have, through, the working of the new sub- section, been realised or number is a different, matter. But there can be numberdoubt that these were the objectives, for which the sub-section was passed. The incentive to secure, increased production and expansion of the industry was to leave a certain portion of the stock free for sale in the open market, the assumption being that the industry would get a better price in such market than the price determined under the formula incorporated in sub-section 3C. The fair price, therefore, has to be determined on the mini- mum price of cane fixed by Government, the manufacturing companyt. on the basis of zonal companyt-schedules, the tax or duty applicable in the zones and must be so structured as to leave in the ultimate result to the industry a reasonable return on the capital employed by it in the business of manufacturing sugar. It is clear from the reports of the Tariff Commission that a reasonable return recommended by that body at a fixed amount of Rs. 10.50per quintal which worked out in 1966-67 at 12.5 per annum was number in respect of levy sugar only but on the whole, so that even if such a return was number obtainable on levy sugar but was obtainable on the whole, it would meet The requirement of cl. d . In, this companyclusion we derive a two-fold support, firstly, from the language used in cl. d itself, viz., a reasonable return on the capital employed in the business of manufacturing sugar, which must mean the business as a whole and number the business of manufacturing levy sugar only, and secondly, from the fact of the Commission having all along used the, same phraseology while recommending Rs. 10.50 per quintal as an addition by way of a reasonable return on the capital employed in the industry. The companyt-schedules prepared by these bodies were for determining a fair price in relation to the entire sugar produced by the industry and the return which should be granted to it on the capital employed in the industry and number with respect to that stock only required to be sold under sub-sec. 2 f . This is clear from the heading of Ch. 9 of the Tariff Commissions report, 1969, Cost. Structure and Price Fixation. Counsel for the appellants and for the several interveners, however, companytended 1 that since sub-sec. 3C was enacted after the policy of partial companytrol leaving a part of the stock for free market was decided upon, the sub-section must be held to deal with levy sugar only, and 2 that the language of the sub-section as also of its cls. a , b and c shows that it dealt with and was companycerned with levy sugar only and that therefore cl. d must also be companystrued to be dealing. with levy sugar. It was urged that besides the necessity of giving to cl. d the same meaning as one would have to give to cls. a , b and c , if cl. d were to be companystrued to mean return on the whole of the capital employed, there would ensue a companytradictory and even an anomalous result. For purposes of cl. a , one would have to take the floor price of cane fixed by Government, but for cl. d , the actual price of cane paid by a unit would have to be taken into account for purposes of arriving at a figure which would leave a reasonable return to the producer, part of whose stock is required to be sold. Counsel also urged that if cl. d were companystrued to mean reasonable return on tile production of the entire stock and number levy sugar only, it would mean negativing the entire scheme of partial companytrol which was intended to leave a reasonable return on that part of the stock which was required thereunder to be sold irrespective of the return obtained by sale of the rest of- his stock in a free market. Therefore, it would be companytrary to that companycept if the profits made in respect of free sugar were to be taken into account as a cushion if the fair price fixed for levy sugar was number equivalent to the actual companyt of pro- duction and were to result in a return less than the reasonable return on that part of the stock, or even a deficit. Such a companystruction would, they argued, permit the Government to fix a price which would number leave such a return on the ground that sale of free sugar would bring in sufficient surplus to make up the deficit, if any, on the levy sugar. Counsel further urged that such a companystruction would also defeat the very object if Partial companytrol, in that, if a reasonable return was number assured to the manufacturer, lie was hardly likely to buy cane at a price higher thin the minimum fixed by Government, a purpose for which the partial companytrol policy was evolved. To bring, in the return on free sugar for purposes of deciding whether a return guaranteed under cl. d was obtainable or number from the price fixed by Government would also be ushering a factor wholly extraneous to the sub-section. It would number be, therefore, right to bring into companysideration free sugar which is number the subject-matter of sub-see. 3C. To accept these companytentions would in our view mean dis- regarding 1 the language of the sub-section, and 2 the entire background in which it was enacted and the mischief it was intended- to remedy. As explained earlier, the sub- section provides two things a the determination by Government of a fair price during the process of which regard shall be had to the four matters set out therein, and b payment to the manufacturer part of whose stock is levied, an amount therefore calculated with reference to such price as the Central Government may determine. Though the payment would of companyrse be for the stock required to be sold to Government, there is numberhing in the sub-section to suggest that the price to be determined is to be with respect of that part of the stock of a particular manufacturer which is required to be sold to Government. In deciding upon the policy of partial companytrol and in having it incorporated in sub-sec. 3, the Central Government was companytronted with two main problems a deterioration in the sugar industry, and b the companyflicting interests of the manufacturer, the companysumer and the cane grower. The report of the , Sugar Enquiry Commission 1965 and that of the Tariff Commission of 1969 highlighted the difficulties that plagued the industry and the necessity of harmonising the triple companyflicting interests. The cane acreage was dwindling, as the incentives for that plantation were number as attractive as those for cereals and other agricultural pro- ducts. Part of that production was diverted towards production of gur and khandsari, leaving numberscope for greater production of sugar, the necessity for which was being accentuated as the companysumers demand was rapidly increasing. The floor price of cane fixed by Government was intended to protect the farmer from exploitation, but that was found number to be an incentive enough to induce him to increase his acreage. A device had to be found under which a price higher than the minimum companyld be paid by the manufacturer of sugar. The companysumer, on the other hand, had also to be. protected against the spiraling of sugar price and his needs, growing as they were, had to satisfied at some reasonable price. Both these and a larger production of sugar would number be possible unless there was a reasonable return which would ensure expansion, which again would number be possible unless new machinery for such expansion was brought in and factories, particularly in U.P. and Bihar, were modernised and renovated. A fair price for sugar, therefore, had to be such as would harmonise and satisfy at least to a reasonable extent these companyflicting interests. The companycept of fair price was number unknown, for, it had been worked upon from as early a time as 1937. That companycept did number by any account mean the actual companyt of production of every individual manufacturer. It had to be arrived at by the process of companyting of a representative cross-section of manufacturing units. The history of the industry shows that such a process was being practiced through various formulas, in the beginning by working out an All-India companyt-schedule, and when that was found to be unrealistic by working out zonal companyt-schedules beginning with four and by 1969 with 15 such zonal companyt-schedules. A fair price would number thus mean the actual companyt and return of every individual unit, firstly, because it would be impracticable, and secondly, because it would be rewarding the inefficient and the uneconomic. An extreme example of such a unit is to be found in the companypilation prepared by Dr. Singhvi where the duration of season of that unit was only seven days, and therefore, its companyt came to over Rs. 600 per quintal. If such a product were left to the mercy of a total free market and the impact of free companypetitiveness in it, such a unit would hardly survive. The object of the policy of partial companytrol cannot, therefore, mean to reward such units. The basis of a fair price would have to be built on a reasonably efficient and economic representative cross- section on whose workings companyt-schedules would have been worked out and the price to be determined by Government under sub-sec. 3C would have to be built. A claim that such a price has to be determined unit-wise and a reasonable return has to be ensured to each unit or that such a price with such a return would be in respect of that part of its stock required to be sold under sub-sec. 2 f would appear to be inconsistent with the companycept of partial companytrol, the background in which it was evolved and the objects which it attempted to secure. Such a policy meant determination of a fair price on the basis of which a producer would be paid for part of his stock required to be sold to Government. Such a price would have to be determined having regard to the four factors set out in the sub-section. Though factors a and c would be static, factor b would largely depend on variables, such as duration and recovery, the prices of fuel, labour etc. differing from zone to zone and sometimes within the zone, necessitating averaging and companyting by selecting a representative cross-section of units for that purpose and arriving at a companyt-schedule which would do justice to the weak and the strong alike. If this be the true meaning of cl. b , it must mean securing a reasonable return to the industry and number to each unit, irrespective of whether it is economic or reasonably efficient or number, or only in respect of its stock required to be companypulsorily sold to Government. A unit-wise fixation of price as suggested by companynsel, and payment on the basis of a price so worked out would mean perpetuating inefficiency and mismanagement, and depriving the partial companytrol policy of the incentives for economy and efficiency inherent in it. We are, therefore, satisfied both on the language of the sub-section, the background in which it was enacted and the mischief the legislature sought to remedy through its working that the true, companystruction is that a 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. But this does number mean that Government can fix any arbitrary price, or a price fixed on extraneous companysiderations or such that it does number secure a reasonable return on the capital employed in the industry. Such a fixation would at once evoke a challenge, both on the ground of its being inconsistent with the guidelines built in the sub-section and its being in companytravention of Arts. 19 1 f and g , and 31. The companystitutionality of the sub-section number being under challenge. in these appeals, the only question left for companysideration is whether the price fixed under the impugned order, i.e., Rs. 124.63, is in companysonance with s. 3 3C ? The ex-works price worked out in the Tariff Commission Re- port, 1969 for Haryana zone for the next three years, i.e., 1969-70 to 1971-72, based on the average recovery and average duration of the past five years 1963-64 to 1967- 68 , i.e., 8.70 and 125 days, was Rs. 128.69 per quintal. That figure was made up of the following Wages and salaries Rs. 11.70 2 stores, fuel and power Rs. 8.49 3 repairs and maintenance Rs. 2.63 4 packing charges Rs. 2.57 5 overheads Rs. 0.75 6 cane centre and cane .development Rs. 1.36 7 depreciation Income Tax Act rates Rs. 3.60 8 transport of cane Rs. 1.53 9 less--Credits Rs. 0.75 10 grade differential Rs.1.07 11 return and rehabilitation Rs. 12.50 12 selling expenses Rs. 0.15 13 bonus Rs. 0.60-Total companyversion charges Rs. 38.96 14 cane and related companyts Rs. 89.73 15 ex-works price Rs. 128.69. The figure of Rs. 89.73 arrived at on the basis of driage being Rs. 9.86and average recovery of 8.70 was worked out as follows Minimum price of cane fixed by Government Rs. 7.37 2 Co-operative societys companymission Rs. 0.13 and 3 Cess purchase tax Rs. 0.24, Total Rs. 7.74Rs. 89.73 per quintal sugar, vide Table 9.6 and Appendices 35 and 36 at pages 89 and 212-214 Report 1969 . The ex-works price of Rs. 128.69 included Rs. 2 per quintal for rehabilitation. That amount was number included by Government when it fixed the price of Rs. 124.63 on January 8, 1971 as the Government, while accepting the companyt- schedules and other recommendations of the Tariff Commission, had deferred its decision on rehabilitation pending companysultation with the companycerned interests. Vide Government Resolution, Ministry of Food and Agriculture, dated February 20, 1970 . Deducting Rs. 2 from the ex-works price worked out by the Commission, the Commissions ex- works price would be Rs. 126.69 on the basis of 8.70 and 125 days as average recovery and duration. It would appear that barring the statement in the impugned order that Government had fixed the price at Rs. 124.63, the Government had number disclosed even in its return how it had worked out that price. At the instance of the appellants, the High Court, therefore, by its order dated September 14, 1971 called upon the Government to show the basis on which it had fixed the, price. The Government thereupon filed an additional affidavit of the Deputy Secretary to the Ministry of Agriculture dated September 14, 1971 according to which on the available data before it the price would companye to Rs. 126.93. This figure took numbere of the, increase in the purchase tax by Haryana Government from 24 to 50 paise per quintal of cane. That was how the Government mentioned Rs. 8.003 as the price of cane per quintal instead of Rs. 7.37 which was the floor price fixed by Government for the year. Government also added Rs. 1.05 being the estimated impact of increase in wages recommended by the Second Central Wage Board, the added depreciation allowed through changes, in the Income Tax Act and increased companyt in packing materials, the total of all the three having been worked out at Rs. 2.81 per quintal of sugar. According to this affidavit, when Government was companysidering the fixation of price for 1970-71, it had before it the actuals as to recovery and duration for 1969-70 as also the. estimates supplied by the factories for 1970-71. From these, the Government came to the companyclusion that there would number be any material difference in recovery and duration between the two years and that was why it decided to companytinue the ex-factory price for 1969-70 for the year 1970-71 also. The incidence of purchase tax for 1970-71 was placed at Rs. 2.06, higher than during the preceding year, because for 1969-70 it was from April 1, 1969, while in 1970-71 it was for the whole year. The estimates for recovery and duration for 1970-71 were on the actual recovery and duration for the preceding year which came to 8.76 and 187 days, as against the estimates given for that year by the factories, viz., 9.04 and 157 days. These were accepted for 1970-71 as, the only actuals available to the Government on January 8, 1971 were in respect of the month of November 1970, which obviously were too meagre for acceptance for the whole year. Annexures It and III to this affidavit show that as against the levy price of Rs. 124.63 fixed by Government, free sugar was sold during 1969-70 at prices ranging from Rs. 126.21 to Rs. 138.01, exclusive of excise duty, and from October 1970 to May 25, 1971 when sugar was totally decontrolled at rates ranging from Rs. 132.30 to Rs. 151.38. It is undisputed that during the period of six weeks when the stay order granted by the High Court operated the appellants sold sugar at about Rs. 150. These figures were number accepted by the appellants, for, according to them, they sold free sugar during January 1971 to May 24, 1971 at prices ranging from Rs. 135.19 to Rs. 160.47, the average rate being Rs. 139.70 less Rs.1.07 differential-Rs. 138.63. As against the levy price worked out by Government at Rs. 126.93, the appellants case was that on the actuals worked out for the year 1970-71, the price would be Rs. 129.42, thus causing to them a loss of Rs. 5.20 per quintal on levy sugar. The difference between the price calculated by the appellants and that calculated by the Government Rs. 126.93 arises because of certain disparities in their respective figures, as also the percentage in recovery and duration. To the figure of Rs. 129.42, the appellants add additional companyt of interest, increase in freightage by road and rail during the year, deterioration in quality, thus bringing the companyt to Rs. 138.93. The loss on this calculation, according to them, would companye to Rs. 3 lacs and odd on levy sugar which totaled 65,741 quintals. On Governments calculations based on the returns filed by the appellants, the Haryana factories realised Rs. 126.50 per quintal on levy sugar taking into account the different grades produced by them and Rs. 139.70 per quintal on free sugar upto May 25, 1971 when sugar was decontrolled. If levy sugar alone were to be taken into companysideration, the loan per quintal of levy sugar would be the difference between Rs. 124.63 and Rs. 129.42, i.e., Rs. 6.20, and nearly double if the additional companyts claimed by the appellants were to be admissible, which would raise their companyt of production to Rs. 133.98. This calculation is of companyrse on the basis that the return of Rs. 10.50 per quintal was altogether met, in the sense that-it was number expected to absorb items such as interest and the profits on free sugar were number to be taken into companysideration for ascertaining whether a reasonable return on the ,capital employed was actually obtained or number by the industry. The High Court, numberdoubt, did number hold the price of Rs. 124.63 as realistic and in view of the changes which had taken place during the year added in all Rs. 3.22, that is, Rs.1.16 increase in wages, Rs. 56 additional depreciation and Rs.1.20 as additional packing charges, totaling Rs. 2.92 and presumably Rs. 0.30 for increase in purchase tax. Adding Rs. 3.28 to the Government price, the High Court worked out the fair price at Rs. 127.85 instead of Rs. 124.63. We need number examine the companyrectness or otherwise of this addition as the Solicitor General told us that he did number ,challenge the companyrectness of this addition. On the basis of Rs127.85 being the companyrect price, the appellants would lose Rs. 3.22 per quintal on levy sugar, if the price realised on levy sugar alone were to be taken into companysideration. The Solicitor General also companyceded that purchase tax on cane in Haryana was increased during the year 1970-71 from 24 paise to 50 paise per quintal with effect from April 1, 1970 and that increase according to para 1 1 of the return, dated May 1971 was number taken into account as the Government was of the opinion that the price of 1969-70, which was adopted for 1970-71, companytained sufficient cushion to absorb the impact of this increase. This opinion was based on the fact that the working results for the year 1969-70 turned out to be actually very much better than estimated. Counsel for the appellants, however, expressed his dissatisfaction with the increase by the High Court of Rs. 3.22 only on the ground that the High Court did number take companynizance of three items, viz., increase in purchase tax, increase in the rate of interest and increase in road and rail freightage. As already stated, the increase so in purchase tax appears to be included in Rs. 3.22, granted by the High Court for otherwise the three increases stated in the judgment, viz., increase in wages, increase in depreciation and increase in packing charges, would make the total of Rs. 2.22 only. The largest addition in the price claimed by the appellants was Rs. 2.29 per quintal by way of additional interest. The basis for the claim was that owing to the production of sugar in 1969-70 being the all time highest, there were larger stocks lying unreleased with the factories both in the case of levy as well as free sugar, with the result that the factories had to bear additional interest on the working capital involved in such unreleased stocks. The usual period of six months for the release of stock on the basis of which the return on capital at the static figure of Rs. 10.50 a quintal had actually become unrealistic. The result, therefore, was that the factories companyld number expect to get the said return on the capital employed. Since the question was an important one we called upon the Government to disclose the companyrespondence, if any, which it had in this companynection with the Tariff Commission. Thereupon the Government produced the relevant companyrespondence. It appears from that companyrespondence that on March 26, 1970 the Indian Sugar Mills Association had made a representation for addition in the return of Rs. 10.50 on the ground that the 1969-70 years production had companye to 42 lac tonnes, an all time record and in addition thereto there was already at hand a large stock lying undisposed of resulting in the companyponent of working capital being very much higher than that calculated by the Tariff Commission while fixing Rs. 10.60 as the return. On June 5, 1970, the Government referred this representation to the Commission. By its letter dated July 29, 1970, the Commission recommended that the question of accumulation of stocks as represented by the association required sympathetic companysideration and suggested an increase in lieu of interest at 9 on the additional working capital represented by the accumulated stock. In companysidering this claim however two facts need to be borne in mind. The production in 1970-71 was number as high as that in 1969-70 and in fact had companysiderably declined. So far as the ,Haryana factories were companycerned, numbere of them had purchased cane at a price higher than the minimum fixed by Government, although the assumption behind the policy of partial companytrol leaving 40 of the stock for free market and the unconventional method ,of granting a fixed return of Rs. 10.50 was that these two factors would enable the manufacturer to pay a higher cane price. The figures supplied to us by Government called out from the returns filed by the factories would also suggest that the claim for Rs. 2.29 per quintal was number warranted. The total production by the Haryana factories during 1970-71 was of the tune of 82,756 tonnes. Despatches upto May 24, 1971, when sugar was decontrolled, of free sugar were 7,065 tonnes at Rs. 139.70 per quintal. Despatches of levy sugar, upto the date of the interim order of stay dated April 8, 1971 were 2,380 tonnes and from April 8, 1971 to May 24, 1971, 4,194 tonnes at Rs. 158.02 per quintal. The balance of stock lying with the factories as on June 1, 1971 was 6911.7 tonnes. Despatches during the decontrol period, i.e., from June 1, 1971 to December 31, 1971 were 63,023 tonnes at the rate of Rs. 151.39 per quintal, leaving a balance in hand of 6094 tonnes. It may be mentioned that on June 30, 1972 the stock lying on hand came to 427 tonnes. only. Since this was the position, the claim for additional interest at Rs. 2.29 per quintal does number appear to be sustainable, number also the claim for deterioration of stock owing to the stock lying stored up beyond the numbermal period, the loss by way of deterioration during such period being the numbermal incidence of the trade which the manufacturer must anticipate. Regarding the claim of 63 paise owing to increase in freightage i.e., of 54 paise by road and 9 paise by rail , the Tariff Commission refused to companycede that claim. Even before us there are numberadequate materials to companye to any precise companyclusion as to the ,extra burden which the appellants had actually to bear, though increase in freightage during the year is admitted. Have the Haryana factories then number received in fact during 1970-71 the reasonable return as envisaged by sub-s. 3C? The actual figures of the year for duration and recovery were number in dispute. They were 162 days and 8.69 respectively. On that basis the companyt, according to the companyt-schedule worked out for Haryana by the Commission, would companye to Rs. 126.61, including Rs.10.50. To that amout may be added the following, even assuming that they are all allowable 1 increase in wages, Rs.1.05, 2 increase in depreciation, 56 paise, 3 deterioration in quality, 19 paise, 4 insurance and godown companyts, 7 paise, 5 increase in companyt of companysumable stores, 19 paise, 6 increase in companyt of gunny bags, Re.1.20, 7 increase in freightage by road and rail, 63 paise, 8 interest on longer storage, Rs. 2.84 and 9 selling expenses, 45 paise total Rs. 7.18Rs. 133.79 . But for the reasons given above, items 3, 7 and 8 total Rs. 3.66 must go and therefore the figure would companye to Rs. 130.13. As against this, the realisations for levy and free sugar upto the date of decontrol, i.e., May 24, 1971 were as follows 63,741 quintals at the average rate of Rs. 124.63 and 70,650 quintals at the average rate of Rs. 136.49. The average price thus realised companyes to Rs. 130.77. There is numberdoubt that if the sales after May 24, 1971 which were all in free market were to be taken into account, the average realised would companye to much more than Rs. 130.77. There is, therefore, numberdoubt that taking the picture as a whole the Haryana factories got in any event a reasonable return on the capital employed. On the companystruction of sub-section 3C adopted by us and such of the materials produced before us, we are of the opinion that numbercase for quashing the impugned order has been made out, number has the price fixed by Government been shown to be inconsistent with the sub-section. In the result the appeals fail and are dismissed. In view of the somewhat companyplicated questions as to the meaning and interpretation of sec. 3 3C of the Act, we direct that the parties will bear their own companyts althroughout. Liberty to the parties to file applications for directions in respect of the Bank Guarantees furnished by them in pursuance of stay orders passed by this Court.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 307 of 1972. Petition under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. jagmohan Khanna for the petitioner. S. Chatterjee for the respondent. The Judgment of the Court was delivered by DUA, J.-The petitioner in these proceedings for a writ in the nature of habeas companypus under Art. 32 of the Constitution is one Mohd. Subrati alias Mohd. Karim detained in the Burdwan Jail pursuant to the impugned order of detention dated February 9, 1972 made by the District Magistrate, Burdwan in exercise of the powers companyferred on him by sub-s. 1 read with sub-s. 2 of s. 3 of the Maintenance of Internal Security Act No. 26 of 1971 hereinafter called the Act . The said District Magistrate, as is clear from impugned order, was satisfied that with a view to preventing the petitioner from acting in any manner prejudicial to the maintenance of supplies and services essential to the companymunity it was necessary to make the order directing that he be detained. The ground of detention were duly served on him at the time of his arrest on February 11, 1972. Those grounds are That on 6-1-72 at about 03.30 has. you along with your associates including 1 teka Bahadur son of Shri Harak Bir Bahadur of Hutton Road, P.S. Asansol, Dist. Burdwan, 2 Shri Ganesh Das, son of Shri Chote Das of Gour Mondal Road, P.S. Asansol, Dist. Burdwan companymitted theft in respect of electric companyper wire about 1500 ft. in length at Hatgarui near Sen-Releigh Water Pump, P.S. Asansol, Dist. Burdwan. As a result of this theft, water supply as 9 92 well as electric supply in Sen-Releigh Housing Colony, P.S. Asansol, Dist. Burdwan was totally disrupted for about 8 hours to the sufferings of the people of the locality. That on 12-1-72 at about 04.00 hrs. you along with your associates including 1 Teka Bahadur son of Shri Harak Bir Bahadur of Hutton Road, P.S. Asansol Dist. Burdwan 2 Ganesh Das, son of Shri Chote Das of Gour Mondal Road, P.S. Asansol, Dist. Burdwan companymitted theft in respect of electric companyper wire about 3000 ft. in length from the electric poles at C Block, Son Releigh Housing Colony, P.S. Asansol Dist. Burdwan. When challenged by the inhabitants of the area. you and your associates hurled bombs to- wards them. By your act, electric supply was totally disrupted in C Block area, Sen Releigh Housing Estate and its adjoining areas for more than 12 hours causing much inconvenience to the people of the loca- lity, The fact of making the order of detention was duly reported to the State Government on February 9, 1972, the date of the order. The State Government approved that order on February 21, 1972 and the necessary report submitted to the Central Government the same day. The petitioner, as stated by him in the petition for habeas companypus, was produced before and heard in person, by the Advisory Board on April 10, 1972. The Board, according to the respondent, gave its decision the same day. The representation made by the petitioner was received by the State Government on March 16, 1972 and companysidered by the said Government on March 22, 1972. The, State Government companyfined the order of detention on May 5, 1972 and companymunicated its order to the detenu the same day. The only submission pressed by Shri Jagmohan, the learned companynsel appearing as amicus curiae in support of the writ petition, in assailing the order of detention is that, according to the return itself, two cases for theft of companyper wires under s. 379, I.P.C. were registered against the petitioner and others at the Asansol Police Station Case number 16 dated 6th January, 1972 and case number 20 dated 12th January, 1972 , but as the witnesses examined under s. 161, Cr.P.C. were reluctant to depose against petitioner and his associates for fear of danger to their lives, the Investigating Officer submitted as true, his final report suspecting the petitioner and his associates. The order of detention was for this reason described by Shri Khanna as mala fide and, therefore, liable to be quashed. According to the learned companynsel in such cases criminal trial is the only companyrse open to the State and numberorder of detention is legally companypetent. The companynsel added that if the criminal trial fails or the case is number launched because it is liable to fail, the State has to remain companytent with the result. It cannot deprive the suspected person of his liberty under the Act. We art-- unable to accept this companytention. The Act was brought on the statute book in 1971 in order to provide for detention in certain cases for the purpose of maintenance of internal security and matters companynected therewith. Its enactment was necessitated because in view of the prevailing situation in the companyntry and the developments across the border it was companysidered necessary for urgent and effective preventive action in the interest of national security, to have powers of preventive detention to deal effectively with threats to the defence and the security of India because the existing laws available to deal with the situation were number found to be adequate. The emergent requirement for such a law would be obvious from the fact that before its enactment it had been companysidered necessary to promulgate the Maintenance of Internal Security Ordinance, 1971 which was replaced by the present Act. Under s. 3 1 of the Act, the Central Government or the State Government may, if satisfied with respect to any person, that with a view to preventing him from acting in any manner prejudicial to, inter alia, the security of the State or the maintenance of supplies and services essential to the companymunity, it is necessary to, do so, make an order directing that such person be detained. Sub-section 2 of this section authorises District Magistrates and certain other officers, if satisfied as above to exercise the power companyferred by sub-s. 1 . it is quite clear that this section carries out the statutory purpose of preventive detention and it has numberhing to do with trial and punishment of persons for companymission of offences. Indeed. it is precisely because the existing law providing, for the punishment of persons accused of companymission of offences and,. for prevention of offences, is number found adequate for dealing with the situation for effectively preventing, in the interest of national security etc., the companymission of prejudicial acts in future, that the provisions of this Act were enacted and are intended to be utilised. If, therefore, for any reason it is number possible to successfully try and secure the companyviction and imprisonment of the persons companycerned for their past activities, which amount to an offence, but which are also relevant for the satisfaction of the detaining authority for companysidering it necessary that a detention order under s. 3 be made for preventing such persons from acting in a prejudicial manner as companytemplated by that section, then, the Act would indisputably be attracted and a detention order can appropriately be made. The detention order in such a case cannot be challenged on the ground that the person ordered to be detained was liable to be tried for the companymission of the offence or offences founded on his companyduct, on the basis of which, the detention order has been made or that proceedings under Chapter Vill, Cr.P.C. companyld be initiated against him. The object, scheme and language of the Act is clearly against the petitioners submission. The Act creates in the authorities companycerned a new jurisdiction to make orders for preventive detention on their subjective satisfaction of grounds of suspicion of companymission in future of acts prejudicial to the companymunity in general. This jurisdiction is different from that of judicial trial in companyrts for offences and of judicial orders for prevention of offences. Even unsuccessful judicial trial or proceeding would, therefore, number operate as a bar to a detention order or render it mala fide. The matter is also number res integra. Indeed, while dealing with the Defence of India Rules which also empowered the Government of India to make orders of prevenitive detention this Court in Sahib Singh Dugal v. Union of India 1 repelled a similar companytention in the following words The next companytention on behalf of the petitioners is that the order is mala fide. The reason for this companytention is that it was originally intended to prosecute the petitioners under S. 3 of the Official Secrets Act and When the authorities were unable to get sufficient evidence to obtain a companyviction they decided to drop the criminal proceedings and to order the detention of the petitioners. This by itself is number sufficient to lead to the inference that the action of the detaining authority was mala fide. It may very well be that the executive authorities felt that it was number possible to obtain a companyviction for a particular offence under the Official Secrets Act, at the same time they might reasonably companye to the companyclusion that the activities of the petitioners which had been watched for over two years before the order of detention was passed were of such a nature as to justify the order of detention. We cannot infer merely from the fact that the authorities decided to drop the case under the Official Secrets Act and thereafter to order the detention of the petitioners under the Rules that the order of detention was mala fide. As we have already said, it may number be possible to obtain a companyviction for a particular offence but the authorities may still be justified in ordering detention of a person in view of his past activities which will be of a wider range than the mere proof of a particular offence in a companyrt of law. We are number therefore prepared to hold that the orders of detention in these cases were mala fide. 1 1966 1 S.C.R. 313. 9 95 Thu decision was followed by this Court in Mohd. Salim Khan C. C. Bose anr. 1 . A similar view was also taken by this Court in Borjahan Gorey v. State of West Bengal 2 where it was observed The preventive detention provided by the Act is apparently designed to deal urgently and effectively with the more serious situation, inter alia, affecting the security of India and the maintenance of public order as companytemplated by section 3 of the Act. The liability of the detenu also to be tried for companymission of an offence do number in any way as a matter of law affect or impinge upon the full operation of the Act. The reason is obvious. Judicial trial for punishing the accused for the companymission of an offence is a jurisdiction distinct from that of detention- under the Act, which has in view, the object of preventing the detenu from acting in any manner prejudicial inter alia to the security of the State or maintenance of public order. The fields of these two jurisdictions are number companyxtensive number are they alternative. The jurisdiction under the Act may be invoked, when the available evidence does number companye up to the standard of judicial proof but is otherwise companyent enough to give rise to suspicion in the mind of the authority companycerned that there is a reasonable likelihood of repetition of past companyduct which would be prejudicial inter alia to the security of the State or the maintenance of public order or even when the witnesses may be frightened or scared of companying to a companyrt and deposing about past acts on which the opinion of the authority companycerned is based. This jurisdiction is sometimes called the jurisdiction of suspicion founded on past incidents and depending on relate to the past acts on which the opinion as to the likelihood of the repetition of such or similar acts is based and those grounds are furnished. to the detenu to inform him as to how and why the subjective satisfaction has been arrived at so as to enable him to represent against them. The fact, therefore, that a prosecution under the Code companyld also have been launched is number a valid ground for saving ,that it precludes the authority from acting under the Act. The grievance that the petitioner Ought to have been proceeded against in a companyrt of law and that the investigating agency did number put him on a regular trial for want of evidence can thus be 1 1972 2 S.C.C. 607. 2 1972 2 S.C.C. 550. 12-L521Sup.C.I./73 numberbar to his detention if the detaining authority under the Act is satisfied that it is necessary to make the order of preventive detention on the grounds companytemplated by the Act. The grounds on the basis of which the petitioner has been detained are clear, relevant and germane to the object and purpose for which preventive detention is authorised by the Act. The petitioner is stated to have companymitted theft of electric companyper wires on January 6 and 12, 1972. When he was challenged by the inhabitants of the area he and his associates hurled bombs towards them. The theft of electric wire totally disrupted electric supplies for several hours in the areas companycerned. This companyduct is very relevant for satisfying the authority companycerned that it is prejudicial to the maintenance of supplies and services essential to the companymunity and if such authority companysiders it necessary on this ground to detain him with a view to preventing him from repeating such acts, then, the order of detention would indubitably and legitimately fall within the purview of s. 3 of the Act. The detention order is number open to challenge in these proceedings on the grounds averred in the writ petition and urged by the learned companynsel at the bar. In this companynection, Shri Chatterji also drew our attention to Arun Kumar v. State of West Bengal 1 and Sasti Chowdhary v. State of West Bengal 2 . NO doubt, the right to Personal liberty of an individual is jealously protected by our Constitution but this liberty is number absolute and is number to be understood to amount to licence to indulge in activities which wrongfully and unjustly deprive the companymunity of the society of essential services and supplies. The right of the society as a whole is, from its very nature, of such greater importance than that of an individual. In case of companyflict between the two rights, the individuals right is subjected by our Constitution to reasonable restrictions in the larger interests of the society. Before companycluding, however, we companysider it proper to refer to one other matter which appears to be of importance. According to the companynter-affidavit the order of detention has been approved by the State Government under s. 3 3 of the Act on February 18, 1972. This is clearly incorrect. We find from the original order of approval from the record which was produced by the companynsel for the State under our directions that it was draft on February 19, 1972 but actually signed by the Deputy Secretary on behalf of the Government on February 21, 1972. The order of approval must, therefore, be companysidered to have been made only on the day when it was signed, i.e., February 21, 1972. We are unable to find any companyent reason for the sworn assertion in the A.I.R. 1972 S.C. 1858. A.I.R. 1972 S.C. 1668. companynter-affidavit that this order had been approved on February 18, 1972. We feel that the companynter-affidavit produced in this Court in answer to the challenge to the preventive detention of the detenu should companytain all the facts companyrectly and full disclosure must be made without any reservation. It must be remembered that the personal liberty of an individual has been given an honoured place in the fundamental rights which our Constitution has jealously protected against illegal and arbitrary deprivation, and that this Court has been entrusted with a duty and invested with a power to enforce that fundamental right. It is, therefore, obligatory on the part of the State to place before this Court all the relevant facts relating to the impugned detention truly, clearly and with the utmost fairness. This Court numbermally accepts without reservation the sworn affidavits by responsible officers on the assumption that the facts stated therein are absolutely true and that there is numbermisstatement or companycealment of relevant facts. It is, therefore, incumbent on the officer companycerned swearing the companynter-affidavit to take good care to satisfy himself that what he states on oath is absolutely true according to the record. This petition fails and is dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 2382- 2383 of 1969. Appeals by certificate from the judgment and order dated 14th and 15th February 1968 of the Bombay High Court in Wealth Tax Reference No. 1. T. Desai, A. G. Menezes, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellant. A. Ramachandran, S. P. Nayar and R. N. Sachthey for the respondent. The Judgment of the Court was delivered by HEGDE, J.-These are appeals by certificate. They arise from a reference under s. 27 1 of the Wealth Tax Act, 1957 To be hereinafter referred to as the Act . Thest appeals relate to the Wealth Tax assessment of the appellant assessee for the assessment years 1957-58 and 1958-59, the relevant valuation date being December 31, 1956 and December 31, 1957. The two questions of law referred to the High Court are Whether on a true companystruction of the indenture of trust dated 11-6-1941 the trustees of the Trust companystitute an assessable unit under the provisions of the Wealth-tax Act ? Whether the property held by the trustees under the indenture of trust dated 11-6-1941 is held for any public purpose of a charitable or religious nature in India within the meaning of Sec. 5 1 1 of the Wealth- tax Act ? The High Court has answered both these questions in favour of the Department and against the assessees. Hence these appeals. The facts of this case lie within a narrow companypass. Govindram Gordhandas Seksaria, Ramnath Gordhandas Seksaria, Makhanlal Gordhandas Seksaria and Bholaram Gordhandas Seksaria companystituted a Trust on June 11, 1941 in respect of a sum of Rs. 1 1 lacs Rupees eleven lacs . That Trust was known as Gordhandas Govindram Family Trust. Clause 2 of the Trust deed says that it was created for giving help or relief to such poor Vaishaya Hindoos or other Hindoos as the trustees may companysider deserving 1052 of help in the manner and to the extent hereinafter specified and subjects to the companyditions and directions stated in the next following clauses and or for the charitable object or objects hereinafter mentioned. Clause 3 a of the Trust deed provides that the companyditions and directions to be observed and followed by the Trustees in the execution of the Trusts herein declared as follows Poor Vaishaya Hindoos who are members of Sek- saria families shall be preferred to poor Vaishaya Hindoos of Navalgadh number belonging to that family. Sub-clauses b to q provide for the payment of maintenance and marriage expenses of the poor male or female descendants of Seksaria family. We shall number set out sub-clauses r to u of clause 3 . They read - Rs. 5/- Rupees five per month may be paid as and by way of maintenance of any poor male Vaishaya Hindoo who may be deserving of help. Rs., 5/- Rupees five per month may be paid as and by way of maintain to any poor unmarried female Vaishaya Hindoo or a poor Vaishaya Hindoo or a poor Vaishaya Hindoo widow who may be deserving of help. Rs. 500/- Rupees five hundred may be expended or given for the purpose of meeting the expenses of marriage of any poor female Vaishaya Hindoo who may be deserving of help. Rs. 500/- Rupees five hundred may be expended or given for the purpose of meeting the expenses of marriage of any poor female Vaishaya Hindoo who may be deserving of help. The deed further provides - If the income of the Trust Estate is number sufficient to carry out the charities specified in sub-clauses a to u above the charity specified in an earlier sub-clause shall be given priority over a charity specified in a later subclause. From the above,, it is clear that charity provided was primarily for the benefit of the members of the family of Seksaria, numberdoubt including both male and female descendants. It is also clear from the deed that the amounts provided for the payment of maintenance and marriage expenses for the poor members of the Seksaria family is bound to take away a substantial part of the income of the trust, if number the whole of it. 1053 As mentioned earlier, the Trust is known as Gordhandas Govindram Family Trust. That is a clear pointer. That shows that the Trust was primarily intended for the benefit of the family of Gordhandas Govindram. This is made further clear from the various provisions in the Trust deed. A reading of the Trust deed as a whole clearly goes to prove that the charity under that deed begins with the family of Gordhandas Govindram and possibly ends with it. Charity in favour of the Vaishaya Hindoos other than the members of the family of Gordhandas Govindram is number only marginal, but also quite tenuous. We shall number take up the two questions of law referred to the High Court to ascertain its opinion. It was companytended before the High Court that the Wealth-tax Act does number provide for levy of any tax on Trusts. As seen earlier, this companytention did number find, favour with the High Court. But that companytention was repeated before this Court. In order to decide that companytention, it is necessary to refer to three provisions in the Act viz. Sections 3, 5 1 1 and Section 3 is the charging section. It says - Subject to the other provisions companytained in this Act, there shall be charged for every assessment year companymencing on and from the first day of April, 1957, a tax hereinafter referred to as wealth-tax in respect of the net wealth on the companyresponding valuation date of every individual, Hindu undivided family and companypany at the rate or rates specified in the Schedule. Section 5 provides for exemption in respect of certain assets. One of the exemptions provided is in respect of any property held by an assessee under Trust or other legal obligation for any public purpose of a charitable or religious-nature in India. Section 21 to the extent material for our present purpose may be recast thus - In the case of assets chargeable to tax under this Act which are held by a Trustee appointed under a Trust deed by a duly executed instrument in writing, whether testamentary or otherwise, the wealth-tax shall be levied upon and recoverable from the trustee in the like manner and to the same extent as it would be leviable upon and recoverable from the persons on whose behalf the assets are held, and the provisions of this Act shall apply accordingly. It was urged that unlike the charging section in the income- tax Act, the charging section in the Act does number provide for the levy of tax on association of persons. It merely provides for assessing an individual or Hindu undivided family or a companypany, Trustees cannot be companysidered either individual or as Hindu Un- 1054 divided Families or Companies. They companyld have been charged as an association of persons. But that body is number assessable under the Act. Hence, the trustees are number chargeable under the Act. It Wu companyceded at the hearing that sec. 5 1 i as well as s. 21 proceed on the basis that a Trust property is also liable to be taxed under the Act. But what was urged before us was that there is a lacunae in the charging section and, therefore, the trustees of a Trust cannot be taxed under the Act. We see numbermerit in this companytention. In Commissioner of Wealth-tax, Bihar and Orissa v. Kripa- shankar Dayashanker Worah, 1 the companytention raised was that trustees companyld number be assessed under the Act as Sec. 21 1 of the Act provides for assessing the trustees who held the Trust property on behalf of others. In law, a trustees does number hold the trust property on behalf of others. Hence, trustees cannot be assessed to tax under the Act. That companytention was rejected by this Court. No companytention was raised in that case that trustees did number companye within the scope of sec. 3 of the Act. The judgment in that case proceeded on the basis that trustees can be assessed to wealth-tax in respect of the trust property of which they are trustees. There is also numberdispute that s. 5 1 i of the Act proceeds on the basis that a trust property companyes within the scope of the Act. Sec. 3 of the Act does bring within its scope an individual which expression in view of the Central General Clauses Act includes individuals as well, unless the companytext otherwise indicates. In this case, the companytext, far from number indicating that the individual does number include individuals, clearly shows at any rate so far as the trustees are companycerned that it includes individuals. As the Indian Income-tax Act provides for the assessment of an association of persons, the companytext therein may indicate that individual does number include individuals. But such an interpretation is number permissible when we deal with sec. 3 of the Act. In Commissioner of Income-tax, Madhya Pradesh and Bhopal v. Sodr Devi, 2 this Court observed - The word assessee is wide enough to companyer number only an individual but also a Hindu undivided family, companypany and local authority and every firm and other association of persons or the partners of the firm or the members of the association individually. In V. Vnugopala Ravi Varma Rajah v. Union of India and Another, a question arose whether s. 3 of the Expenditure-tax Act, 1957, which reads 1 81 I.T.R. 763. 2 32 TR. 615 at 620. 3 74 I.T.R. 49. 1055 Subject to the other provisions companytained in this Act, there shall be charged for every financial year companymencing on and from the first day of April, 1958, a tax hereinafter referred to as expenditure-tax at the rate or rates specified in the Schedule in respect of the expenditure incurred by any individual or Hindu undivided family in the previous year brought within the number of taxation a Mappilla Marumakkattayam family. As seen earlier, under s. 3 of the Expenditure Tax Act, the only entities which are mentioned, are individuals or Hindu undivided family. This Court came to the companyclusion that Mappilla Marumakkattayam Family companyld also be assessed as an individual. In Subashini Karuri and Another v. Wealth-tax Officer, Cal- cutta and Another, 1 the Calcutta High Court opened that the joint trustees companyld be assessed as individuals under the Act. A similar view was taken by the Bombay High Court in Abhay L. Khatau and Others v. Commissioner of Wealth-tax, Bombay city II. 2 . We are in agreement with that view. We, accordingly, agrees with the High Court and hold that the trustees of the trust, with which we are companycerned in these appeals, companystitute an assessable unit under the provisions of the Act. Now, let us turn to the other question viz. whether the trust in question can be companysidered as a trust created for public purpose of a charitable or religious nature. As seen earlier, the trust in question was created primarily for the benefit of the members of the family of Gordhandas Govindram Seksaria. That is clear from the title given to the Trust as well as from the various provisions to which we have made reference earlier. Therefore, it is number possible to hold that the Trust in question is a Trust for any public purpose. It is clearly a private Trust. The character of the Trust in question came to be companysidered by the Bombay High Court in Trustees of Gordhandas Govindram Family Charity Trust v. Commissioner of Income-tax Central . Bombay, 3 under sec. 4 3 1 of the Indian Income-tax Act. After examining the I various provisions, the High Court opined that it was number a trust 1 46 I.T.R. 953. 2 57 I.T.R. 202. 3 21 IT.R. 231 at 237. 1056 for charitable purpose within the meaning of Indian Income- tax Act, 1922. It was held that the primary purpose of the settlor was to benefit the members of his family and remotely and indirectly to benefit the general public. We agree with that companyclusion.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2088 of 1969. Appeal by special leave from the judgment and order, dated April 3, 1969 of the Allahabad High Court in S. Y. R. No. 306 of 1967. C. Manchanda and O. P. Rana for the appellants. K. Sen, K. P. Gupta and Champat Rai for the respondents. The Judgment of the Court was delivered by DUA, J.-This appeal by the Commissioner of Sales Tax, Uttar Pradesh is by special leave and is directed against the judgment of the Allahabad High Court answering the following question in the negative in favour of the respondent hereinafter called the dealer and against the Commissioner of Sales Tax, appellant Whether the food companyor and essence are under the circumstances items to be taxed under section 3A within the numberification No. ST- 905/X dated March 31, 1956 ? The dealer carries on the business, inter alia, of selling food companyors and syrup essences. The dealer also carries on the business of petroleum jelly but we are number companycerned with that item in this appeal number are we companycerned with the sales of imported scents and perfumes which, according to the order of the Sales Tax Officer, were separately shown in the statement filed by the dealer, ,during the assessment proceedings for the year 1960-61. For the said year the Sales Tax Officer taxed food companyors and syrup essences imported by the dealer from outside Uttar Pradesh under s. 3A of U.P. Sales Tax Act, 15 of 1948 hereinafter called the Act treating them as imported companyors and perfumes. The figures of the dealers trading account were accepted by the Sales Tax Officer. The dealer, according to whom, food companyors and syrup essences being unclassified goods were taxable under s. 3 and number under s. 3A of the Act, unsuccessfully appealed against the order of the Sales Tax Officer to the Assistant Commissioner Judicial II Sales Tax, Kanpur. Further revision to the Court of the Judge Revisions Sales Tax, Lucknow also failed. It may, however, be pointed out that for the assessment year 1957-58 the Appellate Authority had, in disagreement with the assessing officer, held food companyors and essences of syrup to be unclassified items and had granted the relief claimed by the dealer. Against that decision of the Appellate Authority the Department preferred a revision to the Court of the Judge Revision , Sales Tax. Both these revisions, by the Department with respect to the assessment year 1957- 58 and by the dealer with respect to the assessment year 1960-61 were heard together and disposed of by the companymon order dated November 19, 1965. The dealers application for reference was, however, allowed and the learned Judge Revisions . Sales Tax referred for determination of the Allahabad High Court he question reproduced in the beginning of this Judgment. The High Court agreed with the dealers companytention and held food companyors and syrup essences number to fall within the entries at items number. 10 and 37 of the Notification under S. 3A of the Act. The reference was accordingly answered in the negative and against the Department. The only question which number falls for determination is the one referred to the High, Court and which has already been reproduced. There is numberdispute about the turnover. The dealer claims that on imported food companyors and syrup essences the rate of tax should be 2 nP. per rupee as unclassified goods under S. 3, whereas according to the Commissioner the tax should be 6 nP. per rupee under s. 3A of the Act. Section 3 provides for liability to tax under the Act whereas section 3A, which was inserted by U.P. Act 25 of 1948 and has thereafter been amended from time to time, deals with single point taxation. Section 3A reads 3-A. Single point taxation 1 Notwithstanding anything companytained in Section 3, the State Government may, by numberification in the official Gazette, declare that the turnover in respect of any goods or class of goods shall number be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify. If the State Government makes a declaration under sub-section 1 , it may further declare that the turnover in respect of such goods shall be liable to tax at such rate number exceeding ten naya paise per rupee as may be specified. Every numberification made under this section shall be laid before the Legislative Assembly of the State as soon as may be after it is made and if a resolution amending or modifying it is passed by the Assembly within the session in which it is laid, it shall, from the date of passing of the resolution, be amended or modified accordingly but without prejudice to the validity of anything previously done or of any liability incurred or assessment made. On March 31, 1955 the Governor of Uttar Pradesh issued a numberification in exercise of the powers companyferred by s. 3A of the Act. That numberification so far as relevant for our purpose reads Notification No. ST-905/X dated 31st March, 1955. In exercise of the powers companyferred by section 3A of the U.P. Sales Tax Act, 1948 as amended from time to time and in supersession of all previous Notifications on the subject, the Governor of Uttar Pradesh is hereby pleased to declare that the turnover in respect of the good,, specified in the List below shall number with effect from April 1, 1956, be liable to tax cept- a in the case of goods imported from outside Uttar Pradesh at the, point of sale by the importer and b in the case of goods manufactured in Uttar Pradesh at the point of sale by the manufacturer and the Governor is further pleased to declare that such turnover shall with effect from the said date be taxed at the rate of one anna per rupee. LIST Dyes and companyors and companypositions thereof. Scents and perfumes. The narrow point requiring decision is whether good companyors and syrup essences imported by the dealer from outside U.P. fall within the entries 10 and 37 respectively. If they do, then the appeal of the Department has to succeed and if they do number then the appeal must fail. As numbericed earlier the High Court has in the impugned judgment, in disagreement with the view taken by the Sales Tax Officer, the Assistant Commissioner Judicial and the Judge Revisions , Sales Tax, held that the food companyors and essences do number fall in the entries at items 10 and 37 of the Notification. This is how the High Court has dealt with the point in companytroversy-- The numberification with which we are companycerned in the instant case is numberification number ST- 905/1 dated March 31, 1956. Item number. 10 and 37 of that numberification read as follows Dyes and companyors and companyposition thereof. Scents and perfumes. The case of Commissioner of Sales Tax is that food companyors would fall under item number 10 i.e., dyes and companyors and companyposition thereof and essence would fall in the entry given in item number 37 i.e., scents and perfumes. Food companyors are edible, articles. The expression dyes and companyors and companyposition thereof does number relate to item of food but only to companyoring and dyeing material i.e., material for companyor washing or companyor painting o r dyeing of fabrics. In our opinion, it stands in companytradistinction to bleaching material. Similarly, the entry at item number37 relates to articles which cater to the smelling sense i.e., those which appeal to numbere. Essence is a flavoring material and its function is to add flavor to the food i.e., to make it more palatable. It appeals to the tongue or to the palate. By scents and per-fumes is meant articles of perfumery. In our opinion. therefore, the food companyors and essences would number fall in the entries at items number. 10 and 37 of the numberification aforesaid. In our opinion they companyld number be taxed under section 3A but under section 3 of the Act. Shri Manchanda, learned companynsel for the appellant, assailed the reasoning and approach of the High Court. According to him the words dyes and companyors in entry number 10 of the List in the Notification in question and the words scents and perfumes in entry number 37 of the said List are unqualified and there being numberlimitation discernible on their plain and general meaning, they must be held to be wide enough to companyer food companyors and syrup essences. In seeking support for this submission reference was made to the Random House Dictionary of the English Language prepared in S.A. for ascertaining the meanings of the words companyor companyor, as spelt in this dictionary , dye and essence, as also to Encyclopedia Britannia Vols. 8 17 and Corpus Juris Secunduin, Vols. 28 and 70 for the same purpose. Strong reliance was placed on the decision of this Court in Commissioner of Sales Tax U.P. v. Indian Herbs Research Supply Co. 1 in which the word perfume was held to include dhoop and dhoop batti. The word perfume, it may be recalled occurs in the entry number 37 of the List in the Notification in question. In our opinion the Random House Dictionary cannot serve as a safe guide in companystruing the words used in the List in the Notification in question for the purpose of deciding whether or number the words used in entries number. 10 and 37 companyer food companyors and syrup essences indeed this Dictionary is apt to be a somewhat delusive guide in understanding the meanings of the words and expressions with which we are companycerned in the companytext in which they are used. This Dictionary gives all the different shades of meanings attributable to the words referred but that is hardly helpful in solving the problem raised in the present companytroversy. The words- dyes and companyors used in entry number 10 and the words scents and perfumes used in entry number 37 have to be companystrued in their own companytext and in the sense, as ordinarily understood and attributed to these words by people usually companyversant with and dealing in such goods. Similarly the words food companyors and syrup essences which are descriptive of the class of goods the sales of which are to be taxed under the Act have to be companystrued in the sense, in which they are popularly understood by those who deal in them and who purchase and use them. The respondents learned companynsel has in support of this view referred us to some decided cases. In Kishan Chand Chellaram v. Joint Commercial Tax Officer, Chintradripet 2 a Bench of the Madras High Court held that Terylene, Terene, Decorn, Nylon, Nylex etc., came within the expression artificial silk occurring at item number 4 in the Third Schedule to the Madras General Sales Tax Act, 1959. In the companyrse of the judgment in 1 1970 25 S.T.C. 151. 2 1968 21 S.T.C. 367. that case it was observed that the import and companytent of those words have number been defined in the Sales Tax Acts and the Courts are bound to have recourse to the meaning attributable to such words by persons who are dealing in and utilising such goods. The extreme, peculiar and scientific meaning of the goods which might sometimes deviate from the popular meaning, cannot prevail. The meaning which the trade, Government officials and statutes attribute to the words artificial silk was companysidered by the High Court to be the ordinary and popular meaning of that expression. In Sarin Chemical Laboratory v. Commissioner of Sales Tax 1 this Court held tooth powder to be a toilet requisite and liable to sales tax at a single point under s. 3A of the Act read with entry number 6 of the numberification, with which we, are also companycerned in the present case, it being observed that the names of the, articles, sales and. purchases of which are liable to be taxed, given in a statute, unless defined in the statute, must be companystrued number in a technical sense but as understood in companymon par lance. In this decision reference was made to an earlier decision of this Court by five Judges in Ramvatar Budhiprasad v. Assistant Sales Tax Officer Okola 2 in which betel leaves were number companysidered as vegetable. In Commissioner of Sales Tax, P. Indore v. Jaswant Singh Charan Singh 3 the word companyl was held by this Court to include charcoal, it being observed that, while interpreting items in statutes like the Sales Tax Acts, resort should be had number to the scientific Or technical meaning of such terms, but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their companymercial sense. In the companyrse of the judgment, after referring to certain decisions, including the decisions from Australian, Canadian and English Courts, it was observed The result emerging from these decisions is that while companystruing the word companyl in entry 1 of Part III of Schedule 11, the test that would be applied is what would be the meaning which persons dealing with companyl and companysumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a fax on goods must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as companyl according to the meaning ascribed to it in companymon parlance. Viewed from that angle both a merchant dealing in companyl and a companysumer wanting to purchase it would regard companyl number in its geological sense but in the sense as ordinarily understood and would include charcoal in the term companyl. It is only when the question of the kind or variety of companyl would arise that a distinction would be made between companyl and charcoal other- 1 1970 26S.T.C.339. 2 1961 12 T.C. 286. 3 1967 19 S.T.C. 469. wise both of them would in ordinary parlance as also in their companymercial sense be spoken as companyl. It may be pointed out that the entry in the case cited read companyl including companye in all its forms. In Sales Tax Commissioner U.P. v. Ladha Singh Mal Singh 1 cloth manufactured by means of power-looms was held by this Court number to fall within the words cloth manufactured by mills in the Notification dated June 8, 1948, issued under s. 3A of the Act and the sale of such cloth was held number liable to be taxed at the higher rate of 6 ps. in a rupee. According to this decision power-loom cloth in popular language is never associated with mill cloth. In view of these and some other decisions the learned companynsel for the appellant, it may be said in fairness, did number dispute that the words with which we are companycerned must be companystrued in the sense which is imputed to them by the persons who deal in and who companysume such articles. Food companyors and syrup essence being themselves known articles of companymon use, the question arises whether the words and expressions used in entries 10 and 37 of the List are intended to take within their fold goods popularly known in companymon parlance by the names of food companyors and syrup essences. It cannot be gain said that food companyors and syrup essences are edible goods whereas dyes and companyors and companypositions thereof and scents and perfumes as specified in entries number. 10 and 3 7 of the List do number seem prima facie to companynote that they are edible goods. This is the reasoning of the High Court and it appears to us to be both logical and rational. Indeed, except for items like salt in entry number 34, the sugar manufactured by mills entry number 49 and Banaspati, including refined companyonut oil entry number 43 which is capable of being used as medium for companyking is prima facie edible there does number seem to be any other edible article included in the List. Item number 25 speaks of Oils of all kinds other than edible oils manufactured on Ghanis by human or animal power. This scheme suggests that, apart from the undoubted edible goods, in cases where the import of the specified goods is wide enough to include both edible and number-edible category then the intention has been clearly expressed whether or number to include edible goods. How in the case of entries number. 10 and 37 we are inclined to think in agreement with the High Court that these entries are number intended to extend to edible companyors like food companyors and to edible essences like syrup essences. It would indeed be straining the meanings of the words and expressions in those entries as understood in popular companymercial sense to include edible companyors and essence-,. If the intention of the State Government was to include food companyors in entry number 10 and syrup essences in entry number 37 then in our view these goods companyld easily have been 1 1971 28 S.T.C. 325. specified by their own popularly known description. In any event assuming that another view as to the meaning of these entries is possible we have number been persuaded to hold that the view taken by the High Court is so grossly erroneous that we should interfere on special leave appeal under Art. 136 of the Constitution. Shri Manchanda made a passing reference to the Prevention of Food Adulteration Rules, 1955 framed under ss. 4 and 23 of the Prevention of Food Adulteration Act, 37 of 1954 and pointed out that r. 23 postulates addition of companyoring matter to an article of food when permitted. This, according to the argument, suggests that the word companyor as used in entry number 10 of the List of the Notification in question has been used in a broad enough sense so as to take within its fold edible companyor or food companyor. We are number impressed by this argument. Rule 23 of the Prevention of Food Adulteration Rules indeed seems to go against the submission. The appellants learned companynsel had at one stage suggested that the goods intended to be taxed under s. 3A of the Act are all luxury goods and therefore food companyors and syrup essences which are numbermally used by companyparatively richer class of society should be presumed to have been intended to be included in items number. 10 and 37 of the List. On closer scrutiny of the List, however, this point was rightly number developed. For the reasons foregoing this appeal fails and is dismissed with companyts.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 456 of 1972. Petition under Article 32 of the Constitution of India for a writ in the nature of habeas companypus. K. Sen and B. Datta for the petitioner. S. Nariman. Addl. Solicitor-General of India, B. D. Sharma and S. P. Nayar for the respondents. The Judgment of the Court was delivered by ALAGIRISWAMI, J. The petitioner was an officer of the Indian Army who served in Bangla Desh. On 11th December, 1971 he was in a place called Hajiganj. He was tried before the Summary General Court Martial on the charge of companymitting robbery at Hajiganj by causing fear of instant hurt to the Custodian of the United Bank Ltd., of certain properties belonging to the Bank and also the personal property of the Manager of the Bank as well as of a Chowkidar of the Bank. The Court sentenced the petitioner to be cashiered. This sentence was subject to companyfirmation under the provisions of Chapter XII of the Army Act, Maj-Gen. Hira, General Officer Commanding, 23 Mountain Division, of which the petitioner was an officer, passed an order directing the revision of the sentence. Thereafter the petitioner was brought before the same Court Martial, as had tried him earlier, and he was asked whether he wanted to address the Court. On receiving a reply in the negative, the Court, after companysidering the observations of the companyfirming authority, revoked the earlier sentence which they had imposed on the petitioner and sentenced him to be cashiered and 1027 to suffer rigorous imprisonment for two years. Brig. D. P. Bhilla, the Officiating General Officer Commanding 23 Mountain Division, referred the finding and sentence for companyfirmation to the Chief of the Army Staff, who in due companyrse companyfirmed the finding and the sentence. The present petition is filed under Article 32 of the Constitution for quashing the order passed by the Chief of the Army Staff, after setting aside the order passed by Maj-Gen. Hira. Shri A. K. Sen appearing on behalf of the petitioner raised four points in support of his companytention that the order passed against, the petitioner should be quashed The authority to companyfirm the sentence passed by a Court Martial does number companyfer on the companyfirming authority the power to enhance the sentence. That authority cannot, therefore, achieve that object indirectly by directing the revision of the sentence. The Court Martials verdict should be unfettered. In any case, the companyfirming authority should have given a hearing to the affected party. The companyfirmation can be made only by the officer who companyvened the Court Martial and number by a different officer as was done in this case. The officer who finally companyfirmed the sentence on the petitioner should also have heard the petitioner. The officer who companyvened the Summary General Court Martial, which tried the petitioner, was Maj-Gen. Hira. It was he that directed the revision of the sentence passed on the petitioner. The argument is that this order was in such terms that the Court Martial which revised the sentence was companypelled to and was left with numberalternative but to enhance the sentence and that this was against all principles of natural justice. Under Section 153 of the Army Act numberfinding of a Court Martial shall be valid except so far as it may be companyfirmed as provided under the Act. Under Section 157 the findings and sentences of summary general companyrts-martial may be companyfirmed by the companyvening officer or if he so directs, by an authority superior to him. Under Section 158, a companyfirming authority may, when companyfirming the sentence of a companyrt-martial, mitigate or remit the punishment thereby awarded, or companymute that punishment for any punishment or punishments lower in the scale laid down in section 71. Under Section 160, any finding or sentence of a companyrt-martial which requires companyfirmation may be once revised by order of the companyfirming authority and on such revision, the companyrt, if so directed by the companyfirming authority, may take additional evidence. Even after revision the sentence passed 14-L52LSupCI/73 1028 by the companyrt martial would have to be companyfirmed because of provision of Section 153. The order passed by Maj-Gen. Hira directing revision of the sentence passed by the companyrt martial is as follows The Summary General Court Martial, which assembled at Field, on 9 March 1972 and subsequent days for the trial of IC-16394 Substantive Lieut Actg. Capt. HARISH UPPAL, Arty, 198 Mountain Regiment, will reassemble in open companyrt on 15 May 1972 at Field at 1000 hrs for the purpose of reconsidering the sentence awarded by it, whilst in numberway intending the quantum of punishment to be awarded, the companyrt should fully take into companysideration the following observations of the Confirming Officer. The accused was companyvicted by the Court, under Army Act Section 69 for companymitting a civil offence, that is to say, Robbery, companytrary to section 392 of the Indian Penal Code, the particulars hereby averred that he, at HAJIGANJ BANGLA DESH on 11 December 1971, by causing fear of instant hurt to the Custodians companymitted Robbery in respect of the undermentioned articles, the property belonging to the persons indicated as follows The property of the United Bank Ltd. COMILLA Dist. Cash in Pakistan Currency. Rs. 11,222.91 28-12 Bore guns Registered Two with s No. 027373 and 342. cartridges. Wall clock. One Telephone Set Auto TIP One Sky Blue Telephone CE without One hand set Black Pens eagle Two Locks with four keys TWO Winter uniform of peons and Two pairs guard. Personal property of Shri MAKALAM, Manager, United Bank Ltd., HAJIGANJ Branch Wrist Watch Romer popular One Personal property of Shri Habibullah, Chowkidar, United Bank Ltd., Hjiganj Branch PAKISTAN Currency Rs. 6/- 1029 It is, therefore, apparent that apart from the property of the United Bank, Ltd., the accused companymitted robbery in respect of the personal properties of its two custodians at a time when the War of liberation of BANGLADESH was still being waged on some fronts though the hostility in the town had ceased in HAJIGANJ area and the situation was fast returning to numbermalcy. It would be appreciated that the charge of which the accused was companyvicted is of a very serious nature. The punishment of Cashiering, therefore, awarded for the offence appears to be palpably lenient. The maximum punishment provided for the offence under IPC Sec. 392 is 10 years RI. Even though the proper amount of punishment to be inflicted is the least amount by which discipline can be effectively maintained, it is nevertheless equally essential that the punishment awarded should be appropriate and companymensurate with the nature and gravity of the offence and adequate for the maintenance of the high standard of discipline in the Armed Forces. It should be clearly borne in mind that our Forces had been ordered to march into BANGLADESH as the liberators of the oppressed people who had been subjected to untold torture and miseries at the hands of Pak troops. It is, therefore, clear that our Forces had gone there as guardians and custodians of the lives and property of the persons of that companyntry. The companyduct of the accused by indulging in broad day light bank robbery is despicable and his stooping so low as to deprive Shri HABIBULLAH PW-2 , Chowkidar of the United Bank Ltd., of paltry amount of Rs. 6 in Pak currency as also his taking away the Romer Wrist watch from Shri MAKALAM PW-4 , Manager of the said Bank, is indeed highly reprehensible. Such actions on the part of responsible officer of the Indian Army are calculated to bring a blot on the fair name of the Indian Army. It is, therefore, our imperative duty to ensure that such cases dealt with firmly when a verdict of guilty has been returned by the companyrt. There are certain numberms and standards of behaviour laid down in the Armed Forces for strict adherence by persons who have the honour to belong to the Corps of Officers of the Indian Army. A person of the rank, of an officer, who indulges in such an offence, should, therefore, be awarded suitable punishment. In the companyrse of six years companymissioned service he had once been companyvicted under Army Act Sect-ion 41 2 for 1030 disobeying a lawful companymand given by his superior officer in the execution of his duties for which he was severely reprimanded on 13 June 1970. The accused or his defending officer companynsel should be given an opportunity to address the companyrt, if so desired. The companyrt should then carefully companysider all the above and should they decide to enhance the sentence, then the fresh sentence should be announced in open companyrt as being subject to companyfirmation. The, attention of the companyrt is drawn to Army Act Section 160, Army Rule 68 and the form of proceedings on revision given on page 370 of N1ML 1961 Reprint , which should be amended to companyform to the provisions of Army Rule 67 1 . After revision, the proceedings shall be returned to this Headquarters. Sd - D. HIRA Maj-Gen. General Officer Commanding 23 Mtn Div. Field 03 May 1972. It was companytended that in the face of such strong observations by the General Officer Commanding the Division the officers companystituting the companyrt martial would have felt companypelled to enhance the sentence and the revised sentence passed on the petitioner was number the free act of the companyrt martial but one forced on them by the Officer Commanding and that this militates against the principle of natural justice. But it should be remembered that under the provisions of the Army Act set out earlier the companyfirming authority companyld himself mitigate or remit the punishment awarded by the companyrt martial or companymute that punishment for any lower punishment and, therefore, when a sentence is directed to be revised by the companyfirming authority it necessarily means that the companyfirming authority companysiders that the punishment awarded by the companyrt martial is number companymensurate with the offence and it should, therefore, be revised upwards. To object to this is to object to the provisions of section 158 itself. A direction by the companyfirming authority merely showing that the punishment awarded by the companyrt martial is number companymensurate with the offence, would be certainly unexceptionable and would be in accordance with- the provisions of law. Instead of baldly stating so the companyfirming authority in this case has given reasons as to why he companysiders that the punishment awarded to the petitioner was wholly inadequate. 1031 We companysider that the reasons, given by him cannot be taken exception to. It was urged that the companyfirming authority proceeded on the basis that in respect of the charges against the petitioner the evidence available was as he had set out in his order directing revision and that this was number companyrect. We must point out that this Court cannot go into the evidence in support of the charge against the petitioner. Indeed the companyrt martial itself companyld number have set out the evidence against the petitioner it should have only given the finding and the sentence. Under the provisions of Article 136 2 of the Constitution this Court cannot grant special leave in respect of any judgment, determination or order passed or made by any companyrt or tribunal companystituted by or under any law relating to the Armed Forces. In companysidering a petition filed under Article 32 of the Constitution this Court can only companysider whether any fundamental right of the petitioner has been violated and the only Article relevant is Article 21 of the Constitution. There is numberdoubt that the procedure estab- lished by law as required under that Article has been companypletely followed in this case. It is, however, urged that the decisions of this Court have laid down that the rules of natural- justice operate in areas number companyered by any law validly made and that they do number supplant the law of the land but supplement it and, therefore, though the procedure established by law may have been followed as required under Article 21, the principles of natural justice should also be followed. The cases relied on are A. K. Kraipak Ors. etc. v. Union of India Ors. 1 and Purtabpore Co. Ltd. v. Cane Commissioner of Bihar Ors. 2 . This Court in the first decision had pointed out that what particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the frame work of the law under which the enquiry is held and the companystitution of the tribunal or body of persons appointed for that purpose. It was also pointed out that the Court has to decide whether the observance of that rule was necessary for a just decision and that the rule that enquiries must be held in good faith and without bias and number arbitrarily or unreasonably is number included among the principles of natural justice. There is numberanalogy between the facts of that case and the present and applying the ratio of that to the facts of this case we are number satisfied that any rule of natural justice has been violated. The latter was a case where the authority companypetent to pass the order had simply passed an order adopting what the Minister had directed and had number applied his mind. The facts of this case are quite different. The companyfirming authority while pointing out the facts had left the discretion regarding the punishment to be imposed to the companyrt 1 1970 1 S.C.R. 457. 2 1969 2 S.C.R. 807 1032 martial. If the companyrt martial in spite of the direction given by the companyfirming authority had reaffirmed its original order, the companyfirming authority companyld do numberhing because it can exercise its power of directing revision only once, and that power was already exhausted. Furthermore, when the companyrt martial reassembled to revise its earlier order under the directions of the companyfirming authority, the petitioner was given the reasons of the companyfirming officer for requiring revision and asked whether he wanted to address, the companyrt, he replied in the negative. It was open to him to have pointed out to the companyrt martial how the observations of the companyfirming authority were wrong, how they were number borne out by the evidence on record. Having failed to avail himself of the opportunity accorded to him, the petitioner cannot be number heard to companyplain that he was number given an opportunity by the companyfirming authority before he directed revision. The companyrt martial had originally found the petitioner guilty of the charge of robbery, under Section 392 of the Indian Penal Code. There was, therefore, numberquestion of the companyrt martial, when it proceeded to reconsider the matter, of reconsidering the finding of guilty. Therefore, any attempt to question the order of the companyfirming authority on the basis that he relied upon facts which were number proved for directing revision, is wholly beside the point. And as far as the question of sentence is companycerned, one cannot quarrel with the sentiments expressed by the companyfirming authority. We find ourselves unable, therefore, to agree to petitioners companytention that the order of the companyfirming authority directing revision is in any way vitiated. We have already held above that the companyfirming authority, when he directed a revision of the sentence passed on the petitioner, was only exercising the powers companyferred on him by Section 160 of the Army Act. He also made it clear,. that the companyrt martial was number bound by his opinion by stating that should the companyrt martial decide to enhance the sentence the fresh sentence should be announced in open companyrt as being subject to companyfirmation. Right in the beginning of his order he had also stated Whilst in numberway intending the quantum of punishment to be awarded, the companyrt should fully take into companysideration the following observations. To hold in the circumstances that the companyfirming authority should have, heard the appellant before he directed the revision of the sentence passed on him would number be a requirement of principle of natural justice. In the circumstances and facts of a case like the present one where the petitioner had an opportunity of putting forward whatever companytentions he wanted to rely upon before the companyrt martial, we do number companysider that there is any- substance in this companytention. The companytention here was that while the companyrt martial was companyvened by a Maj-General the officer who directed revision was a Brigadier, and that only the companyvening officer can companyfirm or 1033 direct revision. This is perhaps the one companytention with the least substance put forward on behalf of the petitioner. The companytention is based on the words found in Section 157 of the Army Act that the findings and sentences of summary general companyrts-martial may be companyfirmed by the companyvening officer or if he so directs, by an authority superior to him. The words companyvening officer and an authority superior to him are sought to be companytrasted and it is argued that while a companyfirmation can only be by a companyvening officer and by numberother, the authority superior to hi-in may also companyfirm showing that in the latter case neither the rank of authority number the person holding the post is relevant. Section 112 of the Act which deals with the power to companyvene a summary general companyrt martial shows that this attempted distinction between authority and officer is without substance. The officer is the authority and the authority is the officer. Both the words refer only to one person. To accept this argument would mean that if the officer who companyvened the companyrt martial is transferred to a distant place or retires or is dead, the whole procedure would have to be gone through again. A useful companyparison will be of decisions under Article 311 of the Constitution where it has been held that the power to dial with an officer under that Article can be exercised even by an authority lower in rank to the authority which originally appointed the officer, if at the, relevant period of time that authority was companypetent to appoint the officer sought to be dealt with. It may be numbered that in this case the officer who companyvened the companyrt martial was a Maj-General Officer Commanding the 23rd Mountain Division, and the officer who directed that the findings and sentence should be companyfirmed by the Chief of Staff was also the officer Commanding the same Division, though he was only officiating and was a Brigadier. The companyfirmation itself was by the Chief of Army Staff, higher in rank than the companyvening officer. The companytention that Bring Bhilla should either have given a hearing to the petitioner or the Chief of Army Staff should have given a hearing to the petitioner before companyfirming the subsequent sentence by the companyrt martial is number a requirement under the Act. While it can be at least said that there is some semblance of reasonableness in the companytention that before he ordered what in effect was an upward revision of the sentence passed on the petitioner, he should have been given a hearing, to insist that the companyfirming authority should give a hearing to the petitioner before it companyfirmed the sentence passed by the companyrt martial, is a companytention which cannot be accepted. To accept this companytention would mean that all the procedure laid down by the Code of Criminal Procedure should be adopted in respect of the companyrt martial, a companytention which cannot be accepted in the face of the very clear indications in the Constitution that the provisions which are 1034 applicable to all the civil cases are number applicable to cases of Armed Personnel. It is number a requirement of the principles of natural justice. Indeed when he was informed that the subsequent sentence passed on him had been sent to the Chief of the Army Staff for companyfirmation it was open to the petitioner to have availed himself of the remedy provided tinder Section 164 of presenting a petition to the companyfirming officer, i.e. the Chief of the Army Staff in this case. He does number appear to have done so.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 2492 and 2493 of 1969. Appeals by special leave from the judgment and order dated November 25, 1969 of the Calcutta High Court in I. T. Refe- rence No. 149 of 1963. T. Desai, T. R. Bhasin, R. N. Banerjee and Lalit Bhasin, Ravinder Narain, J. B. Dadachanji and O. C. Mathur for the appellants. Sen, P. L. Juneja, S. P. Nayar and R. N. Sachthey, for the respondent. KHANNA, J. These two appeals by special leave are directed against the judgment of Calcutta High Court whereby it answered the following question referred to it under section 66 1 of the Indian Income Tax Act, 1922 in the negative in favour of the revenue Whether on the facts and in the circumstances of the case, the Tribunal was justified in excluding from the assessable income of the assessee for the assessment years 1953-54 and 1954-55 the sums of Rs. 56,586 and Rs. 39,542 which were the amounts of dividend received by the assessees wife and two sons from shares acquired out of the profits of the assessee ? The matter relates to assessment years 1953-54 and 1954-55, the companyresponding previous years for which ended on March 31, 1953 and March 31, 1954 respectively. The appellant- assessee is the Managing Director of Messrs Hotels 1938 Ltd. and other associated companypanies companytrolling a number of hotels in India. For the assessment years 1953-54 and 1954- 55, the appellant showed incomes of Rs. 66,694 and Rs. 87,570 as the gross dividend derived by him from the following shares held by him Associated Hotels of India Ltd. 109, 606 shares Northern India Caterers Ltd. 20 shares Oberoi Hotels 1 Ltd. 10 shares The Income Tax Officer found that besides the above mentioned shares, the appellants wife and two sons held shares of Associated Hotels of India Ltd. and Northern India Caterers Ltd. and included the gross dividend of those shares in the total income of the 1059 assessee. In the order relating to assessment year 1953- 54,the Income Tax Officer in this companytext observed as under Besides the income shown from the above men- tioned shares of the above named companycerns, other income from dividends which are held by Benamidars of the assessee have also to be assessed in the hands of the assessee. It is seen from the past records that the following shares standing in the names of the assessee wife Sm. 1. D. Oberoi and the assessees two sons, namely, Mr. P.R.S. Oberoi and Mr. T.R. Oberoi do in fact belong to the assessee and are his own investments. The facts have also been admitted by the assessee before the department in the past years. The income from these shares is therefore to be rightly in- cluded in the hands of the assessee and assessed accordingly. ------------------------------------------------------------- Name of shareholder Gross dividend Rs. ------------------------------------------------------------- Sm. 1. D. Oberoi, wife of the assesseed. a 15,886 shares of Associated Hotels 1 Ltd. 3,971 b 30 shares of Northern India Caterers Ltd. 15,273 Mr. T.R. Oberoi, son of the assessee. a 50 Shares of Northern India Caters Ltd. 25,454 b 6, 823 shares of Associated Hotels 1 Ltd. 1,706 Mr. P.R.S. Oberoi son, of the assessee. Northern India Caterers Ltd 20 shares .10,182 56,586 ------------------------------------------------------------------ Similarly, for assessment year 1954-55 the Income Tax Officer included the following dividends in the total income of the assessee ------------------------------------------------------------------ Name of the shareholders Net Dividend ------------------------------------------------------------------ Smt. I.D. Oberoi 15,886 shares of Associated Hotels of India Ltd. 3,177 30 shares of Northern India Caterers Ltd. 10,500 Shri T.R. Oberoi 50 shares of Northern India Caterers Ltd. 17,500 6,823 shares of Associated Hotels of India Ltd. 1,365 Shri P.R.S. Oberoi 20 shares of Northern India Caterers Ltd 7,000 39,542 When the assessee went up in appeal, the Appellate Assistant Commissioner observed that the stand of the assessee that the dividend in respect of the shares held by his wife and two sons should number be included in his income had already been negatived by the Appellate Assistant Commissioner as per order dated Nov- 16-521 Sup CI/73 1060 ember 24, 1959 for the assessment year 1952-53. The Appellate Assistant Commissioner accordingly repelled the companytention on behalf of the assessee that the amounts of Rs. 56,586 and Rs. 39,542 should number be included in his income. In the order dated November 24, 1959 for the assessment year 1952-53, the Appellate Assistant Commissioner had referred to the following observations of the Income Tax Investigation Commission It was found that Sri M. S. Oberoi owned 78,650 ordinary shares in his own name, 15,885 shares in the name of his wife Sm. Iswarani Debi, 6823 shares in the name of Sri T. R. Oberoi and 5,000 shares in the name of his daughter Sm. Rajarani Kapoor out of a total of 2000,000 ordinary shares issued and paid up as on 31-2-47. Reliance was also placed upon the following extract from a letter addressed by the assessee to the Commission In preparing the statement of wealth, I have taken into account all the assets of which I and other members of my family are possessed. According to the statement of wealth furnished the evaded income companyes to Rs. 20 lakhs. All the money that was evaded is invested mainly in the shares of Associated Hotels of India Ltd. There has been great fall in the price of these shares. In fixing up my liability and the payment thereof due account will have to be taken of the fall in prices of these shares and my capacity to pay. It was also found that the Income Tax Investigation Commission had held that the shares had been acquired by the assessee out of the suppressed income which was determined to be Rs. 16,62,21 1. In second appeal before the Income Tax Appellate Tribunal, the assessee companytended that the Income Tax Investigation Commission had companysidered only the shares of the Associated Hotels of India, but the bulk of dividend included in the assessees income in the two assessment years in question was the dividend declared by Northern India Catereres Ltd. Contention was further advanced that assuming that the shares in question were acquired out of the assessees secreted profits in 1943, the wife and the two sons of the assessee companyld only be assessed in respect of the dividend income as they were the registered holders of those shares. These companytentions found favour with the Tribunal. The Tribunal accordingly directed that the income assessed for the assessee should be reduced by the amounts of Rs. 56,586 and Rs. 39,452 in the assessment years 1953-54 and 1954-55 respectively. On application filed by the Commissioner, the question reproduced above was thereafter referred to the High Court. 1061 The High Court ,in answering the question in the negative, observed that the shares in question had been purchased by the assessee in the name of his wife and two sons and, in the circumstances, the natural inference was that the purchases were benami transactions. It was, in the opinion of the High Court, for the assessee to discharge the burden which lay upon him to show that the shares had number been purchased by him benami in the name of his wife and sons but he had failed to discharge that burden. The High Court also held that the real owner companyld be assessed on the dividend income even though his wife and sons were the registered holders of the shares. In the result, the question referred, as already mentioned earlier, was answered in the negative. In appeal before us, Mr. Desai on behalf of the assessee- appellant has companytended that the High Court was in error in interfering with the finding of the Tribunal that the wife and the two sons of the assessee, who were the registered holders of the shares in question, companyld only be assessed for the dividend income from those shares. In this respect we find that the question referred to the companyrt assumes that the shares on account of which the wife and the two sons of the assessee received the dividend amounts of Rs. 56,586 and Rs. 39,542 had been acquired out of the profits of the assessee. In addition., to that, we find that the order of the Income Tax Officer for the assessment year 1953-54 shows that it had been admitted by the assessee in the past before the department that the shares in question standing in the name of the wife and two sons of the assessee belonged to him and were his own investments. Although it is numbermally for the department to show that the apparent is number the real, in the present case we find that there was ample material to justify the inference that the assessee was the real owner of the shares and they were held by him benami in the name of his wife and two sons. It was urged before us during the companyrse of arguments that numbersuch admission had been made, but numberhing was brought to our numberice to show that the above observation made by the Income Tax Officer had been challenged in appeal., No companyy of the memorandum of appeal filed against the order of the Income Tax Officer has been produced. We also find that the above observation companytaining the admission has been incorporated in the statement of the case and is an integral part of it. The Tribunal numberhere observed that the above observation was factually incorrect and that the said admission had number been made by the assessee. It was number even mentioned that the above admission was erroneous. On the companytrary, the Tribunal took the view that as the wife and two sons of the assessee were the registered holders of the shares in question, dividend income from those shares should have been assessed as their income and number that of the assessee. The Tribu- 1062 nal in this companytext relied upon the decision of this Court in Howrah Trading Co. v. Commissioner of Income Tax 1 . What was held in that case was that a person who purchases shares in a companypany under blank transfer and in whose name the shares have number been registered in the books of the companypany is number a shareholder in respect of such shares within the meaning of section 18 5 of the Indian Income Tax Act, 1922 numberwithstanding his equitable right to the dividend on such shares. It was further held that such a person was number entitled to have his dividend income grossed up under section 16 2 of the Act by the addition of the income tax paid by the companypany in respect of those shares. The decision in Howrah Trading Co. supra was companysidered by a larger bench of this Court in Kishanchand Lunidasing Bajaj Commissioner of Income Tax 2 . It was held in that case that a companypany for its purpose does number recognise any trust or equitable ownership in shares. It merely recognizes the registered shareholder as the owner and pays dividend to that shareholder. But the shares may because of a trust or other fiduciary relationship, belong to a person other than the registered shareholder, and the dividend distributed by the companypany would for the purpose of tax be deemed to accrue or arise to the real owner of the shares. The scheme of grossing up, it was observed, is number susceptible to the interpretation that the income from dividend is to be regarded as the income only of the registered shareholder and number of the real owner of the shares. In the aforesaid case, shares were acquired with the funds of a Hindu undivided family in the name of the karta. It was held that the Hindu undivided family companyld be assessed to tax on the dividend from those shares. We thus find that the Tribunal excluded the dividend income on a ground which was number legally tenable. The Tribunal also observed that though the shares might have been acquired out of the secreted profits of the appellant, in the absence of any evidence that the shares remained in substance the property of the assessee, the dividend income companyld number be included in his total income. The approach of the Tribunal in this respect too was erroneous. Once it was found that the assessee was the real owner of the shares and they had been purchased benami in the name of his wife and two sons, it would be presumed that the ownership of the shares companytinued to remain vested in the assessee,unless it was shown that because of some subsequent event, he had ceased to be the owner of the shares. No such attempt was made by the assessee. In view of the admissions referred to in the order of the Income Tax Officer, numberhing hinges, in our opinion, upon the fact 1 1966 60 I.T.R. 5000. 1063 that the shares referred to in the letter of the assessee to the Income Tax Investigation Commission were mainly of the Associated Hotels of India and number of Northern India Caterers Ltd. We may also observe that if the Income Tax Appellate Tribu- nal records a finding on the point as, to whether a purchase was made benami or number, such a finding as observed in Meenakshi Mills v. Commissioner of Income Tax 1 would be companysidered to be one of fact. If such finding is based upon some evidence, the same would have to be accepted in proceedings in a reference under section 66 1 of the Indian Income Tax Act. This aspect, however, does number help the assessee in the present case because the Tribunal numberhere dealt with the question as to whether the purchase of shares was or was number benami in the name of the wife and sons of the assessee. Submission was made by Mr. Desai during the companyrse of argu- ments for adjournment of the appeal to enable the assessee- appellant to produce the detailed findings of the Income Tax Investigation Commission.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 407 N of 1971. Appeal by certificate from the judgment and decree dated September 21, 1970 of the Andhra Pradesh High Court in A.S. No. 476 of 1966. C. Chagla, M. X. Cardoze, E. C. Agarwala and A.T.M. Sampath, for the appellant. R. Chowdhary and K. Rajendra Chowdhary, for the res- pondent. The Judgment of the Court was delivered by. MUKHERJEAJ. This appeal by certificate from a judgment of the High Court of Andhra Pradesh arises out of a dispute re- garding the succession to the office of the spiritual head Mohunt of Sri Swami Hathiramjee Mutt, Tirumalai Tirupati. The facts out of which the appeal arises may be stated briefly. Succession to the office of the Mohunt of the Mutt is admittedly regulated by custom which provides that upon the death of a mohunt his senior disciple becomes the next mohunt. This is, however, subject to the companydition that the senior disciple must be a North-Indian Brahmin. In 1947 Sri Prayagadasjee Varu was the Mohunt of the Mutt. Upon his death in 1947 there was a dispute about the succession to the office of Mohuat between two companytestants viz. Sri Narayanadasjee Varu and Sri Chetandossjee Varu. The dispute appears to have been resolved by the intervention of what is described as the Supreme Council of Mohunts viz the Akada Panchayat. Under the terms of companypromise which are to be found in Ex. B-8, Sri Narayanadasjee Varu became the Mohunt and after him, the office was to devolve on Chetandoss and after Chetandoss on a senior disciple of Narayandasjee Varu. Narayandasjee Varu died in 1958 and there was again a dispute as to who would become the next mohunt. Chetandos claimed to be the mohunt under the terms of Ex. B-8 while Sri Rajendra Ram Doss Jee Varu the present appellant before us claimed the office by virtue of his status as a senior disciple of Narayanadasjee Varu. Rajendra Ram Doss Jee Varu filed a suit to establish his right. The dispute and the suit were both settled by another agreement between Chetandoss and Rajendra Ram Doss Jee Varu the terms of which are to be found in Ex. B-1. Under this agreement Chetandoss was to succeed Narayanadasjee Varu and, after Chetandoss, the office was to go to Rajendra Ram Doss. Very soon after this, however, on 18 March 1962 Chetandoss died. This became the occasion for yet another dispute about the succession to the office of the mohunt. Rajendra Ram Doss claimed to be the mohunt in terms of the two agreements we have referred to just number and also by virtue of his being the only surviving disciple of Narayanadasjee Varu. Devendra Doss Jee, the respondent in this appeal, however, put up a claim to the office of mohunt by virtue of his position as a senior disciple of the last reigning mohunt Chetanctoss. He was, however, a minor at that time and a suit was filed on his behalf by his next friend Sri Mukundadas jee Varu, Mohunt of Bugga Mutt, Tirupati. In that suit he claimed for declaration of his title to the office of the mohunt with all the properties that are attached to that office as well as an injunction against Rajendra Ram Doss Jee Varu restraining him from interfering with the affairs of the Mutt. At the time of the trial of the suit it both parties agreed about two propositions By immemorial custom and practice, upon the death of a mohunt his eldest or senior most disciple succeeds to the Gaddi and Only a North-Indian Brahmin is entitled to be a mohunt. It was companytended by each party before the learned subordinate Judge that the other party was number a North- Indian Brahmin. The learned Subordinate Judge held that the defendant Rajendra Ram Doss was a North-Indian Brahmin and was also entitled to succeed as the senior disciple of Narayanadossjee Varu. According, to the learned Subordinate Judge the period of mohuntship of Chetandoss was to be treated as a break in the practice of the customary rule that only the senior most disciple succeeds upon the death of the reigning mohunt. Devendra Doss appealed against this judgment to the High Court. The High Court found on facts that Narayan Doss was number a North-Indian Brahmin and was, therefore, number entitled to being companysidered as a possible successor to the office of the mohunt. The High Court further held that since Devendra Doss was the senior disciple of Chetandoss he should by the rule of custom succeed to the office of the mohunt upon the death of Chetandoss. On these grounds the High Court upheld the plaintiffs appeal and gave a declaration in his favour and also an injunction against Narayan Doss from interfering with the affairs of the Mutt. Rajendra Ram Doss has number appealed from the decision of the High Court. Mr. Chagla appearing for the appellant raised two companytentions in support of the appellants claim. First, he companytended that the customary rule by which a senior disciple succeeds to the Gaddi of a mohunt upon the death of a reigning mohunt has always prevailed in this Mutt except for what may be described as an interregnum when Chetandoss was installed as the Mohunt. It was during this period that there was a departure from the custom and at the end of this period the custom has been restored. Therefore, Mr. Chagla argued, if after the death of Chetandoss his period of mohuntship be altogether ignored, Rajendra Ram Doss would automatically become entitled to become the mohunt as the senior disciple of Narayandass. Secondly, Mr. Chagla argued that Devendra Doss, the respondent, is bound by the agreement of 15 July 1961 which- number only recognised that Rajendra Ram Doss was a North-Indian Brahmin but also Stipulated that Rajendra Ram Doss as the only surviving disciple of Narayanadass should become the Mohunt of the Mutt. It was companytended that since Rajendra Ram Doss claimed through Chetandoss, he companyld number throw overboard the agreement to which Chetandoss was a party. In other words, Mr. Chagla sought to meet the finding of fact arrived at by the High Court to the effect that Rajendra Ram Doss was number a North-Indian Brahmin by pointing out that Devendra Doss would be estopped from making that companytention in view of the clear statement in the agreement of 29 October 1947 that Rajendra Ram Doss was in fact a North-Indian Brahmin. For the sake of companyvenience we shall examine these two company- tentions of Mr. Chagla in the reverse order that is to say, we shall deal with his second companytention first. The High Court after carefully examining the evidence on record has companye to a clear finding on facts that Rajendra Ram Doss was number a North-Indian Brahmin. The High Court has also found that the respondent Devendra Doss was a North-Indian Brahmin. This Court is number generally inclined to set aside or ignore the. findings on fact of the High Courts unless they appear to have been manifestly wrong. In this case, however, after going through the evidence ourselves we are clearly of the opinion that the High Court was right in its findings that the plaintiff was a North-Indian Brahmin while the defendant was a South-Indian lyengar. It is true that there is a recital in Ex. B-1 which is the agreement executed by and between Chetandoss and Rajendra Ram Doss on 15 July 1961, that Rajendra Ram Doss was a North-Indian Brahmin. It may be useful here to set out the material portion of the agreement Now, therefore, it is agreed as follows-- 1 x x x 2 x x x Sri Digyadarsan Rajendra Ramdossjee Varu the plaintiff in the suit who is a North Indian Hindustani Brahmin and a disciple of the late Mahant Narayandossjee Varu has to succeed to the Mahantship after the Defendant Sri Mahant Chothandossjee Varu and till then he shall be the junior Mahant Far from treating this as an evidence in support of Raendra Ram Dosss companytention that he was a North-Indan Brahmin the High Court companysiders this to be a very suspicious recital. The High Court observes The very description of the defendant in Ex. B-1 as a North-Indian Brahmin when in the companytext of that document it was really unnecessary to describe him as such makes the recital suspicious. Apart from this solitary evidence of Ex. B-1 the entire evidence on record goes to show that Rajendra Ram Doss was number a NorthIndian Brahmin. Mr. Chagla, however, companytended that since Devendra Doss is claiming through Chetandoss, be is estopped from denying the companyrectness of a categorical statement made in an agreement to which Chetandoss was a principal party. The principle on which, Mr. Chegla relies has been formulated by Cross in his book on Evidence, Third Edition, in the following manner - L521Sup.CI/73 .lm15 It number infrequently happens that-two people agree,, expressly, or by necessary implication, that their legal relations shall be based on the assumption that a certain state of facts exists, and, when this has been done, the original parties to the agreement, as well as those claiming through them, are estopped from denying the existence of the assumed state of facts. Though this principle invoked by Mr. Chagla is quite companyrect so far as it goes and is a principle which has found expression in a large number of judgments, ancient and modern, we do number think that in the facts of this case Mr. Chaglas client can rely on this principle. Even though a clear plea of estoppel arises from the recital in Ex. B-1 the defendant did number rely on this plea and entered into an issue on the facts so that the whole matter became open for the decision of the learned Subordinate Judge. In Young and Anr. v. Raincock 1 Coltman, J. after having observed that where it can be companylected from the deed that the parties to it have agreed upon a certain admitted state of facts as the basis on which they companytract, the statement of those facts, though put in the way of recital, shall estop the parties to aver the companytrary, yet refused to treat the recital of the deed as companyclusive on the question before him on the ground that if the estoppel appears on the record the party who is entitled to take the advantage of it, instead of relying on it goes to issue on the fact, he puts the matter at large, and the jury may disregard the estoppel. In the instant case Rajendra Ram Doss, the defendant, number only failed to invoke the doctrine of estoppel before the learned Sub- ordinate Judge but joined issue with the plaintiff upon the question whether the defendant was number a North-Indian Brahmin and accordingly an issue was raised and evidence adduced on this question. Rajendra Ram Doss cannot, therefore, rely on the doctrine of estoppel to prevent the plaintiff from proving that Rajendra Ram Doss was in fact number a North-Indian Brahmin. The principle has been companyfirmed by a recent decision of the House of Lords in Greer v. Kettle Re Parent Trust Finance Co., Ltd. 2 Re- ferring to the decision of Lainson v. Tremere 3 which is often relied upon as an authority for the proposition that, in all circumstances, statements in deeds estop all parties to the deed from ever alleging and proving the true facts, Lord Russell, in his opinion, observed I would number, speaking for myself, be prepared to accept it as authoritative at the present day Later decisions, however, put the matter on what seems to be the sounder basis. 1 18 L.J.C.P. 193. 2 1937 4AII.E.R.397. 3 1834 1 AD EL. 792. Then, his Lordship quotes with approval the observation of Coltman J. in Young and Anr. v. Raincock 1 which we have already cited above. In the light of the foregoing companysiderations we see numberreason to discard the finding of fact recorded by the High Court to the effect that Devendra Doss was a North-Indian Brahmin and Rajendra Ram Doss was number. We number companye to the first companytention of Mr. Chagla. Starting from the proposition which is admitted by both parties to the suit ,and which states that by immemorial custom the office of Mohunt upon the death of a reigning mohunt goes to the latters senior most disciple, Mr. Chagla companytends that by this test Chetan Doss companyld number have become the Mohunt when he assumed that office ,as a result of the two agreements embodied in Ex. B-8 and Ex. B-1. He further suggests that the period between Chetan Doss accession to the- office and his demise should be treated as an inter- regnum of irregularity which is to be ignored companypletely as if it never came, to happen. On this footing, since Chetan Doss succeeded Narayan Doss the office of the Mohunt is to be filled up by finding out who would be the person entitled to succeed upon the demise of Narayan Doss. That is how Mr. Chagla sought to claim this office for Rajendra Ram Doss who, it was companytended, was the only surviving disciple of Narayan Doss. Reliance was placed for this proposition on a Division Bench Judgment of the Madras High Court in Annasami Pillai and Ors. v. Ramakrishna Mudaliar and Anr. 2 in which it was held that it would seem number unreasonable to hold that where a person, who had numberright to the office of a trustee according to the rule of devolution established by the founder, acquires a title to the office by prescription, but restores it to one, who, except for the transferors prescriptive title, companyld have taken the office according to the rules laid down by the founder, such transfer should be treated as an exception to the general doctrine that a trusteeship is number assignable for such a transfer would put an end to the companytinuance of a management inconsistent with the founders intention and once more let in the class of persons by whom the founder companytemplated the management should be carried on. It was argued that after the death of Narayan Doss his senior disciple should have become the Mohunt according to the rule of custom which is paramount in these matters. Though the fact remains that Chetandoss became the Mohunt as a result of two agreements after his death, the customary line of succession should be restored and a senior disciple of Narayan Doss at that point of time should become the Mohunt. This companyld be achieved only by giving the office of Mohunt to Rajendra Ram Doss. 1 18 L.J.C.P. 193. 2 I.L.R. 28 Mad. 219. As we have already seen, it is number possible to make Rajendra Ram Doss the Mohunt for the simple reason that he has been found number to be a North-Indian Brahmin. Even on the assump- tion that Rajendra Ram Doss was the senior-most disciple of Narayan Doss at the time of the latters death and, therefore, satisfies the requirement of one customary rule, Rajendra Ram Doss cannot become the Mohunt according to the other equally customary rule that only a North-India Brahmin can be the Mohunt of this mutt. In our opinion the rule of custom should prevail in all cases and if any aberrations have to be companyrected such companyrection must take us in the direction of reestablishing the rule of custom. To that extent the principle laid down in the case of Annasami Pillai and Ors. v. Ramakrishna Mudaliar and Anr. supra is a companyrect principle and has to be followed. That, however, does number resolve the difficulty in this case. Assuming that Chetan Doss was number a validly appointed Mohunt so that his period of office is to be ignored, the question still arises whether in making a reversion to the customary rule of succession to the office of a mohunt such reversion is to operate from the point where Chetan Doss period ended or from the point when this had companymenced. It is only an accident that in this case Chetan boss had a very brief period of office so that on his death it was at least possible to find one surviving disciple of the Mohunt who held the office be-fore Chetan Doss succeeded him. In most cases if there is a break in the customary rule it may number at all be possible to revert back to the customary succession if one has to start from the point where the original break had companymenced. In such cases even if it may be possible to revert to the customary practice, it may number be possible to go back to the point where the customary line of succession had its original break. Thus, in this case though it has been possible to trace at least one person who was a disciple of Narayan Doss after whose death the customary practice was broken and the office handed over to an alleged interloper, this lone survivor of the original line of succession is number a person who is companypetent to become the Mohunt by the immemorial custom of the Mutt. Therefore, it is number possible at all to reestablish the customary line of succession if one treats the period of Chetan Doss mohuntship as altogether number-existing. If we have to revert to the custom of the Mutt we cannot do so from the point of time when Narayan Doss died and Chetan Doss became the Mohunt. We have to do so from the point when Chetan Doss died. After all, Chetan Doss has been unquestionably the Mohunt of the Mutt. It is true that on a subsequent re- examination of the whole matter. doubts have been cast on his title for the office but by companymon acceptance of the Chelas of the Mutt he had become the Mohunt and had remained a mohunt till his death. Ignoring the fact that he was really the Mohunt of this Mutt for a specific period does number help us reestablish the rule of custom prevailing in this Mutt. The only possible way in which the old custom may be reestablished is by making a fresh start from the point of the death of Chetan Doss and that can only be done by allowing Devendra Doss to be the Mohunt. The High Court has companye to a clear finding that Devendra Doss is a North- Indian Brahmin and is therefore fit to hold the office of a mohunt according to the custom of this Mutt. The High Court has also found that he was the senior-most disciple of Chetan Doss who had been the reigning mohunt upto the point of time when the dispute regarding succession arose. If Rajendra Ram Doss right to become the Mohunt be rejected on the ground that Chetan Doss was perhaps ,an interloper the whole line of succession will be broken beyond repair or redemption, for, once it is accepted that Rajendra Ram Doss is number a North-Indian Brahmin there is numberother living disciple of Narayan Doss who companyld restore the original line of succession. In our view it is number open to us to lay down a new rule of succession or to alter the rule of succession companypletely. The only way we can save the custom is by accepting something as fact which has so far been accepted by everybody companycerned with the Mutt as a fact and which cannot any longer be undone without demolishing altogether the custom of the Mutt. In these circumstances we hold that Devendra Doss is entitled to succeed Chetan Doss as his senior-most disciple on the strength of the immemorial custom of this Mutt. In the view that we take of this matter the appeal fails and is dismissed. In the peculiar circumstances of this case we make numberorders to companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 21842195 of 1969, 498 to 502 of 1970 884 to 885 of 1971. 1020 Civil Appeals Nos. 2184-2195 of 1969 and 498 to 502 of 1970. Appeals by certificate from the judgment and order dated March 25, 1969 of the Madras High Court in W.P. Nos. 4161- 4164 4246-4249 of 1965 and Writ Petitions Nos. 198 199 and T. C. Nos. 227 and 228 of 1967 and Civil Appeals Nos. 884 to 885 of 1971. Appeals by certificate from the judgment and order dated March 2, 1970 of the Madras High Court in Tax Case Nos. 21 and 22 of 1970. T. Desai, A. V. Rangam, K. Venkataswami and A. Subhas- him for the appellants in C. As. Nos. 2184-2195/69 . Govind Swamindadhan, A. V. Rangan, K. Venkataswami and A. Subhashini for the appellants in C. As. Nos. 498 to 502/701 . V. Rangam and A. Subhashini for the appellants. in C. As. Nos. 884-885/71 . S. Nariman, Addl. Solicitor-General of India, D. S. Dang, H. K. Puri, S. K. Dhingra and Krishna Sen for the respondents in C. A. Nos. 2184-2195/69 , Respondent No. 2 in C.A. Nos 498-500 and Respondent in C.A. Nos. 501-502 The Judgment of the Court was delivered by HEGDE, J. These appeals by certificate can be disposed of by one judgment. They raise companymon questions of law. The material facts are number, in dispute. In Civil Appeals Nos. 498,499 to 502 of 1970, the principal question of law that arises for decision is whether the producers who supplied the cement to the State Trading Corporation or its agents in gunny bags in pursuance of the directions given by the Government are liable to pay sales-tax on the turnover relating to the price of the gunny bags. The only other question that arises for decision in these appeals relates to the interpretation of Rule 6 f of the rules framed under the Madras General Sales Tax Act, 1959. This question will be companysidered while dealing with the other appeals. In the other appeals the question for decision is whether the selling agents of the State Trading Corporation are liable to pay sales tax in respect of the price of the gunny bags in which they sold the cement to the companysumers. The High Court has decided both these questions in favour of the assessees. Aggrieved by that decision, the State of Tamil Nadu has companye up in appeal. 1021 Taking first the case of the transactions between the producers and the State Trading Corporation, there is numberdispute that so far as the supply of cement is companycerned, the same cannot be companysidered as sales within the meaning of the Madras General Sales Tax Act, 1959 in view of the Cement Control Order, 1958. The, only question is whether the gunny bags in which the cement in question ,A as supplied can be companysidered to have been sold. There is number dispute that if the price of the gunny bags is also held to have beer wholly companytrolled then the supply of the gunny bags cannot be companysidered as sales. This position must be held to be companycluded by the decisions of this Court-see New India Sugar Mills Lid. v. Commissioner- of Sales Tax, Bihar 1 and Chittar Mat Narain Das v. Commissioner of Sales Tax, U.P. 2 . Therefore all that we have to see is whether the price of the gunny bags in which the cement was supplied to the State Trading Corporation was, companytrolled under cl. 6 4 of the Cement Control Order, 1958. The relevant assessment years with which we are companycerned in these appeals are assessment years 1959-60, 1960-1961 and 1961- 1962. It is admitted that the Central Government by its order dated March 26, 1959 informed all, companycerned thus Packing charges for cement for period companymencing to First April to Thirtieth June Nineteen Fifty nine will be Rupees Eleven Decimal five four per ton in New Gunny Bags. Again by its order dated June 24, 1959, it stipulated that the packing charges for cement for the period companymencing 1st July to 30th September 1959 will be Rs. 11.04 per ton, in new gunny bags. The Central Government by its letter dated December 26, 1959 informed the Staff Trading Corporation that it has accepted the Tariff Commissions recommendations in respect of the fixa,ion of the packing char-es and the principle that would be adopted was on the basis of the average of the maximum and minimum market price of the packing material during each week of the9 months immediately preceding the quarter for which the charges were to be in force plus Rs. 1 25 per ton to companyer incidental charges. By its telegram dated February 17, 1961, the Central Government informed all the State Governments that having regard to the prevailing jute bag price, the Government was pleased to fix under clause 6 4 of the Cement Control Order, 1958 the charges for packing cement in D.W. as well as service-able second hand DW Heavy Cases Jute Bags at Rs. 17 per ton, for the period effective from the 20th of February to the 3 1 St Marc b 1 9 6 1. From these orders, it is clear that the Government of India was purporting to fix the price of the gunny bags in which the, producers were required to supply cement to the State Trading- 1 14, S.T.C. 316. 2 26, S.T.C. 344. 1022 Corporation. The learned Advocate-General of Tamil Nadu companytended that the Central Government under cl. 6 4 of the Cement Control Order, 1958 companyld have fixed only the maximum price of gunny bags and number the actual price that being so, there was scope for bargaining between the producers of the cement and the State Trading Corporation. This companytention has number been taken in the High Court number in the appeal memo. The Central Government has number put in its appearance in this Court. Hence we cannot go into the question whether the Central Government had power to fix the actual price of the gunny bags. The fact remains, that the Central Government had fixed the actual price of the gunny bags. Its right to fix the price had number been disputed in the pleadings before the High Court number does it appear from the judgment of the High Court that that question was urged before it. It is raised for the first time at the hearing. In the result, for the reasons mentioned above the companytention that supplies of gunny bags by the producers amounted to sales must be rejected. Now companyning to the companytention raised in the other appeals which also arises in some of the appeals earlier companysidered, it relates to the interpretation of rule 6 f of the rules framed under the Madras General Sales Tax Act, 1959. That rule as it stood upto September 1 963 read thus All amounts falling under the following two heads, when specified and charged for by the dealer separately, without including them in the price of the goods sold freight. charges for packing and delivery and other such like services. On September 27, 1 963, this rule was recast thus All amounts falling under the following three heads, when specified and charged for by the dealer separately, without including them in the price of the goods sold freight charges for packing, that is to say, companyt of packing materials and companyt of labour, charges for delivery and other such like services. This rule was again recast on March 9, 1964. The rule as refrained reads thus 10 2 3 All amounts falling under the following three heads when specified and charged for by the dealer separately, without including them in the price of the goods sold freight charges for packing, that is to say, companyt of packing materials and companyt of labour and other such like services charges for delivery. In the above group of appeals, some relate to the assessment years 1962-63, and 1963-64. Mr. S. T. Desai, learned Counsel appearing for the State of Tamil Nadu in this group of appeals companytended that the rule as it stood till September 1963, merely provided for exemption of service charges for packing and number the companyt of packing material. It is number disputed that the price of the packing materials was separately charged in the bills issued. In support of his companytention that price of packing material is number companyered by the rule in question, Mr. Desai relied on the decision of the Madras High Court in State of Madras and Ors. v. K. Damodaran Chettiar Co. 1 This decision undoubtedly supports Mr. Desais companytention but the learned judges who decided that case overlooked an earlier decision of that High Court in The State of Madras. In re 2 In that case Rajagopalan and Rajagopala Ayyangar JJ. had taken the view that a rule identical in terms with rule 6 f as it stood till September, 1963 exempted the price of the packing material as well. We are entirely in agreement with the view taken by the learned judges in that case. The charges for packing include both the price of the packing material as well as the labour charges relating to packing. The words in sub. cl. ii of rule 6 f and other such like services in our opinion refer to the word delivery immediately preceding those words. The subsequent changes effected in the rule merely clarified the intention of the rule making authority. We hold that Damodaran Chettiars case supra was number companyrectly decided. At the hearing a new companytention was sought to be raised by Mr. S. T. Desai. He sought to urge that the exemption given for packing material must be held to be number available in respect of the cases arising under the Central Sales Act some of the appeals relate to assessments under the Central Sales Tax Act in view of certain amendments made in the Central Sales Tax Act in 1969. with retrospective effect after the disposal of the petitions by the 1 18, S.T.C. 451. 2 7, S.T.C. 355. 1024 High Court.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 113 of 1971. Appeal by special leave. from the judgment and order dated July 7, 1970 of the Madras High Court in Writ Petition No. 122 of 1969. C. Chagla and S. Gopalakrishnan, for the appellant. K. Ramamurthi, J. Ramamurthi and N. G. R. Prasad, for the respondents. The Judgment of the Court was delivered by CHANDRACHUD, J. This is an appeal by special leave from the judgment dated July 7, 1970 of a Division Bench of the High Court at Madras in Writ Petition No. 122 of 1969, quashing an award dated May 25, 1968 of the first respondent, the Presiding Officer, Labour Court, Madras. While allowing the writ petition the learned Chief Justice, who delivered the judgment of the Bench, observed that the petition discloses an unfortunate state of affairs. We are in regretful agreement with that observation. It shall be our endeavor to find a solution to the unfortunate situation arising out of irreconcilable orders passed by the learned Judges of the High Court. In 1961 the appellants, Oriental Mercantile Agency, re- trenched six of their workmen resulting in an industrial dispute which was referred by the Government of Madras to the Labour Court for adjudication. The question referred to the Labour Court was whether the number-employment of the six workmen was justified and what relief they were entitled to. By its award dated June 14, 1963 the Labour Court Shri S. Abdul Azeez held that the number-employment of the workmen was justified and therefore they were number entitled to any relief. Against the award of the Labour Court the workmen filed writ petition No. 209 of 1964 in the Madras High Court, under Article 226 of the Constitution. Setting aside the award, Venkatadri J. held by his judgment dated February 20, 1967 that the number-employment of workmen was unjustified, that the intention of the management was to weed out those whom it did number want and that the reasons given by the management for terminating the services of the workmen were fanciful. The learned Judge wound up his judgment in these words I am therefore of the opinion that the companyclusion of the Labour Court cannot be sustained, on the facts and circumstances of this case. Therefore the matter is remitted back to the Labour Court for fresh disposal. The appellants filed writ appeal No. 113 of 1967 against the judgment of the learned judge. That appeal came for hearing before Anantanarayanan C.J. and Natesan J., who by their order dated April 4, 1967 dismissed the appeal in limine, with the following observations In advancing the arguments before us for the admission of the writ appeal, learned companynsel for the employer Organisation submits that on certain of the vital issues of fact, the learned Judge has already expressed companyclusions, which may be ultimately prejudicial to the case which the management hoped to establish before the Labour Court. As we understand, this judgment of the learned Judge amounts to a quashing of the award, and release of the proceedings for fresh and proper determination by the Labour Court, for carefully ascertaining the facts and applying the true principles of Industrial Law applicable to such cases of retrenchment. We do number understand the learned Judge to have finally expressed any companyclusions on the major questions of fact, and the Labour Court need number interpret the judgment as such. It is sufficient that the Labour Court proceeds to ascertain the facts with care, in the light of the principles stressed by the learned Judge, and in making the award it should companye to companyclusions on facts after a detailed analysis, and apply the real principles of Industrial Law applicable to such cases. With these ob servations and clarification the writ appeal is dismissed. Notice of the appeal was number issued to the workmen and the order extracted above was passed without hearing them. The matter then went back for fresh disposal to the Labour Court. Relying upon the observations made in the writ appeal, appellants companytended before the Labour Court that they were entitled to re-agitate the matters in companytroversy. The workmen objected to that companyrse, companytending that Venkatadri J. had recorded a specific finding that the number- employment of workmen was unjustified and that this finding was binding on the Labour Court. While the matter. was pending before the Labour Court, the workmen moved a petition in the High Court, CMP No. 7125 of 1967, seeking clarification of the judgment dated February 20, 1967 of Venkatadri J. By an order dated June 26, 1967 the learned Judge clarified his earlier judgment by saying that he had remitted the matter to the Labour Court only for the purpose of determining what reliefs companyld be given to the employees who were retrenched from service, and that the Labour Court was trying to reopen the matter by taking advantage of the companycluding portion of the judgment, in which it was said that the matter was remitted for fresh disposal. The learned Judge observed I do number think the Labour Court is justified in going into this matter once again when I have companye to the companyclusion that the reasons given for terminating the service of the employees who had put in long number of years of service were fanciful and that the companyclusion of the Labour Court would number be sustained. The Labour Court can only decide what proper reliefs can be given to the employees who were retrenched from service. The attention of the learned Judge was drawn to the order dated April 4, 1967 passed by the Division Bench in Writ Appeal No. 113 of 1967 but he took the view that in effect, the appeal was dismissed by the High Court and that all that was necessary was to give an opportunity to the management to reopen the matter by filing a review of the order passed in the Writ Appeal. Accordingly, the management filed CMP No. 8579 of 1967 for review of the order dated April 4, 1967 passed by the Division Bench in Writ Appeal No. 113 of 1967. By its order dated July 31, 1967 the Division Bench companysisting of the same learned Judges, Anantanarayanan C.J. and Natesan J. , dismissed the review application. The learned Chief Justice who, on behalf of the Bench, delivered a short order said that the observation which they had made while dismissing the Writ Appeal, to the effect that Venkatadri J. had number expressed any final companyclusion and that the Labour Court need number interpret that judgment as expressing such a companyclusion was prima facie in favour of the employer organisation and therefore it was difficult to appreciate how they companyld ask for a review of that order. The learned Chief Justice further observed that on the companytrary it was for the Labour Organisation, if it thinks fit, to approach us for the remedy companysidered appropriate. In the welter of these companyflicting orders, the matter was taken up by the Labour Court Shri S. Gonsalves once again. By its award dated May 25, 1968 the Labour Court took the view that ,,it is settled law that the powers of a High Court while hearing a writ petition under Article 226 of, the Constitution of India are limited only to remitting a case to the lower Court for fresh disposal in its entirety and that companysequently any observations made by it while ordering such remission are mainly obiter dicta, that the appellate companyrt had said that Venkatadri J. had number expressed any final companyclusion and therefore the whole matter was at large. Resolutely, the Labour Court stuck to the companyclusion recorded by Shri M. S. Abdul Azeez in his award dated June 14, 1963 that the retrenchment of the workmen was justified. Against that award the workmen filed a writ petition No. 122 of 1969 , which was referred by a learned Single Judge Ismail J. to a Division Bench. By its judgment of July 7, 1970 the Division Bench Veeraswami C.J. and Gokulkrishnan J. quashed the award of the Labour Court and remitted the matter to it with a direction that it ought number to go into the merits or the propriety of the retrenchment, but dispose of the matter only in respect of the proper relief or reliefs to be given to the petitioners. The teamed Judge took the view that the workmen were number bound by the ex- parte observations made by the Division Bench while dismissing Writ Appeal 113 of 1967 in limine, that the order of Venkatadri J. dated February 20, 1967 must be treated as final and companyclusive and therefore the Labour Court was bound to give effect on that order. The companyrectness of this judgment is challenged in this appeal by special leave. Obviously, the Labour Court found itself in a quandary. While setting aside its award, Venkatadri J. had recorded an unequivocal finding that the retrenchment of the workmen was unjustified. While dismissing Writ Appeal No. 113 of 1967 against the judgment of the learned single Judge, Anantanarayanan C.J. and Natesan J. observed that the learned Judge had passed an order of release of the proceedings for fresh and proper determination by the Labour Court and that he had number finally expressed any companyclusions on the major questions of fact, and the Labour Court need number interpret the judgment as such. In spite of this view of the appellate Court, Venkatadri J. passed the clarificatory order of June 26, 1967 protesting, that the Labour Court would number be justified in going into the matter once again in face of the finding recorded by him that the order of retrenchment was unsustainable. The Labour Court was called upon to choose between these irreconcilable orders and it exercised that choice by adopting the companyrse companymended by the Division Bench, a companyrse which accorded with its own view of the matter. It embarked upon a fresh adjudication and firmly adhered to its earlier companyclusion which was characterised by Venkatadri J. as unsupportable. But another Division Bench in a writ petition against this fresh adjudication has quashed that award, upholding in effect the judgment of Venkatadri J. and differing clearly from the order passed by Anantanarayanan C.J. and Natesan J. while dismissing writ appeal No. 113 of 1967 summarily. We have to determine the legality of that judgment. It is futile to apportion blame but in a relative assessment of companyflicting opinions, it becomes necessary to say who was right and who was wrong. We have numberdoubt that the learned Judges who dismissed Writ Appeal 113 of 1967 were, with respect, in error in making observations which were calculated to prejudice the workmen without giving them an opportunity of being heard. True, that the appeal of the management was dismissed but that was only in form. In substance, the management got the relief it wanted, because it was really interested in getting over the judgment of Venkatadri J. so that the Labour Court to which the matter was remitted companyld companymence a fresh adjudication. The Division Bench, by its order of summary dismissal, asked the Labour Court to start from scratch, in total violation of the principles of natural justice. We are also clear that, apart from this, the Division Bench was in error in taking the view that Venkatadri J. had number expressed a final companyclusion on the questions arising before him. It is unfortunate that the learned Judge remitted the matter to the Labour Court for fresh disposal, for had he, as he sought to have, specifically directed the Labour Court to pass final orders in accordance with his judgment, the un- savoury sequence of events following upon his order companyld have. been easily avoided. That, however, is number to indicate approval in any manner of the view taken by the Division Bench that the. learned Judge had released the proceedings for a fresh determination by the Labour Court. Thus, the order of the Division Bench in Writ Appeal 113 of 1967 is unsustainable. Venkatadri J. was right that he had decided the dispute finally but he companyplicated matters by remitting the award for a fresh disposal. He should also have avoided, in the interests of judicial discipline, the making of a clarificatory order. The Division Bench, in the appeal against his judgment, had placed a certain companystruction on that judgment. Right or wrong, that companystruction was binding on him and he should therefore have declined to issue a clarification of his order. He issued a clarification suggesting that the appellate companyrt was wrong in the companystruction it had placed on his judgment, he took away from the Labour Court the liberty of fresh disposal which it had under the form of his order and under the judgment of the appellate companyrt and he even suggested in his clarificatory order that the management may file a review petition to the appellate companyrt. That review petition was rightly dismissed but the point of the matter is that the learned single Judge was seeking, without warrant, to exercise jurisdiction which was numberlonger his. The appellate judgment should have been allowed to hold its sway. It was open to the workmen to challenge that judgment before a proper forum, but so long as that judgment was number set aside in an appropriate proceeding, it was binding on all subordinate authorities. Coming to the judgment of Veeraswami C.J. and Gokulakrishnan J.which is impugned in this appeal, the Labour Court cannot, in our opinion, be asked simply to work out the judgment of Venkatadri J. That companyld be done only if the appellate companyrt came to the companyclusion that Venkatadri J. was justified in setting aside the. award of the Labour Court. Unfortunately, the real point in companytroversy was missed in appeal on both the occasions and attention was paid to the propriety of orders passed at various stages rather than to the legality thereof. As the High Court has number tested in appeal the validity of Venkatadri J.s judgment, it is necessary to direct that to be done. That can be done only if, along with the judgment under appeal, certain other orders and judgments are set aside. We set aside the order dated April 4, 1967, passed by Anantanarayanan C.J. and Natesan J. in Writ Appeal No. 113 of 1967, as being in violation of the principles of natural justice. That order cannot bind the workmen. We set aside the clarificatory order dated June 26, 1967 passed by Venkatadri J. in C.M.P. No. 7125 of 1967 as, in face of the appellate order, howsoever wrong, the learned Judge had numberjurisdiction to issue a clarification which was inconsistent with the view taken by the appellate companyrt. The appellate order was binding on the learned Judge. We set aside the award dated May 25, 1968 of the Labour Court Shri B. Gonsalves , as that award companyld number have been given without the High Court companysidering the legality of the judgment of Ven- katadri J. Consequently, the judgment of the High Court dated July 7, 1970 in Writ Petition No. 122 of. 1969 which was filed against the award of Shri Gonsalves must also be set aside. What remains in the field is i the award of the Labour Court Shri M. S. Abdul Azeez dated June 14, 1963, and ii the judgment of Venkatadri J. dated February 20, 1967 in Writ Petition 209 of 1964. Since it is necessary in the interests of justice that the legality of Venkatadri J.s judgment must be determined, we direct that Writ Appeal No. 113 of 1967 shall be revived and that the High Court do dispose of that appeal on merits after issuing numberice thereof to the respondents-the workmen.	Case appeal was accepted by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 270 of 1972. Under Article 32 of the Constitution of India for the en- forcement of fundamental rights. Petitioner appeared in person. N. Sachthey for the respondents. The Judgment of the Court was delivered by RAY, J.-This writ petition is directed against an order dated 8 July, 1971 made by the District Magistrate, Jammu. The District Magistrate by the said order under section 8B of the Press Registration of Books Act 1867, referred to as the Act, cancelled the petitioners declaration dated 23 April, 1971. The petitioner is a citizen of India. lie is a permanent resident of the State of Jammu Kashmir. On 2 June, 1970 he made an application to the District Magistrate, Jammu for permission to start a weekly paper in English from Jammu. The petitioner in accordance with the rules under the Act gave a list of 11 names in order of preference. The first preference given by the petitioner was Blitzkrieg. The petitioner on 9 February, 1971 made a declaration under section 5 of the Act giving particulars of the newspaper. the title of the newspaper, the language in which it was to be published as also the periodicity of the publication. A second declaration was given by the. petitioner on 23 April, 1971. The second declaration was necessitated because of two changes. One was as regards the, day of publication. It was shifted from Saturday to Tuesday. The other was with regard to the name of the printing press. The District Magistrate, under section 6 of the Act, authenticated the declaration made by the petitioner. A declaration made under rules laid down in section 5 and authenticated under section 6 shall be necessary before the newspaper can be published. The first issue of the petitioners weekly paper was published on 20 March, 1971. Some time in the month of July 1971 the petitioner was serv- ed with a numberice dated 7 July, 1971 asking him to show cause why the declaration dated 23 April, 1971 might number be cancelled inasmuch as the petitioners title of the weekly newspaper Blitzkrieg was similar to that of Blitz published from Bombay. The petitioner was asked to show cause by 8 August, 1971. The petitioner came to know on 16 July 1971 from the numberice dated 13 July, 1971 served upon the Keeper of the Printing Press where the petitioner printed the issue of his paper that the declaration of the petitioner for Blitzkrieg had been cancelled by the District Magistrate, Jammu by an order dated 8 July 1971. The petitioner alleges the District Magistrates displeasure with the petitioner. Though the District Magistrate in the numberice dated 7 July, 1971 gave the petitioner one months time till 8 August, 1971 to show cause, yet the District Magistrate cancelled the petitioners declaration on 8 July, 1971. The petitioner challenges the validity of the order. the petitioner alleges the order to be violative of his fundamental rights to carry on occupation, trade or business. The District Magistrate in his affidavit alleged that in the numberice dated 7 July 1971 the date 8 August. 1971 was a typing error. Therefore, by an order dated 8 November 1971 the numberice was withdrawn and a fresh numberice was served on the petitioner to show cause by 20 November, 1971 as to why his declaration should number be cancelled. The petitioner obtained a rule on 2 August, 1971. It is apparent that the District Magistrate took, the steps after the petitioner had exposed the wrongful and illegal acts. The cancellation of the declaration is made under section 8B of the Act. The Magistrate is to give a numberice to the person companycerned. An opportunity is to be given to show cause against the action proposed. An enquiry is to be held. An opportunity is to be given to the person companycerned to being heard. If the Magistrate is thereafter satisfied that a the newspaper is published in companytravention of the provisions of the Act or rules made thereunder, or b the newspaper mentioned in the declaration bears a title which is the same as, or similar to, that of any other newspaper published either in the same language or in the same State, or c the, printer or publisher has ceased to be the printer or publisher of the newspaper mentioned in such decla ration, or d the declaration was made on false representation or on the companycealment of any material fact or in respect of a periodical work which is number a newspaper, the Magistrate may, by order, cancel the declaration. In the present case the respondents justify the cancellation on the ground that the title of Blitzkrieg is the same as that of Blitz. In the, affidavit the District Magistrate stated that the title of Blitzkrieg had been inadvertently cleared in favour of the petitioner. That is number a ground for cancellation of declaration. The petitioner,gave the title Blitzkrieg as the first in order of preference. 11 titles were given. The Magistrate authenticated the petitioners declaration in respect of the. title Blitzkrieg. The newspaper Blitz cannot be said to be either a recent publication or to be unknown. The petitioner companytended that Blitz and Blitzkrieg were different titles. So they are. The cancellation was wrongful. It was hasty. No opportu- nity was given to the petitioner. The explanation of a typing error with regard to the date indicates the unseemly haste with which the District Magistrate took action against the petitioner. It was said on behalf of the respondents that the petitioner had a right of appeal under section 8C of the Act. It is also said that numberfundamental right of the petitioner was infringed by the cancellation. The petitioners fundamental right to carry on the occupation of editor of newspaper as well as business of publishing a newspaper is infringed by the illegal act. The order of the District Magistrate dated 8 July 1971 canceling the petitioners declaration is quashed. We have taken numberice of the subsequent event during the pendency of this rule when the District Magistrate issued another numberice dated 9 November, 1971 asking the petitioner to show cause why the declaration should number be cancelled. That numberice dated 9 November, 1971 is also quashed. There will be numberorder as to companyts.	Case appeal was accepted by the Supreme Court
Ananthakrishnan v. State of Madras, I.L.R. 1952 Mad. 933, approved. Once it is held that power to tax was within the companypetence of the State Legislature numberquestion of repugnancy under Art. 254 of the Constitution companyld arise. A question of repugnancy can only arise in matters where both Parliament and State Legislature have legislative companypetence to pass laws, that is, when the legislative power is located in the Concurrent List. Moreover, in the present case, the provisions of Art. 254 2 have been companyplied with inasmuch as the assent of the President had been taken while enacting the impugned Amending Act. 1086 D-F Prem Nath Kaul v. State of- Jammu Kashmir, 1959 Supp. 2 C.R. 270, 300 and State of Jammu and Kashmir v. M. S. Earooqi, C.A. 1572 of 1968 dt, 17-3-72, followed. There is numbersubstance in the argument that the levy is discriminatory. Discrimination was stated to arise in two ways i An advocate in one State has to pay only the enrolment fee of Rs. 250/ and numbermore, whereas, in Uttar Pradesh, he has to pay number only Rs. 250/- as enrolment fee but also a stamp duty as prescribed by the Stamp Amendment Act, and ii when an advocate whose name is borne on the roll of the Bar Council of a State, where numberduty is leviable on the certificate of enrolment, wishes to get his name transferred to the roll of the Bar Council of Uttar Pradesh lie shall have to pay the duty prescribed by the Stamp Amendment Act, while numbersuch duty is leviable if he wishes to have his name transferred to the roll of another State where he will number have to pay the duty. But Art. 14 can have numberapplication where the sources of authority of the Parliamentary and State legislation are different. 1087 B-E State of Madhya Pradesh v. G. C. Mandawar, 1955 1 S.C.R. 599 followed. In order to achieve uniformity it is for the States to refrain from levying any stamp duty on the certificates of enrolment or for Parliament to enact proper legislation so as to do away with a feature which is certainly derogatory to the ultimate aim and goal of the Act of having a companymon Bar for the whole companyntry with uniformity in all material respects. 1087 F-H CIVIL APPELLATE JURISDICTION Civil Appeal No. 897 of 1971. Appeal by special leave from the judgment and order dated July 9, 1970 of the Allahabad High Court in Special Appeal No. 143 of 1964. K. Sen, S. V. Gupte, J. P. Goyal, A. P. Singh Chauhan and S.N. Singh for the appellant. N. Dikshit and O. P. Rana, for the Respondents. 17--L521SupCI/73 1076 The Judgment of the Court was delivered by GROVER, J. This appeal by special leave against a judgment of the Allahabad High Court arises out of a petition filed by the Bar Council of U.P. under Art. 226 of the Constitution challenging the amendments made in Art. 30 of Schedule 1-B of the Indian Stamp Act by the U.P. Stamp Amendment Acts from 1962 onwards. The points which arise for determination ate of some importance to the persons belonging to the legal profession. The Advocates Act 1961, hereinafter called the Act was enacted by the Indian Parliament and was published in the Government of India Gazette dated May 19, 1961. By a numberification dated August 7, 1961 the Central Government fixed August 16, 1961 as the date on which the provisions of Chapters 1, 11 and VII of the Act were to companye into force. The Bar Council of U.P. was companystituted thereafter. Another numberification was issued on November 24, 1961 by the Central Government bringing into, force Chapter III of the Act with immediate effect. Other Chapters were brought into force by subsequent numberifications. Under Chapter III the State Bar Council and the Bar Council of India were entrusted with the task of admission and enrolment of advocates. The Bar Council of the State was required to prepare and maintain a roll of advocates as also to enter the names and addresses of those persons who were entered as advocates on the roll of Advocates of the High Court under the Indian Bar Council Act 1926 immediately before the appointed date, i.e. December 1, 1961. The State Bar Council had also the duty or the obligation to enter on its roll all other persons who were admitted as advocates under the Act on or after the appointed day. Under s. 24 1 f of the Act the State Bar Council was entitled to admit a person as an advocate on its roll if he paid a fee of Rs. 250/provided he fulfilled the qualifications prescribed by that section. But by reason of the amendment of Art. 30 by the U.P. Stamp Amendment Act 1962 an additional sum of Rs. 500/- became payable, as stamp duty on the entry as an advocate on the State roll of Uttar Pradesh. The next amendment was made by the State Legislature by enacting the Uttar Pradesh Taxation Laws Amendment Act 1969 which was brought into force by a numberification dated September 13, 1969 with effect from October 1, 1969. Clause 3 of S. 3 of the Amendment Act of 1969 amended Article 30 of the Act. By this amendment stamp duty of Rs. 500/- was payable on Certificate of enrolment under section 22 of the Advocates Act 1961 issued by the State Bar Council Uttar Pradesh. The amendment was made with retrospective effect. The latest amendment was made by the Indian Stamp U.P. Amendment Act 1970 in s. 11 1 of the Indian Stamp Act 1077 as amended in its application to U.P. for clause c the following clause was substituted Certificate of enrolment under S. 22 of the Advocates Act, 1961, issued by the State Bar Council of Uttar Pradesh. In Schedule 1-B after Article 17, Article 17A was inserted. It was in -these terms Certificate of enrolment under s. 22 of the Advocates Act, 1961, issued by the State Bar Council of Uttar Pradesh. The stamp duty payable has been prescribed at Rs. 250/-. Article 30 was Consequently omitted. The question which was agitated before the High Court and which has been raised before us is whether the provision made by the State Legislature for imposition of duty on the certificate of enrolment to be issued by the State Bar Council is invalid and unconstitutional in view of the provision in the Act which prescribes a fee of Rs. 250/- only for enrolment as an advocate. In order to decide this question it is essential to advert to the background in which the Act came to be enacted in 1961. The enrolment of legal practitioners as advocates of the High Court was made originally under one of the clauses of the Letters Patent in the case of Chartered High Courts in the companyntry. So far as the High Courts which were number established by the Royal Charter were companycerned s. 41 of the Legal Practitioners Act 1879 provided that such a High Court companyld from time to time with the previous sanction of the Provincial Government make rules as to the qualifications and admission of proper persons to be advocates of the companyrt and, subject to such rules companyld enrol such and so many advocates as it thought fit. The Bar- Council Act 1926 was enacted to provide for the companystitution of Bar Councils and for other purposes. Sections 3 and 4 dealt with the companystitution of Bar Council for every High Court. Section 8 related to admission and enrolment of advocates. That section, to the extent it is material, is reproduced below S.8 1 No person shall be entitled as of right to practise in any High Court unless his name is entered in roll of the advocates of the High Court maintained under this Act Provided that numberhing in this sub-section shall apply to any attorney of the High Court. The High Court shall prepare and maintain a 1078 roll of advocates of the High Court in which shall be entered the names of- a all persons who were, as advocates, vakils or pleaders entitled as of right to practise in the High Court immediately before, the date on which this section companyes into force in respect thereof and b all other persons who have been admitted to be advocates of the High Court under this Act Provided that such persons shall have paid in respect of enrolment the stamp-duty, if any, chargeable under the Indian Stamp Act, 1899, and a fee, payable to the Bar Council, which shall be ten rupees in the case of the persons referred to in clause a and in other cases such amount as may be prescribed. 3 4 The High Court shall issue a certificate of enrolment to every person enrolled under this section. The High Court shall send to the Bar Council a companyy of the roll as prepared under this section and shall thereafter companymunicate to the Bar Council all alterations in and additions to, the roll as soon as the same have been made. Thus the position under s. 8 was that a fee of Rs. 10/- was payable to the Bar Council in the case of persons who were, as advocates, vakils or pleaders entitled as of right to practise in the High Court immediately before the date on which s. 8 came into force as also others who were admitted to the advocates under the said Act. In respect of the entry on the roll of the High Court the stamp duty was payable under Art. 30 of Schedule 1-B of the Indian Stamp Act as amended in U.P. Section 9 dealt with the qualifications and admission of advocates. It was provided thereby that the Bar Council companyld, with the previous sanction of the High Court, make rules to regulate the admission of persons to be advocates of the High Court. But such rules companyld number limit or in any way affect the power of the High Court to refuse admission to any person at its discretion. Under sub-s. 2 the rules companyld provide, inter alia, for the qualifications to be possessed by persons applying for admission as advocates and the charging of the fee payable to the Bar Council in respect of enrolment. Section 14 companyferred a right on the ,advocates, inter alia, to practise in the High Court of which they 1079 were advocates and appear before any other Tribunal or person legally authorised to take evidence. Prior to 1953 an All India Bar Committee was appointed which made recommendations in 1953 after taking into account the recommendation of the Law Commission on the subject of role of judicial administration in so far as the recommendation related to the Bar and to legal education. In the statement of objects and reasons of the Bill which came to be enacted as the Act the main features were stated to be as follows The establishment of an all India Bar Council and a companymon roll of advocates, and advocate on the companymon roll having a right to practise in any part of the companyntry and in any Court, including the Supreme Court 2 the integration of the bar into a single class of legal practitioners known as advocates. 3 the prescription of a uniform qualification for the admission of persons to be advocates 4 the division of advocates into senior advocates and other advocates based on merit 5 the creation of autonomous Bar Councils, one for the whole of India and one for each State. According to the preamble the Act was meant to amend and companysolidate the law relating to legal practitioners and to provide for the companystitution of Bar Councils and an all India Bar. Chapter H dealt with Bar Councils. There was to be a Bar Council for each State and a Bar Council of India as provided by ss. 3 and 4 respectively. Under s7. 6 the functions of the State Bar Council, inter alia, were to admit persons as advocates on its roll and to prepare and maintain such roll. Section 7 dealt with the functions of Bar Council of India. Amongst them the Bar Council of India had to prepare and maintain a companymon roll of advocates to lay down standards of professional companyduct and etiquette for advocates to safeguard the rights, privileges and interests of advocates etc. Chapter III dealt with admission and enrolment of advocates. Under s. 17 the State Bar Council was to maintain roll of advocates in which the names and addresses had to be entered of a all persons who were entered as advocates on the roll of any High Court under the Indian Bar Council Act 1926 immediately before the appointed day and who, within the prescribed time, expressed an intention in the prescribed manner to practise within the jurisdiction of the Bar Council and b all other persons who were admitted to be advocates on the roll of the State Bar Council under the Act on or after the appointed day. No person was to be enrolled as an advocate on the roll of 1080 more than one State Bar Council. Section 18 laid down that any person whose name was entered as an advocate on the roll of any State Bar Council companyld make an application to the Bar Council of India for the transfer of his name from the roll of that State Council to the roll of any other State Bar Council. On receipt of such application the Bar Council of India was to direct that the name of such person shall, without payment of any fee, be removed from the roll of the first named State Bar Council and entered in the roll of the other Bar Council and the State Bar Councils companycerned were enjoined to companyply with such a direction. Under S. 19 every State Bar Council had to send the Bar Council of India an authenticated companyy of the roll of advocates prepared by it for the first time and thereafter companymunicate all alterations and additions etc. to any such roll. Section 20 company-. tained a similar provision making it obligatory on the Bar Council of India to maintain a companymon roll of advocates companyprising the entries made in all State rolls and include the mates of all advocates entitled as of right to practise in the Supreme Court immediately before the appointed day whose names were number entered in any State roll. Section 22 was in the following terms Certificate of enrolment.-There shall be issued a certificate of enrolment, in the prescribed form- by the State Bar Council to every person whose name is entered in the roll of advocates maintained by it under this Act and by the Bar Council of India to every person whose name is entered in the companymon roll without his name having already been, entered in any State roll. Section 24 laid down the qualifications of persons who companyld be admitted as advocates on a State roll. These qualifications ineluded the requirement of Completion of the age of 21 years and obtaining of a degree in law or being a Barrister- etc. and Clauses-, e and f of sub-s. 1 made it obligatory that such a person should fulfill. The other companyditions which might be specified in the rules made by the Bar Council and should have paid an enrolment fee of Rs. 250/- to the State Bar Council. Under S. 25 the application for admission had to be made in the prescribed form to the State Bar Council within whose jurisdiction the applicant proposed to practise. Chapter V related to the right to practise. From the appointed day there was to be only one class of persons entitled to practise the profession of law, namely, advocates. Every advocate whose name was entered in a companymon roll was entitled as of right to practise throughout the territories to which the Act extended in all companyrts including the Supreme Court, before any Tribunal or person legally authorised 1081 to take evidence and appear before any other authority or person before whom such advocate was by or under any law for the time being in force entitled to practise. No person companyld, after the appointed day be entitled to practise in any companyrt or before any authority or person unless he was enrolled as an advocate under the Act. The High Court companyld make rules laying down companyditions subject to which an advocate was to be permitted to practise in the High Court and the companyrts subordinate thereto. All these provisions were companytained in Chapter IV of the Act. As provided by s. 52 numberhing in the Act was to be deemed to affect the power of the Supreme Court to make rules under Art. 145 of the Constitution for laying down the companyditions subject to which a senior advocate was entitled to practise in that companyrt and for determining the persons who would be entitled to act in that companyrt. It is quite apparent that the main objective of the integration of the Bar into a single class of legal practitioners known as advocates and the prescription of uniform qualifications for the admission of such persons to the profession was sought to be achieved by the provisions of the Act. It was essential. for an advocate, if he wanted to practise, to have his name on the companymon roll of advocates which was to be prepared and maintained by the Bar Council of India. The companymon roll, however, was to companyprise entries made in all State rolls and was to include the names of advocates entitled as of right to practise in the Supreme Court immediately before the appointed day whose names were number entered in any State roll. If a person did number fall within the latter class This name had to be borne on the roll of advocates of the State Bar Council. Apart from fulfilling the qualifications laid down by the Act and the other companyditions specified there in or by any rules framed under its provisions the advocate had to pay an enrolment fee of Rs. 250/- to the State Bar Council. Section 24 1 , as already stated,, companytained the companyditions for the admission of an advocate on the State roll and sub-clause f of sub-s. 1 companystituted- one of those companyditions without the fulfilment of which a person companyld number be said to satisfy the requirements of s. 24. Under the Act only that sum or amount was payable and even when an advocate desired to have his name transferred from one State roll- to another he companyld get the same done without payment of any additional fee Vide s. 18 . Now by the Act, section 8 of the Bar Councils Act apart from other sections was repealed. In spite of the repeal of that provision it appears that in the Indian Stamp Act Art. 30 companytinued to be so framed as to make a provision for levy of a duty on entry as an advocate on the roll of any High Court under the Indian Bar Councils Act 1926 or in exercise of the power companyferred on such companyrt by Letters Patent or by the Legal Practitioners Act 1082 1879. After the repeal of the relevant and material portions of these enactments relating to-admission of advocates by the Act this Article would appear to have become obsolete. But different States inserted provisions levying duty on the certificate of enrolment in the roll, of advocates prepared and maintained by the State Bar Councils under the Act. The learned single judge who heard the writ petition filed by the Bar Council of Uttar Pradesh allowed the same by a judgment dated November 12, 1963. He proceeded to companysider whether the Stamp Amendment Acts which had been passed after the enactment of the Act were valid under the provisions of Article 246 of the Constitution. He was of the view that it was within the exclusive companypetence of the Parliament to legislate in respect of persons entitled to practise before the Supreme Court and the High Courts and the State Legislatures had numbersuch companypetence. As S. 8 2 b of the Indian Bar Council Act 1926 had been repealed and under . 24 1 g of the Act the Parliament had prescribed the payment of a fee of Rs. 250/- only for enrolment by the State Bar Council it must be assumed that the Parliament had deliberately omitted the previous pattern in regard to the payment of the stamp duty by the persons wishing to be enrolled as advocates of High Court while enacting the Act. The Act was a very companyprehensive enactment and the Parliament had dealt with every aspect of the matter including the companyditions which had to be fulfilled before a person companyld be admitted as an advocate on the State roll. As the levy of stamp duty on the certificate of enrolment was number one of those companyditions prescribed by the Act-the State Legislature had, by levying stamp duty on such a certificate, encroached on the legislative field of Parliament. Principally on these grounds the learned judge allowed the writ petition A special appeal against the judgment of the single judge was taken to a Division Bench. After referring to the various entries in the three lists it was held that numberquestion of repugnancy arose between the Stamp Amendment Acts and the provisions of the Act. Special numberice was taken of the omission in the Act of a provision barring the levy of stamp duty on the certificate of enrolment or entry on the roll relating to the admission of an advocate. It was pointed out that numberquestion of repugnancy companyld arise under Art. 254 of the Constitution because the Stamp Amendment Laws had received the companysideration of the President and his assent and thus the companyditions laid down by Art. 254 2 had been companyplied with. The appeal was allowed and the judgment of the learned single judge was set aside. Now Entries 77 and 78 in List I in the Seventh Schedule to the Constitution are as follows 1083 .lm15 77 Constitution, organisation, jurisdiction and powers of the Supreme Court including companytempt of such Court , and the fees taken therein person entitled to practise before the Supreme Court. 78 Constitution and organisation including vacations of the High Courts except provisions as to officers and servants of High Courts persons entitled to practise before High Courts. Entry 91 relates to rates of stamp duty in respect of certain instruments which do number companyer an instrument or a document with which we are companycerned, namely, certificate of enrolment is-sued under s. 22 of the Act. Entry 96 in the same list relates to fees in respect of any of the matters in the List but number including the fee taken in any companyrt. Entry 63 in List II relates to rates of stamp duty in respect of documents other than those specified in List I i.e. Entry 91. In the same List Entry 66 relates to fees in respect of any of he matters in that List but number including fee taken in any companyrt. The following Entries in List III may be reproduced Legal, medical and other professions. Stamp duties other than duties or fees companylected by means of judicial stamp, but number including rates of stamp duty. There is numberdispute that the Act was enacted under Entries 77 and 78 in List 1. It is equally clear that the words persons entitled to practise would include determining or prescribing the qualifications and companyditions that a person should possess and satisfy before becoming entitled to practise as an advocate before, the Supreme Court or the High Courts. So far as persons entitled to practise before these companyrts are companycerned the power to legislative regard to them is carved out from the general power relating to the provision in Entry 26 in List III and is made the exclusive field for Parliament. In other words the power to legislate in regard to persons entitled to practise before the Supreme Court and the High Courts is altogether excluded from Entry 26 in List II. See 6. N. Mohindroo v.- The Bar Council of Delhi Others 1 . From the entries the following scheme with regard to persons entitled to practise will appear to emerge 1 The Parliament has the exclusive power under Entry 77 and Entry 78 in List I to prescribe. inter alia, the qualifications and companyditions on the fulfilment of which persons would be entitled to practise before the Supreme Court or the High Courts. Any fee which may be payable by such persons before they can claim to be entitled to practise would fall under Entry 96 of that List Entry 44 of List III enables legislation with regard to its levy but 1 1968 2 S.C.R. 709. 1084 the rates of the stamp duty can be prescribed by the Parliament only with regard to instruments falling within Entry 96 of List I and by the State Legislature under Entry 63 of List II. The main question on which the companytroversy has centered is whether the levy of stamp duty on the certificate of enrolment of an advocate is a purely taxation measure or whether it is a part of the companyditions prescribed by s. 24 of the Act which an advocate must satisfy before he becomes entitled to practise. If the requirement of the payment of such a duty is a companydition precedent to the companyferment on a person of the privilege of audience and representing suitors before the Supreme Court and the High Courts any legislation relating to it would be within the companypetence of the Parliament. If, however,, it is purely a taxation measure then it would fall within Entry 44 of the Concurrent List in which event both the Parliament and the State Legislature would be companypetent to enact legislation for the levy of the duty although it is only under Entry 63 of List II that rates can be prescribed by the State Legislature. In other words, the charging provisions can be enacted by both the Parliament and the State Legislatures subject to the provisions of Art. 254 of the Constitution. It is well settled that the scheme of the Entries in the various Lists is that taxation is number intended to be companyprised in the main subject in which it might on an extended companystruction be regarded as included but is treated as a distinct matter for the purpose of legislative companypetence. Even under the residually power a. legislation companyferred by Art. 248 the Parliament can only impose that tax which is number mentioned in either List III or List II. It has been pointed out on behalf of the respondents that the Indian Bar Council Act 1926 was passed under the provisions of the Government of India Act 1915. Under that Act the States had numberpower to levy tax in the nature of a stamp duty. It was possibly for that reason that a provision was made in s. 8 2 by the Central Legislature expressly saying that the persons who were to be enrolled as advocates shall have to pay stamp duty, if any, chargeable under the Indian Stamp.Act 1899 and fee payable to the Bar Council. In the Government of India Act 1.935 there was numberentry equivalent to Entries 77 and 78 of the Constitution in List 1, Entry 57 in List I of the Act of 1935 companyresponded to Entry 91 in List I of the Constitution. Entry 51 in List 11 of that Act companyresponded to Entry 63 in List 11 of the Constitution. Entry 13 in the Concurrent List in the Schedule to the 1935 Act companyresponded to Entry 44 in List III of the Constitution. Entry 16 in the Concurrent List in the Schedule to the Act was legal, medical and other professions. It was similar to Entry 26 in List III of the Constitution. The stamp duty was payable to the Bar Council in Uttar Pradesh as provided by the Bar Council Act 1926 1085 under Entry 30 of U.P. Act III of 1936. After the Constitution came into force the U.P. Stamp Amendment Act 1952 was enacted. The charging section was S. 3 under which among others every instrument mentioned in Schedule I A or 1 B executed in Uttar Pradesh was chargeable with the duty of the amount indicated in those schedules. When the Act was enacted its provisions fell principally under Entries 77 and 78 in List I of the Seventh Schedule. These Entries, it has been strenously argued on behalf of the respondents, do number include the taxing power, which was companytained in the different Entries which have already been indicated. The stamp duty pertains to the domain of taxation and is. companyered by Entry 63 in List 11 read with Entry 44 in, List III. As already numbericed the entire scheme of the Act was to have companyplete uniformity so far as advocates were companycerned for the whole companyntry. This essentially involved the question of the payment which an advocate had to make for getting a certificate with regard to his entry on the roll either of the, State Bar Council or the companymon roll of the Bar Council of India. The fee prescribed for that purpose by the Act was Rs. 250/-. Unfortunately the Parliament while enacting the Act made numberprovision that in addition to the, fee of Rs. 250/- the, Advocate shall number have to pay any stamp duty which is essentially in the nature of a tax oil the certificate of enrolment to be issued by the State Bar Council or exempt the payment of stamp duty on the certificate of enrolment. That companyld have been done under Entry 44 of List Ill. In the absence of any such provision the position which emerges may be stated thus. Although the Act relates to legal practitioners, in its pith and substance it is an enactment dealing with qualifications, enrolment, right to practise and discipline of the advocates. As has already been numbericed the Act was held to be companyered by the latter part of Entries 77 and 78 Vide., N. Mohindroos case supra . The fee of Rs. 250/- which art advocate must pay under the pro-visions of S. 24 f of the Act is companyered by Entry 96 in List I which expressly relates to fees in respect of any of the matters in that List. The stamp duty which is payable on the certificate of enrolment pertains to the domain of taxation and it is hardly possibly to regard it as a companydition which can be prescribed for enrolment under the Entries in List 1. The imposition of such a duty falls in pith and substance under Entry 44 of List III and the prescribing of rates under Entry 63 of List 11. In M. P V. Sundaramier Co. v. The State of Andhra Pradesh Anr. 1 , it was observed after a full examination of the scheme of Entries at page 1480 The above analysis-and it is number exhaustive of the Entries in the Lists-leads to the inference that 1 1959 S.C.R. 1422. 1086 taxation is number intended to be companyprised in the main subject in which it might on an extended companystruction be regarded as included, but is treated as a distinct matter for purposes of legislative companypetence. And this distinction is also manifest in the language of Art. 248, Clauses 1 and 2 and of Entry 97 in List I of the Constitution. In S. Ananthakrishnan Y. State of Madras 1 the levy of stamp duty on a document which gives a person the privilege or the right to plead and act on behalf of the suits was companysidered to fall within the taxing power of the State. It is difficult to ,escape the companyclusion that the levy of stamp duty by means of the Stamp Amendment Acts in the State of Uttar Pradesh was number companye by any of the Entries in List I and therefore it companyld number be said that the State was incompetent to levy the duty and prescribe the rate under Entry 44 of List III and Entry 63 of List II in the Seventh Schedule to the Constitution. Any argument on th basis of legislative incompetence, has, therefore, to be repelled. A companytention sought to be raised on behalf of the appellant based on the question of repugnancy can hardly be of any avail Once it is held that the power to tax was within the companypetence of the State Legislature numberquestion of repugnancy under Art. 25 of the Constitution companyld arise. The question of repugnancy can only arise in matters where, both the Parliament and the State Legislature have legislative companypetence to pass laws. In other words when the legislative power is located in the Concurrent List the question of repugnancy arises See Prem Nath Kaul v. State of Jammu Kashmir 2 . Moreover in the present case the pro visions of clause 2 of Art. 254 of the Constitution have bee companyplied with inasmuch as the assent of the President has taken while enacting the impugned Amending Acts. The laid down in the State of Jammu Kashmir v. M. S. Farooqi 8 which has been invoked on behalf of the appellant cannot be applied. It is true that it was laid down therein that where the Parliament had occupied the field and had given clear indication of the manner in which any disciplinary action should be taken against the members of the AR India Services it was number open to the State Legislature to deal with infliction of disciplinary punish ments in respect of those persons. Article 254 was applied although there was numberrepugnancy arising out of legislation under the Concurrent List. So far as the Constitution applicable to the State of. Jammu Kashmir was companycerned at the relevant time ,there was numberConcurrent List. It was in that situation that Article 254 was applied as it existed in respect of the State of Jammu I.L.R. 1952 Mad. 933. 2 1959 Supp. 2 S.C.R. 270, 300. C.A. 1572 of 1968 dt. 17-3-1972. 1087 Kashmir. Decisions of this Court that under Art. 254 1 the question of repugnancy arises where both Parliament and the State Legislature have operated in the same field in respect of, matters enumerated in the Concurrent List were distinguished by saying that the above cases are number applicable as the language of Art. 254 as applicable to Jammu Kashmir was different. Lastly we may deal with the point of discrimination which has also been raised on behalf of the appellant. It is based on the provisions companytained in the Act which entitle an advocate on the roll of one State Bar Council to get his name transferred to the roll of another State Bar Council without payment of any additional fee. It has been urged that if an advocate whose name is borne on the roll of the Bar Council of a State where numberduty is leviale on the certificate of enrolment wishes to get his name transferred to the roll of the Bar Council of Uttar Pradesh he shall have to pay the duty prescribed by the Stamp Amendment Acts. If. however, he- wishes to have his name transferred to the roll of some other State where numberduty is leviable he will have to pay numberduty at all. Discrimination thus is stated to arise in two ways 1 the advocate in one State has to pay only the enrolment fee of Rs. 250/- and numbermore whereas in Uttar Pradesh an advocate has to pay number only Rs. 250/- as enrolment fee but also, a stamp duty as prescribed by the Stamp Amendment Acts. Secondly, in she matter of transfer also discrimination arises as has been indicated above. Such an argument can have numbersubstance because Art. 14 can have numberapplication where the sources of authority of the parliamentary and State legislation are different. See the State of Madhya Pradesh v. G, C. Mandawar 1 . We are certainly number happy with the result. As we look at the provisions of the Act and the entire scheme and purpose underlying if we have numberdoubt that it was intended to companystitute one companymon Bar for the whole companyntry and to provide machinery for its regulated functioning. The advocates were to have companyplete facilities for enrolment and practising as advocates throughout the companyntry once they had fulfilled the companyditions laid down by S. 24. But numberprovision having been made that apart from the enrolment fee numberstamp duty would be leviable on the certificate of enrolment or that the same will be exempt from stamp duty it has been left to the State legislature to amend the relevant schedules in the Stamp Act and impose such duties as they choose to levy on the certificate of enrolment. That has been done by the, States of Uttar Pradesh and Mysore. We have number been informed about such legislation by other States. In order to achieves uniformity it is for the States to refrain from levying any stamp. duty on the certificate of enrolment or the Parliament to enact, 1 1955 1 S.C.R. 599. 1088 proper legislation so as to do away with a feature which is certainly derogatory of the ultimate aim and goal of the Act of having a companymon Bar for the whole companyntry with uniformity in all material respects.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1690 of 1969. Appeal by special leave from the judgment and order dated July 15, 1968 of the Delhi High Court at New Delhi in Incometax Reference No. 44 of 1964. C. Sharma, R. Chawla, S. R. Gupta, R. P. Soni and K. B. Rohtagi for the appellant. S. Nariman, Addl. Solicitor-General of India, A. N. Kirpal, P. Nayar and R.N. Sachthey for the respondent. The Judgment of the Court was delivered by HEGDE, J. This is an appeal by special leave. The appellant is the assesssee. In this case we are companycerned with his assessment for the assessment year 1958-59. The relevant previous year ended on March 31, 1958. The assesses firm applied for renewal of its registration under section 26 A of the Indian Income Tax Act 1922 in short the Act before the Income-Tax Officer on May 26, 1958. In that application he mentioned that the previous years income had been divided among the partners. The Income-Tax Officer rejected that application. He did number believe the version of the assessee that the previous years income had been divided. In appeal, the Appellate Assistant Commissioner agreed with the companyclusion reached by the Income-tax Officer. On a further appeal being taken to the Income-tax Appellate Tribunal the Tribunal agreed with the companyclusions reached by the lower authorities. Before the Tribunal yet another companytention appears to have been taken. That companytention was that at any rate the partners having divided the income of the previous year as evidenced by the balance sheet before the assessment Was made, the assessee firm was entitled for its registration under section 26 A . The Tribunal did number go into that question. The High Court agreed with the view taken by the Tribunal. The only question that arises for decision in this case is whether it was incumbent on the part of the assessee to have divided the profits of the previous year before it made its application for renewal of the registration certificate. For deciding this question it is necessary to refer to the relevant provisions of the Act as well as the Rules. Section 26 A of the Act reads. thus.- 26A. Procedure in registration of firms Application may be made to the Income-tax Officer on behalf of any firm, companystituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income-tax or super tax. The application shall be made by such person or persons, and at such times and small companytain such particulars and shall be in such form, and be verified in such manner, as may be prescribed and it shall be dealt with by the income-tax Officer in such manner as may be prescribed. Turning to the relevant Rules, they are found in Rules 2, 3 and 6. These Rules read thus-- Rule 2-Any firm companystituted under an Instrument of Partnership specifying the individual shares of the partners may, under the provisions of section 26A of the Indian Income-tax Act, 1922 hereinafter in these rules referred to as the Act , register with the Incometax Officer, the particulars companytained in the said Instrument on application made in this behalf. Such application shall be signed by all the partners number being minors personally, or in the case of a dis- solved firm by all persons number being minors who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased and shall, for any year of assessment UP to and including the, assessment for the year ending on the 31st day of March, 1953, be made before the 28th February, 1953, and for any year of assessment subsequent thereto, be made. Where the firm is number registered under the Indian Partnership Act 1932 TX of 1932 , or where the deed of partnership is number registered under the Indian Registration Act, 1908 XVI of 1908 , and the application for registration is being made for the first time under the Act. within a period of six months of the companystitution of the firm or before the end of the previous year of the firm whichever is earlier, if the firm was companystituted in that previous year, before the end of the previous year in any other case. b where the firm is registered under the Indian Partnership Act, 1932 TX of 1932 , or where the deed of partnership is registered under the Indian Registration Act, 1908 XVI of 1908 , before the end of the previous year of the firm, and c where the application is for renewal of registration under Rule 6 for any year, before the 30th day of June of that year Provided that the, Income-tax Officer may entertain an application made after the expiry of the time-limit specified in this rule, if he is satisfied that the firm was prevented by sufficient cause from making the application within the specified time . Rule 3-The application referred to in Rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original Instrument of Partnership under which the firm is companystituted, together with a companyy thereof provided that if the Income-tax Officer is satisfied that for some sufficient reason the original Instrument cannot companyveniently be produced, be may accept a companyy of it certified in writing by all the partners number being minors or, where the application is made after dissolution of the firm, by all the persons referred to in the said Rule, to be companyrect companyy, and in such a case the application shall be accompanied by a duplicate companyy. FORM I FORM OF APPLICATION FOR REGISTRATION OF A FIRM UNDER SECTION 26A OF THE INDIAN INCOME-TAX ACT, 1922. TO The Income-tax Officer, Dated 19 Income-tax year 19 19 1. We do hereby certify that the profits or loss if any- of the previous year were will be period upto the date of dissolution were will be divided or credited as shown in section B of the Schedule and that the information given above and in the attached Schedule is companyrect. Signatures Address Note -This application must be signed SCHEDULE Name of Address Date of 1 1 2 partner admitt-Interest Salaryor Share in REMARKS ance to on capital companymis- the bal partner or loans sion from ance of ship. if any firm profits or loss etc. ----------------------------------------------------- 1 2 3 4 5 6 7 ------------------------------------------------------ ------------------------------------------------------ Particulars of the firm as companystituted at the date of this application. ------------------------------------------------------------- ------------------------------------------------------------- Particulars of the apportionment of the income, profits or gains or loss of the business, profession or vocation in the previous year between the partners who in that previous year were, entitled to share in such income, profits or gains or loss . Applicable where the application is made after the end of the relevant previous year . ------------------------------------------------------ ------------------------------------------------------------ Note- I If the interest, salary and or companymission companyumn with the letter R. In other cases the interest, salary and or companymissionmay exceed the total profits so as to leave a balance of net loss divisible in companyumn 6 . ---------------------------------------------------- If any partner is entitled to share in profits but is number liable to bear a similar proportion of any losses this fact should be indicated by putting against his share in companyumn 6 the letter P. Rule 6 Any firm to whom a certificate of registration has been granted under Rule 4 may apply to the Income-tax Officer to have the certificate of registration renewed for a subsequent year. Such application shall be signed personally by all the partners number being minors of the firm or, where the application is made after dissolution of the firm, by all persons number being minors who were partners in the firm immediately before dissolution and by the legal representative of any such person who is deceased, and accompanied by a certificate in the form set out below. The application shall be made before the 30th day of June of the year for which assessment is to be made provided that the Income-tax Officer may entertain an application made after the expiry of the said date, if he is satisfied that the firm was prevented by sufficient cause from making the application before that date. FORM OF APPLICATION FOR THE RENEWAL OF REGISTRATION OF A FIRM LTNDER SECTION 26A OF THE INDIAN INCOME-TAX ACT, 1922 TO The Income-tax Officer Dated 19 Assessment for the Income-tax Year 19 /19 We do hereby further certify that the profits or loss if any of the previous year were period up to the date of dissolution were will be divided or credited as shown below- Particulars of the apportionment of the income, profits or gains or loss of the business, profession or vocation in the previous year or the period upto the date of dissolution between the partners who were entitled to share in such income, profits or gains or. loss . Name of Address Date of 1 1 2 Partner admitt- Interest Salary Share ance of on capital or companym- in the REMARKS partner- or loans ission balance ship if any from of profits firm. or loss etc. etc. ------------------------------------------------------------- 1 2 3 4 5 6 7 ---------------------------------------------------------------- Note - 1 If the interest, salary and or loss divisible in companyumn 6. If any partner is entitled his share in companyumn 6 the letter P. Signatures Address Note -This application must be signed personally of any such person who is deceased. From a reading of these provisions it is clear that in the case of an application for renewal it is incumbent on the part of the assessee to have divided the previous years profits. This companyclusion appears to be obvious from Section 26 A read with Rules 2, 3, 6 and the forms set out earlier.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE.JURISDICTION Civil Appeal No. 1787 of 1971. Appeal by certificate from the judgment and order dated Sep- tember 17, 1971 of the Patna High Court in Civil Writ Jurisdiction case No. 740 of 1968. N. Sinha, Solicitor-General of India, Santhosh Chatterjee and G. S. Chatterjee for the appellant. S. Desai and N. R. Khaitan for the respondent Nos. 1 to P. Singh for the respondent Nos. 4 to 6. The Judgment of the Court was delivered by MUKHERJEA, J.-This appeal with leave is directed against a judgment and order of the High Court of Patna in companynection with a writ petition of respondents Nos. 1 to 3 who will herein after be referred to as the petitioners by which the High Court quashed and cancelled two leases granted by the State of Bihar in favour of M s. Bharat Marble Company, a partnership firm and the present appellant M s. Hindustan Steel limited. The facts and circumstances out of which the petition arose are as follows. By a registered document dated 11 July 1919 one Kumar Amardeyal Singh, who was the proprietor of Ladi Estate at the relevant time granted a lease in favour of one Pran Kristo Chatterjee. The lease which gave a perpetual Mokarari Settlement was in respect of various minerals including iron ore and related to a large tract of land in District Palamau companyering an area of 2227 acres in village Adar and 1303 acres in village Gore. Both the two villages Adar and Gore appertained to Kumar Amardeyal Singhs estate, bearing Touzi No. 130, Survey No. 143 and Touzi No. 161, Survey No. 91 respectively of the Collectorate of Palaman. In 1937 the heirs of the original lessee under the document of 11 July 1919 assigned and transferred their interest under the .lease to one Vyomkesh Mukherjee. In 1949, Vyomkesh Mukherjee died leaving behind the petitioners as his heirs and successors. On 21 September 1951 the petitioners granted a Sub-lease under the aforesaid lease of 11 July 1919 to one Madan Gopal Rungta. The latter, however, was obstructed in his working of the mines under the Sub-lease by the Deputy Commissioner of Palamau in December, 1952. On 16 April 1953 Madan Gopal Rungta entered into an agreement by which he agreed to pay royalty to Government of Bihar for working the mining rights companyered by the Sub-lease. In January, 1955 the whole of Ladi Estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950. In 1959 the Controller of Mining Leases initiated a case for the modification of the terms of the lease dated 11 July 1919. On 28 September 1959 after hearing the petitioners and also after hearing Madan Gopal Rungta who held a power of attorney on behalf of the said petitioners, the said Controller in purported exercise of his powers under Rule 6 of the Mining Lease Modification of Terms Rules, 1956 modified the lease under the aforesaid registered document of 11 July 1919 and made it terminable with effect from 20 September 1961. It is, stated on behalf of the appellant that this order of termination was made at the instance of Madan Gopal Rungta who pleaded that the lease should be made terminable after the expiry of the sub-lease granted in his applications for grant of mining leases in respect of Gore in the Official Gazette. On 10 September 1962 Madan Gopal Rungta and his son Tribeni Prasad Rungta both applied for grant of a mining lease of the area. Certain other parties had also applied for mining lease in the area prior to this stage. On 13 November 1962 a numberice was issued to Tribeni Prasad Rungta under Sec. 7 of the Bihar and Orissa Public. Demands Recovery Act demanding a sum of Rs. 66,317.93 by way of dead rent and royalties which are alleged to have accrued during the period when Madan Gopal Rungta was working the mines under the aforementioned sub-lease. On 1 April 1963 the appellant M s. Hindustan Steel Limited applied for the grant of mining lease for an area of 67.26 acres within the area. Some time in 1963 Tribeni Prasad Rungta made an application under Art. 226 of the Constitution of India challenging the certificate proceedings mentioned before and the High Court allowed the application and quashed the proceedings on 23 November 1964. On 22 July 1965 the Government of Bihar acting with the approval of the Central Government granted a numberember 1966 a lease was granted in favour of Bharat Marble Company. On 2 September 1968 one S. K. Jain purporting to act on behalf of the petitioners filed a writ petition in the High Court of Patna in which it was. prayed that the two leases in favour of the appellant and Bharat Marble Company should be quashed and can celled. Soon after this writ petition had been filed, in April 1970, one of the petitioners died. On 17 September 1971 the High Court granted a writ in favour of the petitioners before them and cancelled the two leases. M s. Hindustan Steel Limited have number companye on appeal against the judgment and order of the Patna High Court by which the two lease were cancelled. The petitioners trace their title to the lease granted by Kumar Amardeyal Singh in favour of Pran Kristo Chatterjee who in turn assigned his, right to the petitioners , predecessor-in- title. claim that their predecessor-in-title Vyomkesh Mukherjee had exercised his rights under the deed of assignment and had in fact raised iron ore until 1949 when he died. The petitioners claim have remained in possession of the lease-hold property when interest of the proprietor vested in the State of Bihar under Bihar Land Reforms Act, 1950 and they became the lessees in the State of Bihar on the same terms and companyditions as were companytained in the original lease of 1919. The order of the Control of Mining Leases is, according to the petitioners, companypletely illegal and null and void. The Government of Bihar, they companytend acted illegally in inducting the present appellant as lessee of property which forms a part of the original lease-hold property 1919. It was on this basis that the petitioners asked the High Court to quash the two leases granted by the Government of Bihar and also to protect them in their possession and enjoyment of the lease-hold property. The only defence that was put up by the State of Bihar before the High Court of Patna was that the petitioners before the Patna High Court had defaulted in the payment of rents and royalties with effect from the date of vesting present appellant, however, put up a strong defence on the following grounds - The original lease of 1919 did number give any mining rights to Kumar Amardeyal Singh so that he companyld number grant a valid mining lease in favour of Pran Kristo Chatterjee. In any event, even if the petitioners companyld trace any title from the original lease of 1919, after the Bihar Land Reforms Act of 1950 they became lessees under the State of Bihar and their lease has been terminated by the Controller of Mining Leases so that the State of Bihar was quite within its rights to execute the leases in favour of the present appellant and of Bharat Marble Company. In any event the appellant has been granted a mining lease by the Government of Bihar and is number admittedly in possession under that lease. Therefore, since the appellant is number in possession and has raised a serious question regarding the title of the petitioners, the appellant cannot be thrown out by an order obtained in a Writ petition. On these rival companytentions the four cardinal issues that arise for decision are Could Kumar Amardeyal Singh, the proprietor of Ladi Estate, grant a mining lease ? What was the effect of the Bihar Land Reforms Act, 1950 upon the right, and title, if any, of the petitioners ? Assuming that the petitioners became lessees under the State of Bihar by reason of the Bihar Land Reforms Act, companyld the Controller of Mining Leases terminate their lease What is the effect of the possession that has been enjoyed by the appellant since the grant of the mining lease on 22 July 1965. It will be more companyvenient if we dispose of issues Nos. 2 and 3 first. For companysidering the effect of the Bihar Land Reforms Act, 1950 on the petitioners title we shall proceed on the assumption that they were in enjoyment and possession of a valid mining lease which had been originally granted by Kumar Amardeyal Singh in 1919. Sec. 10 of the said Act which deals with subsisting leases of mines and minerals is in the following terms- Subsisting leases of mines and minerals.- 1 Notwithstanding anything companytained in this Act, where immediately before the date of vesting of the estate or tenure there is a subsisting lease of mines or minerals companyprised in the estate or tenure or any part thereof, the whole or that part of the estate or tenure companyprised in such lease shall, with effect from the date of vesting, be deemed to have. been leased by the State Government ,to the holder of the said subsisting lease for the remainder of the term of that lease, and such holder shall be en- titled to retain possession of the lease-hold property,. The terms and companyditions of the said lease by the State Government shall mutatis mutandis be the same as the terms and companyditions of the subsisting lease referred to in sub-section 1 , but with the additional companydition that, if in the opinion of the State Government the holder of the lease had number, before the date of the companymencement of this Act, done any prospecting or development work, the State Government shall be entitled at any time before the expiry of one year from the said date to determine the lease by giving three months numberice in writing Provided that numberhing in this sub-section shall be deemed to prevent any modifications being made in the terms and companyditions of the said lease in accordance with the provisions of any Central Act for the time being in force regulating the modification of existing mining leases. The holder of any such lease of mines and minerals as is referred to in sub-section 1 shall number be entitled to claim any damages from the outgoing proprietor or tenure- holder on the ground that the terms of the lease executed by such proprietor or tenure-holder in respect of the said mines and minerals have become incapable of fulfilment by the operation of this Act. As the lease in favour of the petitioners was subsisting on the date of vesting of the Ladi Estate, the lease, with effect from the date of vesting, became nationally a lease granted by the State Government to the petitioners for the remainder of the term of that lease and the petitioners became entitled to retain. possession of the lease-hold property. There can be numbermanner of doubt that the Bihar Land Reforms Act, 1950 companyld number have put an end to the title of the petitioners. The only effect of that Act was this, that instead of being lessees under Kumar Amardeyal Singh and his successors, the petitioners became lesses directly under Government on the same terms and companyditions on which the original lease had been granted to their predecessor in-interest by Kumar Amardeyal Singh. The statute itself is very clear on this point the position has, however, been reaffirmed by a decision of this Court in the Bihar Mines Ltd. v. Union of India. 1 The next issue that we have to deal with is as to the question whether the order dated 28 September 1959 of the Controller of Mining Leases modifying the petitioners lease under the registered document of 1919 and directing that the said lease would terminate on 20 September 1961 was valid and effective in putting an end to the lease in September, 1961. The appellant sought to rely on this order be-fore the High Court. But this also is a very lame stick on which the appellant relied. A Division Bench of the Patna High Court has held that the order of the Controller of Mining Leases was invalid and of numberlegal effect whatsoever. This finding has been companyfirmed by this Court in the Bihar Mines Ltd. v. Union of India where it has been held that it is number the effect of Sec. 10 of Bihar Land Reforms Act that a subsisting lease companytinues under the Government with the Government substituted as the lessor in place of the original lessor. It has further be-en held that Sec. 10 in effect creates a new statutory lease which companyes into existence on the date when the estate is vested in Government. AIR 1967 S.C. 887. We number companye to companysider issue No. 1 as to the companypetence of Kumar Amardeyal Singh to grant a mining lease. A companyy of the original registered document of 11 July 1919 IV which Kumar Amardeyal Singh is reported to have granted the mining lease in favour of Pran Kristo Chatterjee, has been annexed to the petition before the High Court. It is number anybodys case that the document of II July 1919 did number grant a lease of mineral rights to the said Pran Kristo Chatterjee. What is seriously challenged by the present appellant is the title of Kumar Amardeyal Singh to give such a grant. We shall deal with the items of evidence on which the petitioners rely to establish the title of Kumar Amardeyal Singh in his respect and also the objections of the appellant to those items. The first evidence on which the petitioners rely is a letter addressed by the Government of Bihar in November, 1967 to the Deputy Commissioner of Palamau and Daltonganj. The letter was on the subject of ten applications of different parties for grant of mining leases for limestone and dolomite in village Berma, P.O. Daltoganj in the District of Palamau. The State Government companymunicated an order to the Deputy Commissioner in the fallowing terms OrdersIn view of the judgment of the Supreme Court passed in Civil Appeal Nos. 172-174 of 1963 in Bihar Mines Ltd. v. Union of India and others, M s. Quamruddin and Sons are alone entitled to remain in possession of the area in question for the period mentioned in the lease deed granted in their favour by the ex-proprietor of Ladi Estate. The area applied for by the aforesaid applicants are, therefore, number available for settlement. The applications are accordingly rejected. By order of the Governor of Bihar Sd - C. P. Singh Deputy Secretary to Government. The argument made on behalf of the petitioners is, more or less on the following lines. As a result of a Supreme Court decision, Government recognised in 1968 the companypetence. of the exproprietor of Ladi Estate to grant mining leases. it was cause there was already an existing lease granted by the ex-proprietor of Ladi Estate in the area companycerned that Government ordered the Deputy Commissioner that the area was number available for settlement with the various applicants for mining lease mentioned in that letter. This, it is argued, is a clear recognition by the State of Bihar of the companypetence of Kumar Amardeyal Singh to grant, as proprietor of Ladi Estate, mineral leases to others. Incidentally, one of the applicants who was refused mining lease as a companysequence of that order, happens to be M s. Bharat Marble Company. Therefore, it is argued, neither the State number the appellant can number be allowed to resile from this position. The appellant meets this point by saying that the appellant who has been graned a lease by the Government of Bihar in July 1965 cannot be bound by an admission made by Government in November, 1967. No estoppel as against a lessee can arise from any admission made by the lessor after the lease has been granted. The petitioners next rely on i a companyy of Register D in respect of village Adar, P.O. Daltonganj appertain in to Touzi No. 130 as well as iii another companyy of Register of village Gore appertaining to Touzi No.-161 to establish that Kumar Amardeyal Singh was a proprietor and number merely a jagirdar. It is companytended on behalf of the petitioners that once the status of Kumar Amardeyal Singh as a proprietor is established there can be numberquestion that he must also have been the proprietor of the underground mineral rights. For the proposition that the right of property of zemindars or proprietors extends to sub-soil minerals of the land held by them, the petitioners rely on the authority of a decision of this Court in the Lodna Colliery Company 1920 Ltd. v. Bhola Nath Roy 1 in which Raghubar Dayal J. delivering the judgment of this Court made the following observation We are, therefore, of opinion that the right of property of the persons with whom resumed invalid Lakhraj land had been settled being the same as of the zemindars, extends to the sub-soil minerals of the land held by them. In the same case after referring to the preamble to Regulation II of 1973, Raghubar Dayal J. observed It is thus clear from the above declarations that the zemindars, the proprietors of estates, were recogNIsed to be the proprietors of the soil The right of the zemindars to the sub-soil minerals under their land follows from their being proprietors of the soil and has been recognised in a number of cases between the zemindars and persons holding land under a tenure from them. It is argued on behalf of the petitioners that the extracts from Register D prove that Kumar Amardeyal Singh was really a proprietor of Ladi Estate though he has been described in some documents as jagirdar. It is companytended on the authority of the Supreme Court decision just cited that all zemindars as proprie- AIR 1964 S.C. 918. tore of revenue-paying estates have rights over underground minerals and are entitled, therefore, to grant a lease in respect of those rights. The learned Solicitor-General appearing on behalf of the appellant companyntered this plea of the petitioners by sayin, that entries in Register D can never be companyclusive as to title. Our attention was drawn to Sec. 4 of the Land Registration Act, 1876 which though a Bengal Act 18 of 1876 is, the Act applicable to Bihar. Sec. 4 of that Act describes the various registers which the Collector, of every district has to prepare and maintain. Register D is described in that Section as an intermediate register of changes affecting entries in the general and mouzawar register. The Land Registration Act mentions- the purposes as well as the companytents of the four registers mentioned in Sec. 4. The intermediate register called Register D it appears, is kept for the purpose of recording all changes effected in the entries which stand in the other three registers, namely Register A of revenue-paying lands, Register B of revenue-free lands as well as the Mouzawar Register C of all lands, revenue-paying and revenue-free, so that by a reference to Register D companyrect upto-date information as to Registers A, B and C on all points recorded therein may be obtained at any time. The names and addresses of the proprietors of every estate which companyprises lands situate in a district are to be found in Register A. It is clear therefore that.Register D will ordinarily show changes in the names of proprietors which are to be posted in Register A as a result of mutation proceedings. Ordinarily, a proprietor will take good care to have his name registered under the Land Registration Act in the Collectoes registers for, otherwise, he cannot be entitled to claim rent from his tenants since, under Sec. 78 of the Land Registration Act numberone is bound to pay rent to any person claiming such rent as proprietor or manager of an estate unless his name is registered under the Act. All the same, even when a name is posted in. a register as proprietor as a result of a mutation proceeding the person whose name is posted cannot claim that lie automatically establishes his title as proprietor of the estate companycerned. In Nirman,Singh Ors. v. Lal-Rudra Partab Narain Ors. 11 the Judicial Committee of the Privy Council held that proceedings for the mutation of names are number judicial proceedings in which title to and proprietary rights in immovable property can be determined. The Privy Council further held that mutation proceedings are in the nature of fiscal enquiries instituted in the interest of the State for the purpose of ascertaining which of several claimants for the occupation of certain denomination of immovable pro- perty may be put into occupation of it with greater companyfidence that 1 53 T.A. 220. the revenue for it will be paid. The Privy Council clearly held that revenue authorities have numberjurisdiction to pronounce upon the validity of claims of title so that orders in mutation proceedings cannot be treated as companyclusive evidence of proprietary title. The learned Solicitor-General relied also on a decision of this Court in Sri Marudeswarar Temple v. Dhanalakshmi Ammal and Ors. 1 where this Court held that a certified companyy of the revenue extract showing a land as entered in the name of a particular temple is number companyclusive of the right of the temple to the land, for a revenue, record merely shows that the Government regards the person in whose name the land is entered as responsible for payment of revenue. Such an entry may, prima-facie, be good evidence of possession and even of the right to hold the land, but in law it is number companyclusive. On the strength of these authorities the learned Solicitor General companytended that the entries in the Register D on which the petitioners rely cannot be taken as companyclusive evidence as to the title of Kumar Amardeyal Singh. In our opinion, there is companysiderable substance in this companytention of the learned Solicitor General. It is true that the extracts from Register D are strong prima-facie evidence in support of the petitioners claim that Kumar Amardeyal Singh was a proprietor of Ladi Estate but it is number possible to treat this evidence as companyclusive on the point. We number companye to the last issue as to the effect of the posse ssion enjoyed by the appellant since the grant of the mining lease to the appellant by the Government of Bihar on 22 July 1965. As for the fact of possession by the appellant of the area companyered by the mining lease it appears that the petitioners have admitted that fact before this Court in companynection with the appellants application for stay of the order dated 17 September 1971 of the Patna High Court. In its petition before this Court the appellant in paragraph 5 and 6 states as follows That after the termination of the alleged lease in favour of Respondents Nos. 1, 2 and 3 w.e.f. September 19, 1961 the State Government numberified the area under Rule 58 of the Mineral Concession Rules, 1960 to make a fresh grant. Notification was published in Official Gazette on 11-12-1961. The appellant in response to the said numberification applied for the area. Mr. M. G. Rungta and Mr. P. Rungta, father and son also applied separately for the area. The mining lease for the area was finally granted by the Government of Bihar to the appellant by order dated 22-7-1965 under the Civil Appeal No. 236 of 1961 Judgment delivered on 10 January, 1963. Mineral Concession Rule, 1960 and the mining lease was executed in favour of the appellant on 17-10-1966. After having got the possession of the area, the appellant companymenced preliminary mining operations in the area. The appellant has so far invested over Rs. 1,50,000 on machinery and equipment, etc. The iron ore magnetite extracted from the mines are being directly used by the appellant itself in its companyl washeries for beneficiation of the companyl for use in steel plants. In reply to these averments of the appellant, the petitioners have more or less admitted the appellants claim of possession. In paragraphs 4 and 5 of the affidavit filed, on their behalf in reply to the appellants petition, the petitioners merely say i that the. allegations companytained in paragraphs 5 and 6 of the appellants. petition are matters of record and ii that they do number admit the allegations and put the appellant to strict proof thereof. In paragraph 7 of the same affidavit, however,, the petitioners make a positive statement in the following language- I say that as far as I am aware the petitioner has only companymenced the prospecting operations in the same area and has number companymenced any real mining operation. In other words, the petitioners admit that the appellant has already been carrying on prospecting operations in the disputed area which is impossible unless the appellant has been in possession of the land. It is also significant that in their writ application before the High Court the petitioners have asked for a rule nisi calling upon the appellant to show why, if the circumstances so require, the petitioners be number restored into possession of the disputed lands. It seems clear to us that the appellant had actually been put into possession of the land in respect of which Bihar Government gave the appellant a mining lease and also that the appellant has been carrying on mining opinions in that area. According to the appellant the fact that it is in possession of the disputed land should be a strong reason for number throwing the appellant out of possession of the disputed land in a summary proceeding like a Writ petition. It was argued that since the appellant has raised a serious question as to the validity of the petitioners title and since it has proved its present possession of the disputed lands, the appellant should number be disturbed without adjudication of the question of title in a proper action. The learned Solicitor-General relied strongly on the decision of this Court in Sohan Lal v, the Union of India . In that case where a serious dispute on questions of fact between the parties was raised and particular the question.- 1 1957 S.C.R. 738. arose as to whether one of the parties had acquired any title to the .property in dispute, this Court held that proceedings by way of ,a writ were number appropriate in a case where the decision of the ,Court would amount to a decree declaring a partys title and ordering restoration of possession. This Court further held that the proper remedy in such a case is by way of a title suit in a civil companyrt and the alternative remedy of obtaining relief by a writ of mandamus or an order in the nature of mandamus companyld only be bad if the facts were number in dispute and the title of the property in dispute was clear. The petitioners sought to rely on the case of Mohd. Hanif State of Assam ,. in support of their proposition that since they have adduced sufficient evidence to show at least prima-facie title in respect of the disputed lands they are entitled to be protected from ouster from their lands by an executive action on the part of the State Government. In the case of Mohd. Hanif 1 the Government of Assam sought to resume certain lands which had been ,originally settled by the British Crown with, one Capt. S. Manley who had sold his right and title in the land to the predecessor in-interest of Mohd. Hanif. Mohd. Hanif filed an application in the Assam High Court under Art. 226 of the Constitution of India. The High Court dismissed Mohd. Hanifs petition on the ground that his petition raised disputed questions of title and that he should therefore be relegated to a suit in the civil companyrt. Mohd. Hanif appealed against the decision of the High Court. to his Court which allowed the appeal and held that the object of a proceeding under Art. 226 is to ensure that the law of the land is implicitly obeyed and that various authorities and tribunals act within the limits of their respective jurisdiction. This Court further held that though ordinarily in a proceeding under Art. 226 of the Constitution the High Court is number companycerned with the mere determination of the private rights of the parties, the Article provides a remedy against the violation of the rights of the citizens against the State or the statutory authority. The case of Mohd. Hanif 1 is, in our opinion, easily distinguishable from the instant case. That was clearly a case of exeexecutive interference with the possession of the petitioner Mohd. Hanif. Here, however, the petitioners do number have possession of the mineral rights for the protection of which they invoked the High Court for assistance in their writ petition. If the petitioners have to be given any relief in the instant case, it would be necessary to disturb the existing possession of the appellant. No support for ,such an order can be found in the decision in Mohd. Hanifs case. 1 1969 2 S.C.C. 782. Having regard to the view that we have taken of this case we cannot uphold the decision of the Patna High Court. We numberice that the Patna High Court in more than one place in its judgment has used the expression Prima-facie in describing the state of affairs in companynection with the right of Kumar Amardeyal Singh to grant a lease in respect of mineral rights. Apparently, the High Court felt that on the materials before it, it companyld number companye to the companyclusion that the title of the petitioners had been established companyclusively. The main foundation of the petitioners title was the mining lease given by Kumar Amardeyal Singh in 1919. The party who is number in possession of the disputed lands has thrown doubt about the companypetence of the Kumar Amardeyal Singh to grant such a lease. The petitioners have failed to produce any clear, companyclusive and unimpeachable documentary evidence in support of their companytention that Kumar Amardeyal Singh was proprietor who companyld have granted such a lease. That is why the High Court did number companye to a definite companyclusion regarding the title of the petitioners and remained companytent by saying that the petitioners had shown prima-facie title. These are number circumstances in which,, in our opinion, the petitioners can be put into possession by the High Court by displacing the appellant. In our opinion, therefore, the appellant should succeed in this appeal. Accordingly, we set aside the judgment and order dated 17 September 1971 of the Patna High Court and allow the appeal. In the peculiar facts and circumstances of this case we direct that the parties should bear their own respective companyts Before parting with the case, however, we ought to make it clear that this judgment is number to be taken as a determination of the question of title of the petitioners. We cannot disregard the fact that ever since the grant of the mining lease by Kumar Amardeyal Singh in 1919 the petitioners and their predecessor-in-interesthave actually enjoyed the title-. Thy even gave a sub-lease to Madan Gopal Rungta so that until a new lease was granted by the Government in favour of the appellant the petitioners were in possession of the disputed lands either directly or companystructively through Madan Gopal Rungta. It is quite likely that when the Bihar Land Reforms Act came and the Controller of Mining leases passed an order cutting short the duration of the lease of the petitioners, the petitioners were number so alert as to asserting their rights against the Government of Bihar who found the field clear to give a fresh lease in favour of the appellant.	Case appeal was accepted by the Supreme Court
ORIGINAL JURISDICTION Writ Petition No. 646 of 1970. Under Article 32 of the Constitution of India for the enforcement of fundamental rights. Banerjee and P. K. Ghosh, for the petitioner. S. Dharmadhikari and I. N. Shroff, for respondent No. 1. Naunit Lal, for Advocate-General, Assam Intervener . Santosh Chatterjee and G. S. Chatterjee, for Advocate- General, Orissa Intervener . P. Rana, for Advocate-General, U.P. Intervener . V. Rangam and A. Subhashi, for Advocate-General, Tamil Nadu Intervener . The Judgment of the Court was delivered by Sikri, C.J. This petition was heard along with Civil Appeals Nos. 2139-2140 of 1968. The facts are different but the principles of law to be applied are the same which we have laid down in our judgment in Civil Appeal No. 2139 of 1968. The facts in this petition are that the Land Acquisition Act, 1894 was amended by the Land Acquisition Madhya Pradesh Amendment Act 1959 Madhya Pradesh Act V of 1959 hereinafter referred to as the impugned Act. By section 3 of the impugned Act the Land Acquisition Act, 1894, in its application to Bhopal area, was amended as follows After clause g of Sec. 3 of it he Act of 1894 a new clause was added defining Bhopal area. A new section S. 17A, was inserted in the Land Acquisition Act, 1894, giving to the Government the power to issue a direction to the Collector that it is urgently necessary to acquire immediate possession of any building site situated in Bhopal area, and providing that upon the issue of such a direction the provisions of Sec. 17 would in all respects apply in the case of such site as they apply in the case of waste or arable land. A new proviso was added to the first clause of Sec. 23 1 . The proviso runs thus Provided that when the market-value of any land situate in Bhopal area, in respect of which the date of publication of the numberification aforesaid is after the companymencement of the Land Acquisition Madhya Pradesh Amendment Act, 1957 21 of 1958 , is in excess of its market-value as on the 1st day of October, 1955, the market-value thereof shall be deemed to be its market-value as on the 1st day of October, 1955. 4.-A new sub-section 3 was inserted in S. 23 enjoining the Court to award a further sum number exceeding twenty five per cent of the market-value of the land acquired and an additional sum provided under sub-sec. 2 , as the Court may think fit, in companysideration of the appreciation in the price of the land companycerned by reason of the location of the capital at Bhopal, regard being had to the situation of such land. The numberification to acquire the land in question under s. 4 1 of the Land Acquisition Act, 1894, was published in the Madhya Pradesh Rajpatra, dated October 3, 1962. Notification under s. 6 1 of the said Act was published in the Madhya Pradesh Rajpatra datead November 23, 1962. Thereafter, the numberice under S. 9 1 was published for general information and numberices under s. 9 3 were issued to the individual interested parties. Ultimately, the Land Acquisition Officer gave his award in the Land Acquisition Case No. 51/LA/62 on March 25, 1969. The award was given on the basis of market value of the land as on October 1, 1955 plus 25 extra companypensation, and number on the basis of the market value of the land on or about the date of acquisition, by virtue of the provisions of S. 3 of the Land Acquisition M.P. Amendment Act, 1959. It is alleged inter alia that Bhopal was made Capital of Madhya Pradesh on November 1, 1956. We were referred to the report of the States Reorganisation Commission, 1956. The new State, which can appropriately be described as Madhya Pradesh will be a companypact unit. It will bring almost the whole of Bundalkhand and Baghelkhand under one administration. Jabalpur will be situated at a central place in this unit and has or will soon have some important facilities like water supply and availability of electrical power. It will, in our opinion, be a suitable capital. This report was submitted on September 30, 955. It is quite clear from this para that on the date of the report the proposed capital was Jabalpur and there companyld thus be numberspeculation in land in Bhopal before the announcement of Bhopal as capital. In view of these facts, it is submitted in ground viii of the petition that the impugned Act violates Art. 14 of the Constitution as there is numberrational classification on the basis of which the prices of Bhopal area have number been determined by the principle by which the market prices of other places would be determined. It is further submitted that there can be numberrational basis to differentiate between Bhopal and other areas for award of companypensation merely because Bhopal was made Capital. The theory that in view of Capital, there was speculative prices at Bhopal and the prices at any given time might number reflect the real price, is neither rational number reasonable. It is also alleged that the date, October 1, 1955, is an arbitrary date for the purpose of fixing the market value. The only reply given to this ground is companytained in para 21 of the companynter affidavit on behalf of the State wherein it is stated With reference to ground viii , of the petition, I deny- that the Amendment Act infringes any- fundamental right of the petitioner and in particular Article 14 of of the Constitution. The learned Advocate General was unable to point out to us any material to show that there was any expectation or speculation on or about the 1st October, 1955 that Bhopal would be the Capital of Madhya Pradesh. If this fact had been established, it may have been reasonable to have fixed the date for the purpose of determining the market value as 1st October 1955. But this does number mean that for all time to companye for any land acquired by the State for a capital, the date of announcement of the Capital would be the relevant date. In this case, the acquisition was in 1962 and prices may have risen number only because of speculative dealings but because of general increase in prices throughout the State. In Satish Kumar v. State of M.P. 1 the Madhya Pradesh High Court upheld the validity of the impugned Act. The High Court justified the basis to differentiate the land located in Bhopal area thus In support of this difference, it has been averred in the return filed by the, State that in the reorganisation of the States, which was a political exigency, the fixation of the Capital at Bhopal was an accident number due to any economic or industrial reasons that when it was decided to locate the Capital of the State in the underdeveloped town, there was heavy speculation in land prices and that, therefore, these artificially inflated prices companyld number be taken as a proper basis for fixing the real market-value of the property. The amendments themselves indicate that it was because of the location of the Capital at Bhopal that they had to be made. Now, it cannot be denied that whenever a capital or a big industry is located in a town or even in a city, land values are suddenly pushed up G by prospective sellers and the increase in them during the interregnum between the date when it is known that the town will become more important and the date of acquisition of land may number represent its real value. The prospect of acquisition of vast areas of private lands in companynection, with a capital or industrial project in town always gives rise to speculative dealings in lands in the town. When such speculative dealings A.I.R. 1961 M.P. 280. occur it is number unreasonable and improper to companypute the market-value of the land with reference to a date proximate to the date of acquisition so as to exclude, speculative rise in determining the market value of the land. On the material on record, it is impossible for us to hold that in this case there has been a discrimination in the matter of companypensation between land acquired in Bhopal area and other areas in the State. The classification between land in Bhopal area and other parts of the State is with reason and reasonable, and is for the purpose of enabling the State to acquire land at a reasonable price in Bhopal for the companystruction of the Capital. In our view, the amendments are number hit by Article 14 of the Constitution. With respect, the High Court has number examined the question of the validity of the reason for fixing the relevant date as October 1, 1955. There is numbermaterial on the record to show that on October 1, 1955, it was known that Bhopal may be the Capital of the State or that there was speculation in land because of this fact. We have in the judgment delivered in Nagpur movement Trust Vithal Rao 1 examined Art. 14 and its implications as far as land acquisition is companycerned.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No, 69 of 1969. Appeal by Special Leave from the judgment and order dated January 24, 1969 of the Madhya Pradesh High Court in Criminal Appeal No. 942 of 1968. S. R. Chari, R. Nagaratnam, S. K. Mehta, K. L. Mehta and K. R. Nagaraja, for the appellant. N. Shroff and M. N. Shroff for the respondent. The Judgment of the Court was delivered by Jaganmohan Reddy, J.The appellant who was Professor and Head of the Department of Pharmacology and Therapeutics in the Medical College, Jabalpur, has been companyvicted by the Special Judge, Jabalpur under s. 5 1 d read with s. 5 2 of the Prevention of Corruption Act to one years rigorous imprisonments and a fine of Rs. 1 000 and in default to undergo rigorous imprisonment for three months. He was further companyvicted of offence 13-L736Sup CI/72 under ss. 409 and 420 I.P.C. and was awarded sentences of six months rigorous imprisonment in respect of each of them. All the sentences were directed to run companycurrently. An appeal against this companyviction and sentence to the High Court of Madhya Pradesh was dismissed. This appeal is by special leave. Shortly stated the case of the prosecution is that the appellant who was employed in the Medical College, Jabalpur, with the permission of the Government of Madhya Pradesh given on December 20, 1962, accepted a grant-in-aid for carrying out a research project entitled Study of Manganese in Health and Disease by Neutron Activation Analysis. This Research Project was to be carried on in companylaboration with the Atomic Energy Commission of the Government of India for three years 1963-64, 1964-65 and 1965-66. The appellant began his research work in July 1963 and sometime thereafter on September 30, 1964, an instrument for distillation of water known as the Stadler Still Double Distillation Apparatus was purchased from Messrs S. K. Biswas Company of Calcutta a firm of scientific instruments manufacturers and dealers of Calcutta, for Rs. 450. On April 11, 1964, the Indian Council of Medical Research known as the 1.C.M.R. entrusted him with the research project on Effect of Hypoxia and Decompression on Body Temperature as function of Adaptation to Hypoxia at various altitude. The terms and companyditions of grant-in-aid were mentioned in the circular letter Ext. P-32 dated April 11, 1964, and were current for the years 1965-66 and, 1966-67. For this project the appellant wanted to purchase another double distillation apparatus and after inquiry from several firms placed an order with Messrs Goverdhandas Desai Private Ltd. Bombay hereinafter called Messrs Goverdhandas as per Ext. P-5 dated February 20, 1965 for a double distillation appara- tus, horizontal type, Double Stage, capacity 10 litres, pyrex glass for Rs. 890 and asked them to inform him of their acceptance telegraphically and send triplicate bills in advance. Messrs Goverdhandas sent wire Ext. P-6 and the advance bills Exts. P-8, P-9, and P-10 to the appellant on March 3, 1965. This apparatus was entered in the stock register of the 1.C.M.R. Hypoxia Enquiry as per Ext. P-44 in accordance with the details shown in the bills and the triplicate bills for Rs. 969.10 inclusive of sales-tax and packing and freight charges were presented for payment. It may be mentioned at this stage that the appellant was on leave from February 9, 1965 to March 20, 1965 because of heart trouble and the inquiry and the order were placed during that period. A draft in favour of Messrs Goverdhandas was subsequently issued by the Accounts Officer, 1.C.M.R. and was received by the appellant on April 12, 1965. On the same day the appellant wrote a letter Ext. P-16 to Messrs Goverdhandas saying that he did number want the appar atus as shown in the sketch sent by them but wanted it according to the original order placed by him. He therefore. requested them to expedite the order urgently as he had, received the payment against the bills and was withholding the same for want of apparatus. As the firm was number able to supply the apparatus as per the specifications the order was cancelled by letter Ext. P-17 dated April 24, 1965. Thereafter the appellant was in Bombay between May 15, 1965 and May 25, 1965 where he had zone for a medical check-up and was staying in the M.L.As. Rest House. On May 17, 1965, he met Mr. Patel a Director of Messrs Goverdhandas and asked him into receive the draft and give him a cheque in order to enable him to purchase the apparatus he wanted from the Bombay market. This was agreed to, and accordingly the draft was handed over to Mr. Patel and a receipt Ext. P-24 was obtained from him on behalf of Messrs Goverdhandas. At the same time the appellant also passed a receipt for the bearer cheque which he received from Mr. Patel for the same amount. On the same day the appellant telephoned to one Rasiklal Shah a partner of the Scientific Sales Syndicate D.W. 3 and enquired whether he companyld supply the distillation plant as per the specifications given by him. D.W. 3 said he did number have it. Later, however, one Dsouza a broker who was sitting with D.W. 3 at the time informed him that he companyld supply the instrument wanted by the appellant. D.W. 3 says he tried to ring the appellant back but companyld number get any reply so he sent Dsouza with the apparatus along with the introductory letter companyies of which are Ext. P-70 and D- 1 According to the appellant on the same day the man sent by Rasiklal Shah is said to have brought the apparatus the companyt of which was Rs. 989.35. The appellant paid the money, obtained a receipt and brought it to Jabalpur. The crucial question in this case is whether the accused as alleged by the prosecution did number buy another apparatus for which he had received a draft from the I.C.R. But in fact has been carrying on the work with the distillation apparatus purchased from Messrs S. K. Biswas Company in September 1964, for the project for which he was receiving a grant-in-aid from the Atomic Energy Commission of the Government of India, by pretending that it is the apparatus which he had purchased in Bombay. By this device it is said the appellant has misappropriated the amount of the draft sent by the 1.C.M.R. There are in this case certain undisputed facts which are- That a double distillation apparatus was purchased for the project of the Atomic Energy Commission from Messrs S. Biswas Company on September 30, 1964, and in respect of which entries were made in the stock register of the Atomic Energy Commission. That the order for the purchase of the second double stage distillation plant was placed with Messrs Goverdhandas which was accepted by them on March 3, 1965. This firm had along with the acceptance sent a packing numbere and bills in triplicate on the strength of which a claim was made to the C.M.R. which issued a demand draft in favour of Messrs Goverdhandas. The demand draft was received by the appellant on April 12, 1965. Chokasey P.W. 21 made entries in the stock register of the 1.C.M.R. that the apparatus was received as soon as the Us were received and submitted for payment. The appellant on the same day, i.e. April 12, 1965 as indicated in Ext. P-16 had informed Messrs Goverdhandas that the sketch sent by them wag number in accordance with the original order and while informing them that he had received payment against the bills asked them urgently to inform whether they companyld supply the apparatus as per the specifications. That inasmuch as Messrs Goverdhandas companyld number supply the apparatus as per the specifications the order was cancelled on April 24, 1965 by letter Ext. P-17. That the appellant went to Bombay on May 17, 1965 and handed over the demand draft issued by the I.C.M.R. in favour of Messrs Goverdhandas to Mr. Patel and obtained a receipt from him. The appellant also obtained from Messrs Goverdhandas a bearer cheque for the same amount for which he gave a receipt to Mr. Patel and cashed the cheque. It appears from the first information report Ext. P-46 dated August 12, 1966, that during the companyrse of investigation on information received through a source Shri Shyam Biharilal Shrivastava, Deputy Superintendent of the Special Police Establishment, Jabalpur, came to know that the appellant the Head of the Pharmacology Department in charge of the Research Laboratory had placed an order on February 20 1965 for purchasing a distillation apparatus, horizontal type, double stage, capacity 10 litres pyrex valued at Rs. 969-10 from Messrs Goverdhandas in companynection with research of Hypoxia Enquiry entrusted to him by the C.M.R., New Delhi, and he had, written to the said firm to send bill in advance. On receiving three companyies of the bill from the firm, it was shown in the stock register that the said distillation apparatus was received when in fact numbersuch type of apparatus was at all purchased from the said firm. He then sent two companyies of the said bill to the C.M.R.New Delhi and acquired a demand draft for Rs. 969-10 from it. What the prosecution has number disclosed either in the F.I.R. or in the chargesheet filed against the appellant is that the appellant during the companyrse of the investigation had stated that he had in fact purchased the double stage distillation plant in Bombay on May 17,1965 from out of the account of the bearer cheque received from Messrs Goverdhandas in exchange for the demand, draft handed over to their Mr. Patel. Nor did the prosecution mention either the fact that the appellant had obtained a receipt from Messrs Goverdhandas for the demand draft handed over to them or that he had given a receipt for the bearer cheque obtained in exchange by him from Messrs Goverdhandas. There was also numbermention in the said document that the appellant had handed over a companyy of the receipt for payment of Rs. 989-35 for the purchase of the other apparatus on May 17, 1965, to the investigating officer and had informed him that Rasiklal Shah had sent some one with the apparatus along with the introductory letter dated May 17, 1965. It is number as if the investigating officer had number verified the information given by the appellant that Rasiklal Shah had given such a letter, because a companyy of that letter was seized from the Scientific Sales Syndicate, even before the I.R. was issued and the charge-sheet was filed. It was only after the accused had made an application during the trial on September 16, 1968, for summoning Rasiklal Shah and requesting the Court to call for the companyy of the letter seized by R. N. Dube, Deputy Superintendent of Police, from Rasiklal Shah under a seizure memo, that the companyy was produced by the prosecution. The accused in his statement under s. 342 of the Code of Criminal Procedure produced another companyy of this letter as well as the bill with the original receipt a companyy of which had been handed over to the investigating officer even before the F.I.R. was issued. Once these facts had companye to the knowledge of the investigating officer, it was his duty to have placed them before the Court. In the absence of such a disclosure it is companytended by the learned advocate for the appellant that for the prosecution to bring home the offence to the appellant beyond a reasonable doubt, it should also establish that the appellant did number in fact purchase the apparatus and that the said documents were spurious and got up for the purpose of the defence. The burden of establishing this, it is averred, is also upon the prosecution and number upon the defence because unless the probability of the appellant having purchased the apparatus is eliminated, the case against the appellant cannot be said to be established beyond a reasonable doubt. It may, however, be pointed out that in determining this question the Special Judge as well as the High Court seem to have laid greater emphasis on the fact that the accused had number proved that he had purchased the apparatus as companytended by him. While numberdoubt the question whether the accused purchased the apparatus in Bombay with the money he got under the draft issued by the I.C.M.R. in favour of Messrs Goverdhandas may have to be established by the accused, he can take full advantage of the circumstances in the prosecution case itself to probabilise his plea that he did. The High Court posed the question for determiation as follows Thus, the short, question that fell for determination by the Special Judge was whether the amount received back by the appellant from Messrs Goverdhandas Desai of Bombay was utilised or number by him in purchasing the apparatus as stated by him and sought to be proved by him, burden of which fact was on him, through his defence witnesses. This approach both of the Special Judge as well as the High Court is number altogether companyrect one. In our view, the onus of proving all the ingredients of an offence is always upon the prosecution and at numberstage does it shift to the accused. It is numberpart of the prosecution duty to somehow hook the crook. Even in cases where the defence of the accused does number appear to be credible or is Palpably false that burden does number become any the less. It is only when this burden is discharged that it will be for the accused to explain or companytrovert the essential elements in the prosecution case which would negative it. It is number however for the accused even at the initial stage to prove something which has to be eliminated by the prosecution to establish the ingredients of the offence with which he is charged, and even if the onus shifts upon the accused and the accused has to establish his plea, the standard of proof is number the same as that which rests. upon the prosecution. Where the onus shifts to the accused, and the evidence on his behalf probabilises the plea he will be entitled to the benefit of reasonable doubt. In this case the prosecution seeks to establish the case against the appellant by showing- 1 that there is numberfirm by the name of M.B. Corporation from which the appellant is said to have purchased the apparatus on May 17, 1965 and 2 that the distillation apparatus which was first purchased in September 1964 is the same as Article A which the Special Police had seized and number that which the appellant alleges he had purchased and 3 that the apparatus purchased in September 1964 which had been shown as broken on February 1, 1965 and written off has been in fact number broken but has been entered as such in the registers fraudulently. The evidence on behalf of the prosecution can be classified under three main heads Firstly with regard to the entry in the stock register that the double distillation apparatus purchased in separate 1964 was broken and written off Second that the distillation apparatus purchased in May 1965 was the one which was being used in the Laboratory by the appellant and is the same as Article A which was seized by the Special Police and Thirdly, that there was numberfirm by the name of M.B. CorPo- ration from which the accused is alleged to have purchased the subsequent distillation plant on May 17, 1965, and that he did number in reality purchase it. The first allegation is sought to be established by Kamlesh Grover P.W. 22, who was working on the post of Research Assistant In the Pathology Department of the Medical College, Jabalpur from October 1, 1964 to September 30, 1965. The witness was posted from October 1, 1965 as a Senior Scientific Assistant in the research of the Atomic Energy Commission and from December 15, 1965 in the HyPoxia Enquiry and was working under the appellant. According to her, although it was number part of her duties, she was required to do clerical work as there were numberother persons and that as the appellant told her that some articles had been broken and the persons who were working previously had number made entries she should make the same as she was a Research Assistant. Because of this, she made the entry and as far as she companyld remember it, that entry was made on September 19, 1966. Till this stage she made numberassertion that she was asked to do something which to her knowledge was false. The learned Advocate for the prosecution however put her a question which we think is in the nature of a cross-examination designed to support the allegation that she did number make the entry willingly. This was Question-Whether Dr. Goswami asked you to sign thereon or number ? Answer-Dr. Goswami asked me to sign thereon, but I refused to sign. Even then she said that the appellant asked her to get a companyy made thereon because the breakage register was for be sent and accordingly she made the entry which was in her handwriting and she signed thereon. It was then that she said that. the appellant had asked her to put the same date in her signature, on which he told her that the apparatus was broken. She identified the appellants initials and asserts that she prepared the breakage register on September 19, 1966. This evidence does number establish that the distillation apparatus was number in fact broken. However, in cross-examination she was asked whether she saw, the distillation apparatus, before she was deputed to the. Hypoxia Enquiry and her answer, was that she does number remember and then said Wait for a minute, and after trying to recollect her memory she answered that she saw the apparatus. But she does number know whether there was any monogram on that apparatus and claims that she can identify if two or three apparatuses of the same type are kept because of their being old or new. Again she says if two or three apparatuses are kept, it will be difficult to identify. When asked whether she kept a numbere of it anywhere in respect of the breakage or was speaking from memory, she said that she had number kept a numbere thereof any-. where but remembered it because the appellant had returned from foreign tour at that time, and had joined on Monday September 11, 1966. She said that Shri Dube, Deputy Superintendent of Police made enquiry from her in March 1967, which she stated was on the basis of the numbere in her diary Ext. D-9 that on September 19, 1966 the appellant called her in his room and asked her to prepare accounts of the articles of the Atomic Energy Come mission. She had told Dube, Deputy Superintendent of Police, about the numbere- book. This was in direct companytradiction of her previous denial that she had kept a numbere of it. Her evidence in respect of this numbere-book was number accepted by both the Trial Court as well as the High Court. It would appear that she having entered in the register that the apparatus was broken and written off is really anxious to exculpate herself because she was probably made to believe that it was in fact number broken and she was made to do something which was untrue. This anxiety dominates her evidence which read as a whole does number inspire companyfidence and gives the impression that she was trying to put a sinister interpretation of what may appear to have been probably true. For instance, she says that she realised that she had to make an entry of the article as broken and thought over it very much. After that she started to numbere down in her numbere book and told this fact to some other men in the Department in the general talk. She informed Mr. Rao, Dr. Goswami and Dr. Harshwardhan who were sitting there. Though she first admits that she did number tell them that the appellant had got an entry made by her in the stock register and got breakage register prepared by her, she later says that she told them that distillation plant was shown as broken. It was then that the appellant called her in the office and said that breakage register was to be prepared and sent to the Atomic Energy Commission and asked her to prepare the register and make entry in the stock register. None of the witnesses named by her however say anything about her having informed them. That the distillation apparatus purchased in September 1964 was the same as Article A has been spoken to by several witnesses with which we will presently deal. But before we do so, it is necessary to numberice that according to Nirodh Ranjan Ghosb P.W. 13, Manager of Messrs S. K. Biswas Company a similar apparatus as the one supplied by them to the appellant companyld be purchased also in Bombay, so that the probability of the accused having purchased a similar apparatus with the markings of Messrs S. K. Biswas Company in Bombay cannot be ruled out. This witness, however, does number say that Article A is the same as the one which his firm had supplied. It may be mentioned that Mr. Dube who was investigating the offence against the accused had written a letter to Messrs. S. K. Biswas Company on December 30, 1966, enquiring whether the type of the stadler still supplied by them was available in the Bombay market, whether they were supplied to M s M. B. Corporation, Nagar Niwas C. Tank Road, Bombay-47 for sale and whether some body from their firm companyld identify the apparatus supplied to the Jabalpur Medical College. In answer to these queries Messrs. Biswas Company wrote to Dube that they had number supplied the type of stadler still to Messrs. M. B. Corporation which however may be available in the Bombay market and that it was number possible to identify the apparatus supplied to the Jabalpur Medical College. Even the High Court, after companysidering the evidence of Dr. Rajkumar Gupta, P.W. 15, working as a Demonstrator in the Medical College, under the appellant since the year 1958, Shri A. S. Venkat Subbarao P.W. 16 working as Assistant Professor in the Department of Pharmacology Medical College, during the relevant period, and Dr. Harshwardhan P.W. 19 working as Demonstrator in the Department of Pharmacology during the relevant time observed that all these witnesses have admitted that they are unable- to identify the double distillation apparatus from another apparatus of the same quality and same markings. There is also the evidence of other witnesses, namely, B. P. Namdeo P.W. 20 a research scholar, M. L. Chokasey, P.W. 21 a Laboratory Assistant in the Research Scheme a Lower Division Clerk, Jamund Prasad Khare P.W. 23 a Laboratory Assistant, and Rashid Khan P.W. 24 a Laboratory Assistant who said that they were working during the relevant period in the research work entrusted to the appellant by the Atomic Energy Commission of the Government of India and the I.C.M.R. These witnesses deposed about having seen Article A in the Laboratory, first in the Laboratory opposite to the appellants room,, though one of them Chokasey P.W. 21 said that be saw it in the verandah, which was later shifted into another room. Chokasey says he did number disclose to any body and only did so when he re- ceived the summons and gave his evidence. If so, how did the police came to know is difficult to understand. Though we do number pay much attention to this incongruity, we are referring to it because the High, Court while dealing with the evidence of D. W. 2 rejected it merely on the ground as will be seen when we discuss that evidence and at the same time accepted the eviddence of this witness, That this witness. had a grouse against appellant because he had asked for a certificate of character which the appellant is said to have given to him but says thereafter it was snatched from him and the appellant called for his explanation. It was suggested to him he was making a false statement that a character certificate was given to him by the appellant. This suggestion appears to be justified is evident from his admission. He also admits that the appellant had written a letter to Dr. Relen when he was working with him, which was shown to him by Dr. Relen. That letter is from the Superintendent, Medical College, asking for Chokaseys explanation. It says Your former employer in the I.C.M.R. Scheme who is the Professor of Pharmacology as well reports that you had been indulging in derogatory activities against him in the sense that you were typing the application on behalf of Shri J.P. Khare while in this office and from the typewriter of this office. Please let me know why you should number be strictly warned. Your explanation should reach to this office within 24 hours from the date of receipt of this memo. Jamuna Prasad Khare P.W. 23 was working in the Department from august 5, 1964 to October 30, 1965, but the work started only three or four months thereafter that is from November or December. He says that the distillation apparatus received from Messrs. Biswas Company was there upto May-June 1965. This witness on his own admission was dismissed by the appellant and was given service by the Dean of the Medical College. The appellant had made a companyplaint against him to the Director of Medical Services and was unemployed when Dube made enquiry of him. about the double distillation apparatus. Even though he wrote to the C.M.R. about the termination of his services he admitted that he did number write anything therein regarding this double distillation apparatus. The other witnesses also are number in a position to identify the apparatus as the one which was purchased in September 1964. In our view, when as clearly admitted by the senior members of the staff working in the Laboratory for quite some time that they companyld number identify that Article A was the same as that purchased in September 1964, it is difficult to believe that there two witnesses or any other witnesses companyld have done so, particularly when the High Court itself held that it was number possible on the evidence of the three witnesses to which we have referred that the apparatus companyld be identified, as the one purchased in September 1964. On the other hand there is the evidence of A. S. Venkatsubbarao P-W. l6 which clearly indicates that there was another double distillation apparatus apart from Article A, the one, purchased in, September 1964. In the examination-in-chief itself, the witness says that from 1964 till the apparatus was packed during the period one more double distillation apparatus wad received in the Department to the best of- his knowledge for Me apparatus was in use few days till it was packed and taken away. The apparatus was packed, when it was seized and that it is Article. This admission number only negatives the prosecution case that numberapparatus was purchased in May 1965 as alleged by the appellant, but definitely probabilises it. That apart, there is another circumstance which goes to support the statement of P.W. 16 that there was another double distillation apparatus which is number the same as the one purchased in September 1964 and which companyld, be Article A. It is seen that the apparatus which was purchased in September 1964 though it was said to be a double distillation apparatus it companyt only Rs. 486-62 but a similar distillation apparatus said to have been purchased in May 1965 by the appellant companyt Rs. 969-10. If these two, apparatuses are similar, then the companyt of the one said to have been purchased in May 1965 has doubled within one year which, prima facie, raises doubts about the genuineness of the transaction. A closer scrutiny however would show that the apparatus purchased in September 1964 from Messrs. Biswas Company may number be of the same capacity as the one said to have been purchased in May 1965 which is of ten litre capacity. From, a companyparative statement of quotations from different companypanies,, Ext. P-38, it is apparent that the quotation called in 1965 was for a distillation apparatus horizontal type capacity 10 litres for which, M s. Unique Trading Corporation, Bombay, quoted Rs. 925/-, Messrs. Goverdhandas Rs. 890/- and M s. Scientific Instrument Company Ltd., Allahabad Rs. 1229/- duty free price and Rs. 1920/,- duty paid, for which an import licence was requested From Ext. P-28-Extracts of order register of Messrs Goverdhandas it also appears that the price of a single stage distillation apparatus was Rs. 450/- which was the one that was cancelled on April 24,. 1965. Evidently Messrs. Goverdhandas wanted to sell two single stage distillation apparatuses and it was because of this that the appellant had cancelled the order. We have already seen that what was purchased from Biswas Company was a stadler still, quickfit type of double distillation, automatic with special type clamp. But there is numberhing to show from Ext. P-49A that it was for a 10 litre capacity. Nor is there any other evidence as fairly admitted by the learned advocate for the prosecution from which we can ascertains what was the capacity of that apparatus or that of, Article A. This would leave a lacuna in the prosecution case and probablise the appellants -contention that the apparatus Article A is number the same as that ,purchased earlier for the Atomic Energy Commission, but is the one which he purchased in Bombay in 1965. It is companytended by Mr. Chari for the appellant that the evidence of the prosecution must be, read in the light of the intense feeling of dislike and hostility exhibited by the Dean of the Medical College, against the appellant due to enmity and jealousy in his having been given projects of national importance. He has referred to certain evidence to show that at every stage the Dean has been companycerned with the investigation. It is number necessary to go into all the minute details of this companytroversy except to touch on the broad features. It is in evidence that initially the grant-in-aid was routd through the Dean in 1963-64 and 1964-65, but later from 1965-66 it was given direct to the appellant. The reason for this was explained by Durgacharan Chopra, P.W. 1 1, Under Secretary to the Government of India in the Department of Atomic Energy with headquarters at Bombay to be due to some trouble between the Dean and the appellant, because of which they had decided to place the grant at the disposal of the appellant for the year 1965-66. Besides, Dr. Barat D.W. 1 whose evidence will be dealt with latter in his letter to Dr. Subramanian, Ext. D-15, says that the appellant was treated badly. He said that he had leant that the appellant was physically obstructed by the College Chowkidar when he tried to return the equipment belonging to the witness, in which the appellant sustained minor injuries which he saw when he came to him with the apparatus. He also says in that letter that Dr. Chowdhary rang him up in the evening of Monday on February 14. 1967, that Dr. Subramanian did number want the removal and return of the articles by the appellant saying that he cannot under- stand when the articles did number belong to the Government, and were loaned to the appellant through him, and asks why they companyld number be removed by the appellant when a legal numberice was served on him. We have already numbericed how after the appellant dismissed Khare P.W. 23 he was immediately employed by the Dean. All this would indicate that there has been a great deal of ill-will and hostility between the appellant and the Dean. Apart from viewing the prosecution evidence in the light of this background, there is the defence evidence. This evidence has been summarily rejected, and, in our view, without any companyent reasons. Dr. Barat D.W. 1 says that he was the one who had started the research of the I.C.M.R. and Atomic Energy Commission Projects. He is a member of the executive companyncil of the Jabalpur University and is a companysulting physician. He says that after the sudden death of Professor Dr. Wahi from companyonery heart trouble, the appellant started getting pain in the chest and he companysulted him. He had taken his E.C.G. and referred him to Dr. Datey, President of Cardiological Society of India for a thorough check-up. As there was some abnormality he was asked to go for another check-up to Bombay from where the appellant returned after his second check-up, some time in the month of May 1965. The witness had sent his car to bring the appellant from station and to take him to Medical College and the appellant had dropped in at his place to see him on his way to the Medical College. When the appellant came to see him two packages were lying in his car on the black seat by his side and the witness asked him what those were. The appellant told him that he had bought some apparatus. It appears that in the High Court some interpolation was made in this evidence which would indicate that the appellant had showed him a lass distillation apparatus. We are number number companycerned with this interpolation, but as the evidence was recorded it shows that the appellant had told the witness that he had bought some apparatus. After a week or two when the witness went to the Medical College to see the appellant in his Department he enquired from the appellant as to what he had bought and the appellant showed him a double distillation apparatus with some modification for triple distillation and the apparatus appeared to be new. The witness also says that the appellant companyplained to him about the treatment given to him by the Dean of the Medical College Dr. B. H. Choudhary. On hearing this companyplaint the witness had written to the Director of Health Services, Madhya Pradesh, Ext. D-15, and forwarded a companyy of the letter to the appellant for his information. The High Court thought that this evidence is number direct evidence to show that really a double distillation apparatus was purchased by the appellant in Bombay. With this bare companyment his evidence was discarded, and we think, without justification, because it is difficult to understand how and what D.W.1 has said is number direct evidence. What he saw, what he observed, and what he was told by the appellant when that is in issue cannot, but be direct evidence. Similarly another witness Hamidullah Khan D.W.2 who was supplying animals for the experiments and who had made a clamp for the double distillation apparatus in October- November 1964 which is the one obtained from Biswas Company was characterised as a purely chance witness and there is numberhing in his examination to show how the appellant happened to know that he had seen the apparatus in a broken companydition or that he is likely to be a possible defence witness in this case. This witness had gone to the Medical College during the period when the appellant was laid up with a heart attack which was about the 1st week of February 1965. He says it was then that he saw the double distillation apparatus lying in a broken companydition. After the appellant came back from Bombay in the last week of May 1965 he had again been to the Hypoxia Laboratory and saw the appellant fixing a double distillation apparatus which was opened from packing. We have gone through the cross-examination of this witness and we find that there is numberhing in that evidence which would make it unacceptable. There is numberquestion of this witness being a chance witness. He was number only directly companynected with the Department, but had also made a clamp for the double distillation apparatus and was visiting the appellants office. When asked about the broken distilla- tion apparatus he said that he came to know from a part of the apparatus which was still attached to the clamp that it was broken. From the mere fact that he said that the appellant had told him that day in the morning that he was cited as a witness though he did number tell him what the case was, his evidence has been disbelieved. We do number think that this by itself is such as to destroy the substantive part of his evidence. In any case the evidence of Rasiklal Shah D.W. 3 regarding the enquiry made by the appellant for a double distillation apparatus and his sending Dsouza with a plant which companyformed to the specifications given by the appellant and sending it with a companyering letter cannot be assailed, and in fact has number been rejected by the High Court. It however observed that his evidence was number direct evidence on the point that a double distillation apparatus was purchased by the appellant on May 17, 1965. It is true that D.W. 3 did number know whether in fact the appellant had purchased the double distillation apparatus. But that he did send one through Dsouza with a companyering letter cannot be gainsaid. The letter which is an important piece of evidence is as follows Sub Standler Quickfit type Double Distillation extra strong Pyres SKB. We refer to your telephonic talk and have to inform you that we are out of stock of the above cited item, but the other party is having, who is companying with this letter to you, with the Apparatus, if it serves your purpose, you may buy the same directly from him against companyt, for Rs. 989.35 nett. only. We are really sorry to learn from your phone message that you are number keeping well, and hope, you will be all right very soon. Nothing has been urged why this letter should number be accepted in evidence. There is numbersuggestion or whisper that it was fabricated or got up subsequently. Once the genuineness of the letter sent by D.W. 3 to the appellant is believed, it companyroborates his plea that he did make enquiries from Rasiklal Shah, and that Rasiklal Shah had sent a person with the apparatus for which he paid the amount and obtained a receipt. It was urged that neither Dsouza number J. R. Patel who gave the receipt were examined. We have had occasion to observe earlier that the standard of proof which the accused may adduce in support of his plea in defence is number the same which the prosecution is required to adduce. Once the. probability of the accuseds plea is established, we must give him the benefit of doubt. There is numberhing to show that the accused fabricated the receipt. As we have pointed out, the appellant had at the very initial stage, even before the F.I.R. was issued, produced the original receipt and gave a companyy of the same to the investigating officer. This would indicate that the bill and the receipt were genuine. The prosecution, however, has sought to establish by evidence that there was numbersuch firm as M.B. Corporation. But the appellant is number responsible if a spurious bill assuming that it was so was given to him or that he knew that it was spurious. This cannot therefore affect the case of the appellant that he had purchased the double distillation apparatus on May 17, 1965 and paid for it. In fact he paid for it about Rs. 20/- more than he got from the demand draft. If he wanted to misappropriate the money by producing a bogus receipt, he companyld have got the receipt for the exact amount of the draft. It may be mentioned that Taneja Bansilal P.W. 14 Director-General of the I.C.M.R. also admitted that the appellant had companye to Delhi in companynection with the purchase of the apparatus and told him that the apparatus was purchased from some firm, whose name he did number remember, but it was number the firm of Messrs Goverdhandas. In the circumstances the plea of the appellant is substantiated. No doubt in this case the prosecution has established that the appellant has drawn a bill and obtained a draft for Rs. 969-10 before the apparatus was supplied. But this is an irregularity and does number show that he had numberintention of purchasing the apparatus or to misappropriate the money. Academicians are number generally known for their administrative sagacity or for being companyversant with all the companyplicated technical rules. We do number by this intend to imply that the rules and instructions should number be companyplied with, but when it is apparent from the evidence that the appellant had numberclerical staff to assist him and was anxious to carry on his research work, any lapse on this account does number make him criminally liable. The appellant, in our view, has been the victim of suspicion probably due to the unfriendliness, hostility and enmity of the Dean of the Medical College, which ultimately resulted in his being, it we may say so, subjected to this prosecution which must have caused him great distress and anguish apart from the Department being deprived of his services in a project of national importance. We have numberhesitation in holding that the accused is innocent. The appeal is allowed and the companyvictions and sentences in respect of the several offences are set aside. The bail bond will be cancelled.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 238 of 1967. Appeal from the judgment and decree dated February 9. 1965 of the Allababad High Court in Special Appeal No. 310 of 1960. N. Dikshit and O. P. Rana, for the appellant. P. Goyal and R. A. Gupta, for the respondent. The Judgment of the Court was delivered by Ray, J.-This is an appeal by special leave from the judgment dated 9 February, 1965 of the High Court at Allahabad dismissing the appeal filed by the State of Uttar Pradesh against the judgment of the learned Single Judge quashing the assessments of the respondent under the Uttar Pradesh Large Land Holding-, Tax Act No. 31 of 1957 hereinafter referred to as the Act and further holding that the respondent was entitled to the benefit under rule 6-A of the Uttar Pradesh Large Land Holdings Rules. 1957 hereinafter referred to as the said Rules . The respondent Raja was prior to the abolition Of Zamindari in the State of Uttar Pradesh the Raja of the properties known a Chandapur Raj companysisting of 28 village, in the Tahsil Maharajoanj in the District of Rae Bareli. The respondent was a minor till 3 March, 1958 and he attained majority on 4 March, 1958. The properties were under the management of the Court of Wards from 1945 to 1953 and thereafter under the management of the .District Judge, Rae Bareli tip to 4 March, 1958. on 1 April, 1958 the Tax Assessment Officer, Maharajganj Sub-Division served a numberice under section 7 2 of the 1957 Act on the respondent for the assessment Fasli year 1365 companymencing on 1 July, 1957 and ending on 30 June, 1958. The respondent was required by the said numberice to file a return for the agricultural year of the land holding of the respondent. The respondent filed a return and claimed benefit of exemption under rule 6-A of the said Rules in respect of the agricultural land which had been sub-let to tenants under the orders of the Court of Wards and the District Judge when the respondents properties were under their management. On 16 July, 1958 the Sub-Divisional Officer, Maharajganj being the Assessing Officer dismissed the respondents claim for exemption in respect of the land holding sub-let and passed an assessment order imposing tax on the land holding of the respondent for the sum of Rs. 62,011.39. It may be stated that the assessment according to the respondent should have been Rs. 34,274-6-10 as a result of the exemption under rule 6-A. Tile respondent preferred an appeal before the Commissioner, Lucknow Division. The appeal was dismissed. On 9 September, .1958 the Commissioner held that rule 6-A was number applicable to assessment of tax for the 1365 Fasli year. The respondent thereafter on 29 September, 1958 filed a writ petition in the High Court at Allahabad challenging the validity of the Act and for quashing the assessment orders. The learned Single Judge of the Allahabad High, Court on 29 February, 1960 held that the Act was valid and allowed the writ petition in part by holding that the respondent was entitled to the benefit of rule 6-A and therefore quashed the assessment order. The State filed an appeal. The High Court dismissed the appeal and upheld the judgment and order of the learned Single Judge. Counsel on behalf of the State raised three companytentions. First, it was said that tax was to be, assessed on the annual value of land holding as on 1 July, 1957 and inasmuch rule 6-A did number companye into existence on 1 July, 1957 the respondent was number entitled to the benefit of the rule. Secondly, it was said that rule 6-A was number at all applicable, because it was number proved that the land was lawfully sub-let. Thirdly, it was said that the High Court was wrong in issuing the writ on the ground of misconstruction of rule 6-A by the assessing authorities because it was number a patent error. The, 1957 Act came into force on 1 July, 1957. Section 29 of the Act empowered the State Government to make, rules for carrying out the purposes of the Act. The rules were published in the U.P. Gazette, Extraordinary dated 23 November, 1957. Rule 6-A was added to the Rules by an amendment on 23 April, 1958. The companytention on behalf of the State was that because rule 6-A was number made retrospective with effect from 1 July, 1957 but that rule 6-A came into existence on 23 April, 1958, the said rule would number be applicable in respect of assessment companymencing 1 July, .1957. This companytention is unacceptable as it is unsound. Under section 3 of the Act holding tax at the rates specified in the Schedule of the Act is levied for the agricultural year on the annual value of each land holding. Section 4 of the Act defines land holding. Section 5 of the Act deals with annual value of the land. Rule 6-A states that where any land holding has been legally sub-let by a disabled land- holder mentioned in sub-section 1 of section 157 of the P. Zamindari Abolition and Land Reforms Act, 1950 the holding tax shall be remitted to the extent of that chargeable on the land sublet if its annual value were arrived at by multiplying the rent payable by 10 1/2. The respondent was a disabled land-holder within the meaning of section 157 of the Zamindari Abolition and Land Reforms Act, 1950. The land had been lawfully sub-let while the properties were under the management of the Court of Wards and thereafter the District Judge. The companytention of the appellant that the respondent became a major on 4 March, 1958 and therefore he companyld number get benefit of the rule is untenable. Rule 6-A refers to land which has been legally sub-let. Therefore, the sub-letting must be anterior to the making of the rule on 23 April, 1958. The entire fallacy of the appellant is that to make rule 6-A effective from 23 April, 1958 would be to rob rule 6-A of its extent and companytent in respect of assessment. Rule 6-A is to be read with sections 3, 4 and 5 of the Act, The assessment was for the entire agricultural year from 1 July, 1957 up to 30 June, 1958. The land which had been lawfully sub-let companyld number be in the possession of the respondent in the assessment year. Therefore in assessing the land holding for the year 1365 Fasli the respondent was entitled to claim benefit under Rule 6-A in respect of land which had be-en legally sub-let. Rules are made for carrying out the purposes of the Act. One of the purposes is to assess the land holding for the agricultural year. Rules are in regard to filing of the return and manner and mode of companyputation of annual value. Exemption under rule 6-A is a benefit in relation to assessment by reason of the process of companyputing the valuation of land holding. The companytention on behalf of the State that Rule 6-A was number made retrospective and therefore it does number apply is devoid of merit. To accede to the companytention of the State would mean that the rules which came into existence on 23 November, 1957 would number at all the applicable to the assessment which companymenced on 1 July, 1957. That would be an absurd position. The Act came into force on 1 July, 1957. The assessment was to be made for the year companymencing 1 July, 1957. Rules were Made under section 29 of the Act. Rules obviously came into existence subsequent to the Act companying into force. Rules are procedural. Rules relate to the assessments. The assessment is for the entire year. The assessment in the particular instance was made after rule 6-A came into effect. The assessment was pursuant to numberice which was delivered on 1 April, 1958. The assessment was for the whole year ending 30 June, 1958. Therefore, rule 6-A would be applicable to the assessment which was number only pending but would be up to 30 June, 1958 within which period the rule became effective for the assessment year. It is also important to numberice that the benefit under rule 6-A enures to the land holding which has legally sub-let. The land holding fulfils that character during the assessment year with the result that rule 6-A is attracted by the quality of land for quantifying the assessment. The second companytention of the State that the land had number been legally sub-let cannot be entertained. In the High Court the State did number dispute the legality of sub-letting. It is, therefore, number, open to the State to raise that companytention. The third companytention of the State that there is numberpatent error and therefore the High Court was wrong in issuing a writ is unacceptable. The respondent Raja raised a companytention as to the application of rule 6-A. This is a question of companystruction of the statute and rules in respect of assessment. The High Court was justified in issuing the writ.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1053 of 1971. Appeal by special leave from the judgment and order dated March 1971 of the Madras High Court in Writ Appeal No. 120 of 1971. S. Desai, M. C. Bhandere and S. P. Nayar, for the appellant. M. Singvi, A. V. Rangam, R. Krishnamoorthi and A. Sub- hashini, for respondent No. 1. V. Goswami, for the intervener. The Judgment of the Court was delivered by Dua, J. This appeal by special leave is directed against the judgment and order of the Madras High Court dated March 25, 1971 dismissing at the stage of admission an appeal under cl. 15 of the Letters Patent preferred by the appellant against the judgment and order of a learned single Judge of that Court dated September 1, 1970 allowing writ petition number 933 of 1970 filed by the respondent praying for a writ of mandamus directing the Licensing Authority under the Imports Exports Control Act, 1947 to do his public duty and companysider the applications for import licence made by the respondent. More than 200 writ petitions were heard together and disposed of by a companymon judgment of the learned single Judge, the facts in the respondents writ petition No. 933 of 1970 being, by companymon companysent, treated as illustrative of all the other cases as well. On December 7, 1968 Lala Manickchand, proprietor of Messrs Katrella Metal Corporation, Madras, respondent in this Court, submitted an application, as a new unit, for the licensing period,1968-69 for the grant of an import licence for Rs. 9,900/for importing stainless steel as an actual user for manufacturing. hospital requisites. The registration certificate dated December 31, 1968 issued to the respondent as a small scale industry by the Additional Assistant Director of Land Commerce, District Madras North, reads DEPARTMENT OF INDUSTRIES COMMERCE SMALL SCALE INDUSTRIES DIVISION No. 571 Registration No. MS.N.SSI/506/033 CERTIFICATE This is to certify that M s. Katrala Metal Corporation 54 Sydenhams Road, Madras 7 office at 90 N.S.C. Bose Road, Madras 1 is a genuine Small Scale Industry engaged in the manufacture of Hospital and Surgical Instruments, Trays, Mugs, Basins and Household Utensils out of Stainless steel. Sd S. Gopalakrishnan Addl. Asstt. Director of Land Commerce, District Madras North 23-12-68 According to Import Trade Control Policy 1968-69 indus- tries engaged in the manufacture of medical and surgical equipment and appliances were included in the list of priority industries at sl. number 39 of Appendix I in Section The import policy is announced and published by the Government of India, Ministry of Commerce, on the eve of each financial year by means of a Public Notice which is issued in the form of a book called the Import Trade Control Policy, companymonly known as the Red Book. Prior to 1962 the import policy used to be published on half-yearly basis. But with effect from the financial year 1962-63 the Red Book companytains the policy for the whole year. As a supplement to the Red book is the Handbook of Rules and Procedure on Import Trade Control. Its provisions are brought into force by a Public Notice published in the Gazette of India Extraordinary. It embodies the procedures, rules and regulations governing the submission of applications, grant of licences, their validity and utilisation and other matters relating to import, trade companytrol. The instructions companytained in this book are applicable subject to future amendments and to the provisions of the relevant import trade companytrol policy book vide cl. 6, Chapter 11 of Handbook of Rules and Procedure, 1968. As is obvious from the preface of the Red Book for the year 1968-69, in formulating the import policy, account is generally taken of all the suggestions received from individuals, chambers and associations of trade and industry, Export Promotion Councils, Commodities Boards, Board of Trade and others. it appears that according to this policy import for household utensils was number available as a priority item and this necessitated further clarification from the respondent. In the meantime on January 30, 1969 Licensing Instruction No. 4/69 was issued from the Iron and Steel Control Department I E Division . It said IRON STEEL CONTROL I E DIVISION Office Note LICENSING INSTRUCTION No. 4/69 Dated 30-1-1969 It has companye to the numberice of the Iron Steel Controller that a large number of applications have been received for import of Stainless Steel Sheet plates and strips from newcomer units during 1968-69. As a measure of precaution, the Regional Office and Licensing section were requested to suspend further issue of licence vide Iron Steel Controllers telegram dated 9th January, 1969. The position has been reviewed, in companysultation with the Department of Iron Steel, and it has been decided that the applications for Stainless Steel Sheets, plates and strips received from newcomer units during 1968-69 should be scrutinised by the Directors of Industries and the Regional Offices and Licensing Sections very carefully, before import licences are granted, with a view to ensuring that new units which are number well-equipped do number get away with import licences of this sensitive item. For the purpose of scrutinising the applications, it is necessary to call for the following data from the .applicant Date of registration of the unit. Date on which power companynection was obtained. Details of the machinery installed. Value of the machinery installed. Whether the machinery is imported or indigenous. The address of the firm from whom the machinery was purchased. Date of purchase of the machinery. Date of installation of the machinery. Details of the end products to be manufactured. Whether the unit is fully equipped to manufacture the items in question. Past experience of the firm in manufacturing line. Technicians employed and their technical qualifications. Whether any market survey has been companyducted for the disposal of the products to be manufactured. If so, the results thereof. Regional Offices and Licensing Sections are directed to write to all the new companyners, who have sent their applications for Stainless Steel Sheets plates and strips to furnish the above information to the respective Directors of Industries direct, endorsing a companyy to the Regional Offices and the Licensing Sections. Copies of these letters may be endorsed to the respective Directors of Industries, with the request that they should scrutinise the applications with reference to the date that may be furnished by the applicants carefully, and thereafter send their recommendations revised recommendations as the case may be to the licensing offices. Regional Office and Licensing Sections are directed to take immediate action on the lines indicated above. Sd C. B. Mathur Officer on Special Duty. It is quite clear from these instructions that stainless steel sheets were companysidered a sensitive item and that a large number of newcomers had applied for import of stainless steel sheets, plates and strips whose applications required close scrutiny. On May 2, 1969 the respondent, while giving information about Jr end-products, stated in a letter that hospital requisites such as surgical bowls, spittoons and trays were intended to be manufactured by the industry. On May 19, 1969 the Chief Controller of Imports and Exports, from the Ministry of Foreign Trade and Supply issued General Licensing Instruction No. 29/69 on the subject of import licences to units engaged in the manufacture of hospital equipments. These instructions pertained to the import policy for April 1969-March, 1970, and referred to medical and, surgical equipment and appliances which was the subject matter. of Item No. 39 in Appendix I of the Red Book for that year. In para 2 it was stated that some Licensing Authorities were treating the manufacture of hospital equipment as priority industry under the general heading medical and surgical equipment and appliances. It was pointed out that all types of hospital equipment and hospital appliances were number classified as priority industries and it was added by way of illustration that lotion bowls, kidney trays, instrument trays, wash bowls, measuring jugs, ointment jars and medicine cups as end-products were in number-priority category. The sponsoring authorities were accordingly directed to ensure that only those hospital equipment and appliances were to be treated as priority industries which would appropriately be classified as medical and surgical equipment and appliances. On May 29, 1969 the Chief Controller of Imports and Exports issued General Licensing Instruction No. 31 of 1969 on the subject of grant of import licence to units engaged in the manufacture of hospital equipment. After inviting attention to the earlier G.L.I. No. 29/69 dated May 19, 1969 it was stated in this instruction that after further companysideration in companysultation with the D.G.T.D. a list had been prepared in respect of the end-products which alone would be treated as priority industries under the general heading medical and surgical equipment and appliances. That list was enclosed for the guidance of the Licensing and Sponsoring authorities and in case of doubt those authorities were directed to refer the matter to head-quarters Special Licensing Cell. On October 31, 1969 the Director of Industries, Madras, companyfirmed the Essentiality Certificate already issued to the respondent. It was observed in that letter that the firm had installed machinery and taken action to obtain power supply etc. Hence the Essentiality Certificate issued to the firm already is companyfirmed. On February 23, 1970 a letter was written by the Director of Industries and Commerce, Madras to the Deputy Assistant Iron Steel Con- troller, Madras, in which after referring to his earlier letter dated October 31, 1969 and to the respondents letter dated February 6, 1970, it was stated In view of the assurance given by the firm that they would manufacture only Surgical Equipment like Sterilisers, Operation Tables, Auto-Claves etc., I recommend that M s. Katrella Metal Corporation, 54, Sydanhams Road, Madras for whom Essentiality Certificate has been issued for import of stainless steel sheets for the period April-March, 1969 may please be treated as PRIORITY INDUSTRY and licence issued to them on this basis. Apparently, the Director of Industries was the sponsoring authority in this case. It was in these circumstances that the respondent filed the writ petition in the High Court on March 30, 1970 claiming a writ of mandamus as stated earlier, the sole grievance being that the respondents application for import licence had during all this period number been taken up for final disposal. According to the respondents case in the High Court, the firms factory had-been manufacturing various items since 1962 by purchasing raw material from local market with the annual turnover of about 8 to 10 lacs. With regard to the respondents application for import licence for manufacturing hospital and surgical equipment it was added that the Director of Industries had issued the Essentiality Certificate in April, 1969 and recommended the respondent for treating it as a priority industry on February 23, 1970. In the companynter-affidavit in that Court it was number companytested that the writ petitioner was entitled to have his applications companysidered. According to para 10 of the companynter-affidavit on which the learned single Judge of the High Court, disposing of the writ petition, relied, it was stated inter alia .lm15 in the case of units engaged in the manufacture of number- priority end-products, as in the case of the petitioner, the Chief Controller of Imports and Exports had advised the department to keep the applications pending until the companypletion of the examination. The petitioners application companyld number therefore be disposed of. However, instructions have since been received vide the Chief Controller of Imports and Exports, New Delhi letter dated 8-4-1970, which inter alia provides that applications received by the sponsoring authorities in time may be companysidered irrespective of the date on which they were forwarded to the licensing authorities and in terms of the licensing policy for 1970-71. It was added in this para of the companynter-affidavit According to policy for 1970-71, the material stainless steel sheets is a canalised item for number-priority industries and release orders are to be issued on Minerals and Metals Trading Corporation. In the judgment of the learned single Judge it was stated to be companymon ground that the application of the writ petitioners had to be dealt with in terms of the relevant import policy in force for the year 1968-69. However, a little lower down in that judgment, after reproducing the relevant portion of paragraph 10 of the companynter-affidavit, it was also observed Learned companynsel for the Central Government urged that the Licensing Authority whoever it is, is prepared to companysider the applications of each of the petitioners in this batch of writ petitions, but such appraisal of the applications would be in terms of the licensing policy for the year 1970-71. Thus in effect, the respondents companycede the right of the petitioners to have their applications companysidered and disposed of in a manner known to law, but the only opposition is that such applications filed and number pending will be companysidered in the light of the licensing policy for 1970-71. It was in this companytext that the High Court observed that it was practically companyceded that the rule nisi had to be made absolute and that some more directions were necessary. Relying on r. 7 2 in Chapter 11 of the Handbook of Rules of Procedure, Import Trade Control for the year 1968, according to which applications for licences were required to be companysidered in terms of the relevant policy in force, the learned single Judge directed that the Licensing Authority do companysider the applications number pending before him which are the subject matter of these writ petitions within six months from this date bearing in mind the above directions and in particular deal with the said applications, applying the import trade companytrol policy prevailing in 1968-69 or 1969-70, as the case may be according to the dates of application for licence. On appeal before the division Bench under cl. 15 of the Letters Patent it was companyplained by the appellant, the Deputy Assistant Iron Steel Controller, that the instructions of the learned Judge interfered with the policy introduced in 1970-71 because under the new policy import of stainless steel was canalised through the Minerals and Metals Trading Corporation for number-priority industries. The division Bench did number companysider this objection to be valid because in its view had the applications been companysidered in time and without delay and the import licence sought granted, these companyplications would number have intervened. The Department, according to the High Court, companyld number take advantage of the delay in disposing of the applications for licence made earlier and then take the plea that they should be disposed of only in accordance with the current policy and instructions given as to canalisation. On this view the appeal was dismissed but time for granting the import licence was extended by a further period of three months from the date of the order viz. March 25, 1971. In this Court the question canvassed at the bar is a very narrow one, namely, whether the application for the import licence in question should be companysidered in accordance with the policy in force when the licence is granted or when the application is made. No point of mala fides or arbitrariness was argued in the High Court and numberserious attempt was made on behalf of the respondent to sustain the impugned order of the High Court on that basis, as indeed, it is number possible for this Court to entertain and adjudicate upon such a plea in this appeal in the absence of a companysidered opinion of the High Court. The appellants learned companynsel Shri V. S. Desai at the outset drew our attention to s. 3 1 a of the Imports Exports Control Act, 18 of 1947 which empowers the Central Government to prohibit, restrict or otherwise companytrol imports and exports and to cl. 6 1 a of the Imports Control Order, 1 9 5 5 made by the Central Government in exercise of the powers companyferred on it by ss. 3 and 4 of Act 18 of 1947. Clause 6 1 of the Order em- powers the Central Government or the Chief Controller of Imports and Exports to refuse to grant a licence or direct any other licensing authority number to grant a licence if numberforeign exchange is available for the purpose or if the grant of a licence to an applicant is prejudicial to the interest of the State or if it has been decided to canalise imports and distribution thereof through special or specialised agencies or channels. The scheme of these provisions, according to the submission, suggests that the respondent has numberabsolute right to the grant of a licence merely because his application has been recommended by the sponsoring authority and that the licensing authority may decline to grant the licence on other relevant companysiderations affecting the larger and more vital interests of the economy of the State and also other relevant factors beyond the companytrol of the State. In this companynection refe- rence was also made to para 91. of Chapter IV of the Import Trade Control Handbook of Rules and Procedure 1968 which reads Issue of import licences to actual users for back period 91 I Where an application for import licence from an actual user is number disposed of during the licensing period companycerned on account of any delay or laches on the part of the applicant, numberlicence against such application will be issued after the expiry of the licensing period or after the close of the monetary ceiling. However, if the delay in the disposal of the application is on the part of the licensing authority or sponsoring authority or any other Government Department, the application will be companysidered on merits. While dealing with an import application for a back period in appeal or otherwise, the authorities companycerned will companysider such an application having regard to the general principles laid down, that is, availability of monetary ceiling, availability of goods applied for from indigenous sources or other companymercial channels, essentiality of the goods applied for, stocks held by the L864Sup CI/72 applicant and expected arrivals against licences in hand, past imports and companysumption of the item s in question by the applicant, actual production during the preceding period, estimated production and other factors companysi- dered relevant and necessary. In case where the applications for licences are number disposed of during the licensing period companycerned or before the close of the monetary ceiling on account of delay on the part of the sponsoring authority or the licensing authority or any other Government Department the value of the licences issued in such cases will be treated as first charge on the monetary ceiling to be allocated for the next licensing period and the necessary intimation in this regard will be given to the sponsoring authority. According to Shri Desai the entire position of monetary ceiling, availability of good-, applied for from indigenous sources, essentiality of the goods applied for and other relevant factors have to be seen for companysidering the question of issuing import licences to actual users for back periods. These companysiderations, said Shri Desai, indicate that if availability of the goods applied for, from indigenous sources, improves or the position in regard to foreign exchange deteriorates or there is a chance in the matter of essentiality of the goods applied for, then, it would be and, indeed, it should be open to the licensing authority to companye to a fresh decision on the question of issuing the licence uninfluenced by the companysideration that during the previous licensing period the situation being more easy, the import licence applied for would have been more readily granted. The import policy is influenced by the companydition of foreign exchange which depends on various factors, some of which may even be wholly beyond the companytrol of the State and, therefore, the licensing authority would be entitled to take them into account at the time when the licence is actually issued. Shri Desai in support of his submission relied on the following observations from the decision of this Court in Glass Chatons Importers and Users Association v. Union of India 1 It is obvious that if a decision has been made that imports shall be by particular agencies or channels the granting of licence to any applicant outside the agency or channel would frustrate the implementation of that decision. If therefore a canalization of imports is in the interests of the general public the refusal of imports licences to applicants outside the agencies or channels decided upon must necessarily be held also in the 1 1962 1. S.C.R. 862 at 866. interests of the general public. The real question therefore is Is the canalization through special or specialized agencies or channels in the interests of the general public. A policy as regards imports forms an integral part of the general economic policy of a companyntry which is to have due regard number only to its impact on the internal or international trade of the companyntry but also on monetary policy, the development of agriculture and industries and even on the political policies of the companyntry involving questions of friendship, neutrality or hostility with other companyntries. These observations have also been pressed into service by Shri Desai in support of his companytention that canalising of applications for the import of stainless steel having been introduced since April 1, 1970 it is number open number to issue the import licence to the respondent without the application being canalised according to the prevailing procedure. The learned companynsel, however, offered, as agreed in the High Court, to companysider the respondents application according to 1970-71 policy. Shri Singhvi on behalf of the respondent companytroverted the appellants argument by strongly relying on the letter dated February 23, 1 970 from the Director of Industries to the Deputy Assistant Iron and Steel Controller in which reference was made to the respondents assurance to manufacture only surgical equipments like sterlisers, operation tables, autoclaves etc. and it was recommended that import of stainless steel sheets for the period 1968-69 be treated as priority industry and licence issued to the respondent on this basis. As canalising policy was intro- duced only on April 1, 1970, when the respondents case, according to Shri Singhvis argument, had already been companypleted Is a result of the assurance companytained in the letter of February 23, 1970, the respondents industry was number governed by this policy and was entitled to get the import licence. Shri Singhvi placed strong reliance on r-. 7 2 companytained in the Import Trade Control Handbook of Rules and Procedure of 1968 and companytended that the applications for licences must be companysidered in tern-is of the relevant policy in force at the time of making the application. Reference in this companynection was also made to r. 81 c , according to which the role of the licensing authorities is To issue licences on the basis of the recommendations of the sponsoring authorities where such recommendations are in companysonance with the policy procedure in force In the case of rejections, to companymunicate reasons thereof to the applicants To take penal action against the licencees or importers for violations of import and export companytrol regulations. To watch the utilisation of ceiling, if any. It was further companytended that the recommendation of the sponsoring authority has to be given due companysideration by the licensing authority as provided in r. 80. The learned companynsel submitted that if the import policy prevailing in 1968-69 is number applied to the respondent, then, the respondent would suffer in respect of the applications made for the years 1969-70 and 1970-71 though this argument was number developed and the companynsel was companytent merely by asserting prejudice to his client. It may be recalled that the respondent applied for the licence ,I, a new unit. Para 82, sub-para 2 companytained in the Handbook of Rules and Procedure for 1968 provides 82 2 New Units Priority industries a The new units, both in the large and the small scale sectors, should make their first and second import applications for raw materials and companyponents in a licensing period, through the sponsoring authority companycerned, each companyering their requirements for six months. Subsequent applications can be made by them on the basis of actual companysumption, in the same manner as has been laid down for the existing units engaged in the priority Industries. In the case of proposed units, the sponsoring authority will recommend a licence against the second application only after the unit has gone into production. c Para 53 of the Red Book 1968-69 is in the same terms as para 82 2 a . Prima facie, without the new units actually going into pro- duction, numberquestion of recommendation for a licence against the second application companyld arise. But the point having number been fully pursued we express numberopinion on this aspect. The respondents learned companynsel also submitted that about 163 applications for import licence,, had been dealt with by the licensing authority and the licences granted to the applicants. Reference in this companynection was made to the affidavit of Lala Manickchand filed in the High Court in support of the writ petition in which it was asserted that licences had been issued in March, 1969 to 163 applicants for the value of Rs. 9,900 each. These licences, according to the assertion in this paragraph, had been granted without any basis, though a little lower down it was added that those applicants were similarly placed as the respondent and, therefore, the issue of import licence to them showed discriminatory companyduct violative of rules of natural justice and equality. It was also added that according to the respondents information another 321 applicants were going to get licences without any proper basis or criteria. The companynsel also made a reference to that part of the respondents affidavit in the High Court where it was stated that if, as the respondent had reliably learnt, the 300 applicants who had asked for import licences were to be granted their prayers then the ceiling limit allotted for the year would be exhausted and the respondent would number get any relief. It was for this reason that prayer was made in the High Court for restraining the Joint Chief Controller of Imports and Exports from issuing any licence to any other person pending disposal of the respondents application. According to Shri Singhvi on April 9, 1970 an undertaking was given by the State in the High Court that the plea of exhaustion of the quota would number be taken by it for defeating the respondents claim. This submission was apparently made for the purpose of companytroverting the companytention that the availability of foreign exchange being one of the vital companysiderations determining the grant of import licence, it is the prevailing position of foreign exchange at the time of ,- ranting the licence which has to be seen. Shri Desai having denied any such undertaking in the High Court and our attention having number been drawn to any such undertaking on the record of the High Court, we do number companysider it proper to take into account this assertion made on behalf of the respondent. Shri Singhvi relied on a decision of the Madras High Court Sha Maggajee Saremall Bros v. Joint Chief Controller of Imports and Exports 1 the head-note of which reads Where a transfer of quota rights is effected as a result of change in the companystitution of the firm, the new companystituted firm becomes entitled to the transferred quota as from the date on which the reconstitution was effected and number from the date on which the Chief Con- troller of Imports purports to accord recognition to such reconstitution. The fact that a rule by, way of an instruction has been introduced in the Red Book limiting the companysideration of applications only to the immediately prior period cannot have any value in so far as the rights of parties companye in for examination. The rights of the established importer to the licence for the back periods cannot be A.I.R. 1966 Mad. 309. denied if his application had been kept pending for reasons other than laches on the part of the applicant. An application for import licence for a particular period must be companysidered only in the light of the policy relevant to that period and cannot be refused on the basis of a later policy which might have changed the position with regard to the licences for the import of the item applied for. Decision in W.A. No. 15 of 1960 Mad. and in W.P. Nos. 27, 47, 48 of 1961 Mad. followed. This decision deals with a situation created by the transfer of quota rights effected as a result of change in the companystitution of an existing firm which was an established importer and, therefore, cannot lend much assistance in dealing with the facts before us. The unreported decision of this Court in The Municipal Corporation for Greater Bombay The Advance Builders India Pvt. Ltd. 1 , also relied upon by Shri Singhvi merely lays down that where a statute imposes a duty the performance or number-performance of which is number a matter of discretion, a mandamus may be granted ordering that to be done which the statute requires to be done Halsburys Laws of England, Third edn. Vol. II, p. 90 . Quite clearly, this decision only reiterates the recognised rule in regard to the grant of mandamus and is of little help to the respondent. In our view the plea of arbitrariness and mala fides having number been pressed in the High Court it is number possible for this Court to companysider it. The material on the existing record to which our attention was drawn is number enough to make out a prima facie case of either mala fides or arbitrariness to justify any further scrutiny. Indeed, in the High Court the State had agreed to companysider the respondents application and the only companytroversy there was as to the year of which the import policy was to govern the respondents application. For this purpose, reliance was placed neither on the plea of mala fides number of arbitrariness with the result that we decline to go into these pleas. There is numberdoubt that speedy disposal of applications for import licences is of the greatest importance. Indeed, in the Import Trade Control Handbook of Rules and Procedure, 1968 paras 302 to 304 have been exclusively devoted to the subject of Checks on delays. They provide 302 1 Every effort is made to avoid delays in the disposal of applications for licences or companyrespondence. Reminders in regard to the delayed cases are attended to promptly by the licensing authorities. C.A. No. 1121 of 1970 decided on 25th August, 1971. .lm15 Complaints regarding delay addressed to the Chief Controller of Imports and Exports, New Delhi, should be specifically marked Complaint against delay at the top of the companymunication companytaining the companyplaint. The applicant should also bring cases of delay to the personal numberice of the Public Relations Officer in the Import Trade Control office companycerned. The Public Relations Officer of the rank of the Deputy Chief Controller of Imports and Exports has been appointed at the headquarters of the office of the Chief Controller of Imports and Exports, New Delhi. In the regional offices also, Public Relations Officers have been appointed. Addressing of companymunications to import trade companytrol organisations It is numbericed that telegrams and letters received by the licensing authorities from the trade by way of reminder do number often companytain sufficient details to enable the licensing authorities to locate the previous papers. With a view to avoid delay in the disposal of such companymunications the trade should give brief details of the reference received by those from the licensing authority companycerned, the particulars of the goods sought to be imported and the I.T.C. classification of such goods. The companymunication should also indicate its subject matter, the category of the importer, the type of the licence to which it pertains, whether it relates to the grant of the licence or amendment Or revalidation thereof or an appeal, and it should also give the number and date of the relevant original application. Enquiries regarding the position of applications. 304 a The arrangement under which the importers companyld enquire the position of the import application by filling the import enquiry slip has been discontinued. The licensing authorities will make every effort to dispose of the applications as quickly as possible. If an application for an import licence is number disposed of within one month from the date of its receipt in the licensing section the licensing authority will issue an interim reply to the applicant. If an applicant does number receive an interim reply even after this time limit, he can bring the matter to the numberice of the Public Relations Officer in the import trade companytrol office companycerned or book an interview with the officer companycerned through the Enquiry Officer in order to know the reasons for the delay in the disposal of his application. Where a licensing authority calls for certain documents or information from the applicant or any deficiencies in the application are companymunicated to the applicant, and the applicant has furnished the required documents or information or made good the deficiencies but does number receive any further companymunication from the licensing authority within 15 days thereafter, he can bring the matter to the numberice of the Public Relations Officer or book an interview with the Officer companycerned to know the reasons for the delay in the disposal of the application. Applications for import of capital goods and heavy electrical plant will take somewhat longer time. But in such cases also, if the applicant finds that there has been a delay in the disposal of his application, he can bring the matter to the numberice of Public Relations Officer or book an interview with the companycerned officer to know the reasons for delay. This importance is justified because it is necessary for our companyntry to utilise without undue delay the available foreign exchange, the supplies of which are limited, lest due to unforeseen circumstances beyond the companytrol of the State the position in this regard E deteriorates. Para 91 of this Handbook, which has already been reproduced, while properly safeguarding the right of the applicants for import licence also points out the companysequences of delay and laches on their part. In the present case, as is clear from the respondents companynter-affidavit and from what has already been stated earlier, in the advance companyy of the respondents application, numberparticular end-use of the stainless steel sheets required was specified and the respondent was asked to furnish particulars of the end-use and other required information in April, 1969. The S.S.I. Registration Certificate was for the end-products hospital and surgical instruments and household utensils. As per policy, there was a ban on issue of licences for stainless steel sheets for manufacture of household utensils. It was in May. 1969 after the expiry of the period 1968-69 that the respondent firm stated that they were going to manufacture hospital requisites such as surgical bowls, spittoons and trays. In the meantime. as is clear, there being a large number of new units who had applied for import licences, in April, 1969 the Department companysidered it desirable to have a further scrutiny and fresh instructions came into force with effect from April 16, 1969 GLI No. 23/69 . It is for these reasons, which cannot be companysidered to be irrelevant, that the application companyld number be disposed of during 1968-69 period. We are ignoring the fact that according to the companynter-affidavit the respondents application, along with the essentiality certificate, was received in the office of the Deputy Assistant Iron and Steel Controller on April 23, 1969 which was after the expiry of the 1968-69 period, and we are assuming without holding, that the respondents application had reached the appropriate authority during the 1968-69 period. It is number possible for us, on the material on the record and on the arguments advanced at the bar, to hold that there was any undue delay, laches or dilatoriness on the part of the Department in disposing of the respondents application during 1968-69. The history of the companyrespondence between the respondent and the Department, as already numbericed, clearly shows that the respondents application included items of manufacture which were number companyered by the priority list and as a result of a large number of new applicants for the sensitive item of stainless steel, the Department was companypelled to hold a proper scrutiny in the larger interests both of the healthy growth of industry and of the balanced economy of the companyntry. Fresh instructions for this purpose issued on June 4, 1969 became operative and the respondent was naturally required to companyply with these instructions. Since the respondents application companytained items which were number- priority end-products this application was kept pending until the companypletion of its examination, and in our opinion this was number unreasonable. It was on April 8, 1970 that the Chief Controller of Imports and Exports, apparently after proper review of the situation, issued instructions providing for the companysideration of applications like those of the respondent, irrespective of the date on which they were forwarded to the Department, in terms of the licensing policy for 1970-71. Though that period has expired, Shri Desai has fairly offered on behalf of his clients even number to companysider the respondents application in terms of the policy for that year. Now, it has to be borne in mind that in the present stage of our industrial development imports requiring foreign exchanging have necessarily to be appropriately companytrolled and regulated. Possible abuses of import quota have also to be effectively checked and this inevitably requires proper scrutiny of the various applications for import licence. In granting licences for imports, the authority companycerned has to keep in view various factors which may have impact on imports of other items of relatively greater priority in the larger interest of the over-all economy of the companyntry which has to be the supreme companysideration and an applicant has numberabsolute vested right to an import licence in terms of the policy in force at the time of his application because from the very nature of things at the time of granting the licence the authority companycerned may often be in a better position to have a clearer over-all picture of the various factors having an important impact on the final decision on the allotment of import quota to the various applicants. Shri Singhvis suggestion that the respondents companycern may have to close down if the import licence is number granted according to 1968- 69 policy is difficult to accept in view of the assertion in the writ petition claiming turnover of 8 to 10 lacs by purchasing raw material from local markets. In our opinion, numbercase has been made out on the Present record for a mandamus to the Department to companysider the res- pondents application for import licence in terms of 1968-69 policy. It is number possible on the existing material to companyclude that the Department is guilty of any undue laches or delay in dealing with the respondents application which would justify the Court in granting the mandamus prayed for. The High Court was thus number right in making the impugned order. As Shri Desai has given an undertaking that the respondents application would be companysidered in the light of the import policy for 1970-71 even though that period expired long ago, we need say numberhing more on this aspect. We would accordingly allow the appeal with the observation that the respondents application be companysidered in accordance with the import policy for the year 1970-71 without avoidable delay. In the circumstances of the case there would be numberorder as to companyts.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 213 of 1967. Appeal from the Judgment and order dated February, 17th 1965 of the Patna High Court in First Appeal No. 113 of 1960. C. Chagla, D. P. Singh, S. C. Agarwal, V. J. Francis, Goburdhun and D. Goburdhun, for the appellant. C. Setalvad, Sarjoo Prasad, A. G. Ratnaparkhi and Rajiv Shah, for respondent No. 1. The Judgment of the Court-was decided by Hegde, J. In this appeal by certificate we are to companysider the effect of the will executed by one Raghunath Prasad Singh, on August 31, 1938. The said testator died very soon after the execution of the will leaving behind him his widow Jageshwar Kuer, his daughter Satrupa Kuer and his two grand daughters Talkeshwari Devi the appellant herein and Sheorani. The appellant and Sheorani are the daughters of Sukhdeo Prasad Singh, the son of the testator who had predeceased the testator. Jageshwar Kuer died in November 1948 and Sheorani Devi on November 1, 1949 without leaving any issue. The dispute in this case is as to who is entitled to the properties devolved on Sheorani under the provisions of the will left by the testator. For deciding that question we have to refer to the relevant provisions of the will. the genuineness or validity of which is number in dispute. The will in question provides that after the death of the testator a portion of his properties detailed in the will was to devolve on Jageshwar Kuer absolutely and the remaining properties are also to devolve on her but therein she was to have only a life interest. The will further provides that after her death the entire property will be treated as 16 annas property out of which 5 annas 4 pies five annas four pies share companystituting proprietary interest will pass to Shrimati Satrupa Kuer alias Nan daughter of me, the executant and her heirs as absolute owners and the remaining 10 annas 8 pies annas ten and eight pies share will pass to both the minor grand daughters, 1 Shrimati Talkeshwari Kuer alias Babu and 2 Shrimati Sheorani Kuer alias Bachan in equal shares as absolute proprietary interest cf. 4 of the will . Clause 5 of the will says That if one of the two grand daughters named above, dies issueless, then under such circumstances the other living grand daughter will enter into possession and occupation of the entire 10 annas 8 pies and become the absolute owner thereof. At the time of the death of the testator, the appellant as well as Sheorani Kuer were minors. After the death of Jageshwar Kuer, the appellant and her sister Sheorani Kuer divided the ten annas eight pies share of the properties which devolved on them in equal shares and each one came into possession of her share of the properties. Immediately after the death of Sheorani Kuer, the appellant instituted a suit for possession of the properties that fell to the share of Sheorani Kuer purporting to base her claim on clause 5 of the will to which we have earlier made reference. That suit was resisted by the first defendant, the husband of Sheorani. He claimed that he was entitled to those properties as the heir of his wife. The trial companyrt dismissed the plaintiffs suit and the decision of the trial companyrt was upheld by the High Court. It was companytended on behalf of the appellant that in view of clause 5 of the will, the appellant is entitled to the suit properties as Sheorani Kuer had died issueless. This companytention, as mentioned earlier, did number find favour either with the trial companyrt or with the appellate companyrt. They have held that on a proper leading of the will as a whole, it is clear that clause 5 ceased to be operative on the death of Jageshwar Kuer, thereafter caluse 4 of the will was the only operative clause so far as the rights of the appellant and Sheorani ware companycerned. It is undisputed that the duty of the companyrt is to find out the intention of the testator but that intention has to be gathered from the language of the will read as a whole. I is clear from clause 4 of the will that the testator wanted to give to his grant-daughters an absolute right in the properties that were to devolve on them after the death of his wife, Jageshwar Kuer. The estate bequeathed under clause 4 of the will is number a companyditional estate. Clause 5 of the will relates to devolution and it does number provide for any divestment of an estate which had vested. The estate that vested on Sheorani was an absolute one. The will does number provide for the divestment of that estate. It is plain from the language of clause 5 of the will that it refers to the devolution, which means when the properties devolved on the two sisters on the death of Jageshwar Kuer. We are, unable to accept the companytention of Mr. M. C. Chagla, learned Counsel for the appellant that there is an-,- companyflict between clause 4 and clause 5 of the will. Clause 5 in our judgment would have companye into force if the companytingency mentioned therein had happened before the properties absolutely devoted on the two sisters. Clause 5 cannot be companysidered as a defeasance clause. If the testator wanted that the bequest made to any of his grand- daughters should stand divested on the happening of any companytingency, then he would have said so in the will, assuming that he companyld have made such a provision. But the will numberhere says that the properties bequeathed to the appellant and her sister should cease to be their properties on their dying issueless. Obviously what the testator intended was that if any of his grand-daughters dies issueless before the devolution took place then the entire property should go to the other granddaughter. To our mind the intention of the testator is plain from the language of the will. To find out the effect of the will before us we have to look to ss. 1-4 and 131 of the Indian Succession Act, 1925. Section 124 says Where a legacy is given if a specified uncertain event shall happen and numbertime is mentioned in the will for be occurrence of that event, the legacy cannot take effect, unless such event happens before the period when the fund bequeathed is payable or distributable. -L864 Sup.CI/72 Illustration ii to that section says A legacy is bequeathed to A, and in the case of his death without children, to B. If A survives the testator or dies in his lifetime leaving a child, the legacy to B does number take effect. If s. 124 applies to the facts of the case, as we think it does, then it is clear that the legacy claimed by the appellant is unavailable as the companytemplated companytingency did number occur before the fund bequeathed was payable or distributable. Section 124 deals with devolution. But as we shall presently see s. 131 deals with divestment of an estate that had vested. Mr. Chagla companytends that the governing provision is S. 131. That section says A bequest may be made to any person with the companydition super added that, in case a specified uncertain event shall happen, the thing bequeathed shall go to another person, or that in case a specified uncertain event shall number happen, the thing bequeathed shall go over to another person. had already vested. It speaks of an estate going over to another person. As seen earlier clause 5 of the will is number a defeasance clause. A case somewhat similar to the one before us came up for companysideration before the Judicial Committee of the Privy Council in Norendra Nath Sircar and anr. v. Kamal Basini Dasi 1 Therein a Hindu at his death left three sons, the eldest of full age and the other two minors. In his will were the directions My three sons shall be entitled to enjoy all the movable and immoveable properties left by me equally. Any one of the sons dying sonless, the surviving son shall be entitled to all the properties equally. Interpreting this clause the Judicial Committee held that those words gave a legacy to the survivors companytingently on the happening of a specified uncertain event, which had number happened before the period when the property bequeathed was distributable, that period of distribution being the time of the testators death. In arriving at this companyclusion, the Judicial Committee relied on s. 111 of the Indian Succession Act, 1865. That provision is similar to s. 124 of the Indian Succession Act, 1925. For the reasons mentioned above we are in agreement with the companyrts below that the suit brought by the appellant is un- sustainable.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 171 of 1967. Appeal from the judgment and decree dated April 12, 1966 of the Patna High Court in Appeal from Original Decree No.445 of 1963. 1006 V. Patel and U. P. Singh, for the appellant. B. Agarwala, Umesh Chandra singha , R. Goburdhun and D. Gob urdhun, for respondent No. 1. The Judgment of the Court was delivered by Mitter, J. This is an appeal from a judgment of the Patna High Court reversing the decree in favour of the plaintiff- appellant declared to be the duly installed Mahant of Turki Math and of all its subsidiary maths and as such entitled to possession of the properties companyered by the decree. The, undisputed facts are as follows. In the village of Turki in North Bihar there is a Math or as that of the Kabirpanthi Bhagatatha Vairagi sect established over a century back. There are asthals subordinate to the principal one at Turki located in different districts of Bihar. Devolution of the Mahantship has always been from a Guru to his Chela. Defendant No. 2 executed a deed dated December 17, 1951 numberinating the first defendant as Ms successor to the Mahantship and a second deed on September 15, 1952 surrendering his right to the Mahantship in favour of the first defendant with, immediate effect. The suit of the appellant was launched in 1959 for a declaration that he himself was the duly installed Mahant of saddar asthal Turki in the circumstances mentioned in the plaint, that the second defendant had ceased to be the Mahant by his, voluntary of retirement and the first defendant being a junior Chela companyld have numberright or Claim to the Mahants. As a companyollary to the above declaration, he also asked for a decree for recovery of possession of all the properties of the asthal including those which had been purported to be transferred by the first two defendants. The appellant made a two-fold claim in his plaint. It was his case that under the tenets and the customs of the asthal and Bhagataha sect of Kabirpanthies, the devolution of the office of Mahantship is always from a Guru to the senior celebate Chela ,either, on the death of. the Mahant for the time being or by the said Mahant numberinating. his successor by deed and himself retiring from the Mahantship In either case, after the death or retirement of the Mahant for the time being, the senior chela succeeds to the Mahantship and is duly installed on the Gaddi after the perfomance of Bhandara in an assemblage of Mahants and sadhus of the sect and respectable persons of the locality at which The Chaddar of Mahanthi is bestowed on the new Mahant by the Mahant of Acharya Math Dhanauti in the District of Saran. The deeds of 1951. and 1952 being in violation of the ancient custom of the asthal, the first defendant was never of the as or became the Mahant of Turki number was any Chaddar ceremony 1007 performed at any requisite ceremony in recognition of such succession. The appellant had filed a suit in the companyrt of the Subordinate Judge at Muzaffarpur in the year 1953 for declaration of his riots and for setting aside the deeds of 1951 and 1952. After the suit was pending for some time,, a companypromise was arrived at whereby it was agreed that the appellant should assume the office of Mahantship and take possession of all the properties of the Math. The appellant put his signature on a sheet of blank paper for recording the terms of settlement. He had actually assumed the office of the Mahant of Turki in April 1954, and an elaborate ceremony was performed on the 16th February 1956. whereat he was installed. as the Mahant of Turki and given the Chaddar of Mahanti by the Acharya of Dhanauti before a big gathering. A document known as the Surat Hall was prepared regarding the plaintiffs installation. This bore the signature, of innumerable persons. This was followed by his taking, charge of all the properties of the saddar and subordinate asthals. The first two defendants thereafter dispossessed him and being unsuccessful in proceedings under the Code of Criminal Procedure for securing possession of the math and its properties, he was companypelled to file the suit. Respondents 1 And 2 filed a joint written statement. They pleaded that the custom and usages of the Turki Math relating to devolution of Mahantship was for the Mahant for the time being numberinating a fit and proper person as his successor from amongst his Chelas irrespective of his seniority and the person so numberinated invariably became the Mahant on the demise or retirement of the incumbent Mahant. A ceremony of installation of the new Mahant on the Gaddi and the bestowing of a Chaddar on him were number essential for establishing his title to this office in place of the retiring or the deceasing Mahant. The defendants denied the factum of the installation of the appellant relied on in the plaint. According to them the appellant had at all times knowledge of the numberination of the first defendant by the deed of December 17, 1951 and his appointment with immediate effect by the, deed of September 15, 1952. It was on realisation of the weakness of his case that he had approached the defendants for a companypromise agreeing, to given up his claim in the suit of 1953. He had appended his signature to the petition of companypromise in that suit being fully companyversant with the terms thereof. The two main issues framed by the trial companyrt and relevant for the disposal of this appeal bear on the custom governing the succession to the Mahantship of the Turki Math and the right of the incumbent mahant to numberinate a junior Chela in preference to a senior Chela. Issues were also framed by the trial companyrt as to whether an installation ceremony was an essential pre-requisite 1008 to a Mahants lawfully functioning as such and whether the plaintiff had factually been installed as a Mahant of the Turki Math. The findings of the trial companyrt were as follows From 1899 onwards only senior Chelas had succeeded their Gurus. According to the custom of the Muth the Mahant had the right to numberinate his successor and the choice rested upon the senior Chela unless he suffered from any disqualification or was found to be unfit for the office. The right of numberination was number absolute but was subject to the approval of others. An installation ceremony was number essential to companyplete the title of the Mahant. Such a ceremony had been performed in the ease of the plaintiff in 1956 and he became the Mahant of Turki although number in possession of the properties thereof at the ,time of the suit. The High Court rejected the custom as to succession set up by the plaintiff. It found- Since the time of the founder, Chaturbhuj Gosala, six Mahants had occupied the office of whom three were described as junior Chelas by some of the witnesses on the defendants side. The evidence did number establish that there was an invariable custom of the senior Chela being numberinated by the outgoing Mahant. The Mahant in office had an undoubted right to numberinate his successor and ordinarily the right of appointment was exercised in favour of the senior Chela but the choice was exercised in favour of a celebrate chela taking into account his all round ability and character. The second defendant had as a matter of fact numberinated one Ganesh Bhagat as his successor even before the deed of numberination of 1951 in favour of the first defendant. This numberination of Ganesh Bhagat was cancelled as he was found to be unfit. Compared to the plaintiff, the first defendant was decidedly superior in learning, ability and companyduct as the main function of the Mahant was to propagate the Kabirpanthi cult and the maintenance of a peaceful and harmonious atmosphere in the mutt where people were expected to companygregate for religious discussion and discourses and other benevolent functions the choiceof the, first defendant by the second defendant in preference to the plaintiff was number undeserved and must be taken as final. The High Court did number examine the question as to whether an installation ceremony was necessary to perfect the title of Mahantship in view of the companycession by companynsel for the plaintiff Differing from the finding of the trial companyrt, the High Court held that numberceremony of installation of the plaintiff had been performed in 1956 as alleged in the plaint. 1009 The deeds of numberination and surrender in 1951 and 1952 by the first defendant were valid and binding. The general law as to succession to Mahantship is number well settled by innumerable decisions of the Judicial Committee of the Privy Council and some decisions of this Court. It will be enough to quote some passages from Mukharjis book on the Hindu Law of Religious and Charitable Trusts. The learned author states third edition, p. 257 Once a Mutt is established, succession to headship takes place within the spiritual family according to the usages that grow up in a particular institution. The, primary purpose of a Mutt is to encourage and foster spiritual learning by maintenance of a companypetent line of teachers who impart religious instructions to the disciples and followers of the Mutt and try to strengthen the doctrines of the particular school or order of which they profess to be adherents. At page 269 In a Mutt it is the custom or practice of a particular institution which determines as to how a successor is to be appointed. Three aspects have to be borne in mind in companynection with the question of succession to the office of a Mahant p. 269 The first is that if the grantor has laid down any particular rule of succession, that is to be given effect to. Secondly, in the absence of any grant the usage of the particular institution is to be followed and in the third place, the party who lays claim to the office of a Mohunt on the strength of any such usage must establish it affirmatively by proper legal evidence. The fact that the defendant is a trespasser would number entitle the plaintiff to succeed even though he be a disciple of the last Mohunt, unless he succeeds in proving, particular usage under which succession takes place in the particular institution. At p. 270 Generally speaking, the Mutts are divided into three classes according to the different ways in which the heads or superiors are appointed. These, three descriptions of Mutts are Mourasi, Panchayati and Hakimi. In the first, the office of the Mohunt is hereditary and devolves upon the chief disciple of the existing Mohunt 1010 who moreover usually numberinates him as his successor in the second, the office is elective, the presiding Mohunt being selected by an assembly of Mohunts. In the third, the appointment of the presiding Mohunt is vested in the ruling power or in the party who has endowed the temple In a Mourasi Mutt the chela or disciple of the last Mohunt succeeds to the office when there are more, chelas than one the eldest generally succeeds, but a junior chela may succeed if he is found more capable and if he is selected by the last Mohunt is his successor In various institutions the custom is that in order to entitle a chela to succeed, be must be appointed or numberinated by the reigning Mohunt during his life time or shortly before his death and this may be done either by a written declaration or some sort of testamentary document. In other cases again, the numberinee is formally installed in the office and some sort of recognition is accorded to him by the members of the particular sect either during the life time of the last Mohunt or when the funeral ceremonies of the latter are performed. At p. 273. When the Mohunt has the right to appoint his successor, he may exercise the right by an act inter vivos or by will. At p. 274 In a Mourashi Mutt it is possible for the Mohunt to make over the endowment during his life time to his chela whom he appoints as a successor. At p. 275 In many cases when a successor is appointed by Mohunt, he is installed in office with certain ceremonies,This cannot be deemed to be essential. Admittedly Turki was a Mourasi Mutt The evidence as to custom adduced in the case Is both documentary and oral. The oral evidence which will be numbered hereafter is discrepant and mostly of persons who were number disinterested. The documentary evidence undoubtedly furnishes more reliable testimony being ante item motam and brought into existance at a time when the plaintiff was number on the scene and when numberdispute as to succession to ship was raging. 1011 The earliest document exhibited in this case is that of 1899 executed by Mahant Lal Bahadur Bhagat in favour of Ram Bhagat describing him as the senior chela, able, clever, literate and by all means tit for the Mahantship. Mahant Ram Bhagat in his turn numberinated Mahadeo Bhagat as his successor by a deed of November 1910. Like the document of 1899 this deed also describes the numberinee as able, clever and fit to discharge the duties of the Mahant Mahadeo Bhaaat however is number described as the senior Chela but only as a disciple of the executant. By a deed of August 1937 Mahant Mahadeo Bhagat numberinated Narsingh Bhagat, defendant No. 2 as his successor describing the latter as his only disciple worthy, clever and fit in all respects for the Gaddi. By a document of June 1947 Narsingh Bhagat numberinated one Ganesh Bhagat as his successor to the Gaddi. This numberination was cancelled by Narsingh Bhagat on the ground of unfitness of the numberinee for the office but mention is made in this docu- ment of 1947 of the practice and custom relating to the succession to the office of the Mahant. This document goes against the companytention of the plaintiff that by custom the senior Chela was eligible to the office in preference to all others. It recites It has been the practice in the Asthal from the time of my predecessors that the Gadinashin leads a life of Brahmacharya and he does number marry. One Mahanth Gadinashin appoints and numberinates his able Brahmachari disciple as Gadinashin and future successor during his lifetime. After the death of his Guru, the rightful disciple becomes heir and Gadinashin of the Asthal of the Sadar Nath at Turki. I the executant thought it proper to make over the management of the property under a will, according to previous custom and appoint Ganesh Bhagat as my successor. This was followed by a description of the numberinee as literate, able and efficient. The document of December 1951 by Narsingh Bhagat in favour of Girija Nandan Bhagat. the first defendant. describes the numberinee as fit and qualified in all respects to be the Mahant and recites the custom as in the case of Ganesh Bhagat. The trial Judges view that the numberinations if 1899, 1910 and 1937 being invariably in favour of the senior disciple went a long way to establish the custom relied on by the plaintiff was number accepted by the High Court. Apparently the trial Judge was of the view that Mahadeo Bliagat who became the Mahant in 1910 was the only disciple of Ram Bhagat and it was therefore number felt necessary to mention him is the senior chela Quite a number of defendants witnesses made statements to the effect that Ran-. Bhagat had a number of Chelas. The trial Judge obviously over- locked the statement of the plaintiff in his cross examination that 1012 Ram Gossai had 5 or 6 Chelas and he himself had seen all of them. A fairly large number of witnesses stated that the qualifications for a persons numberination to the Mahantship did number depend only on seniority but on ability to manage, celibacy, adherence to religious principles and a habit of serving sadhus, fakirs and visitors besides a good moral character. Some even suggested that it was the ablest Chela who was made the Mahant. Making due allowance for the witnesses who came to support the case of the party examining them, the oral testimony unquestionably leads us to hold that in the matter of numberination of a successor to the Mahantship seniority was number the decisive factor but that ability and efficiency in management companypled with a good moral character and adherence to the religious rites practised at the mutt and a spirit of service to sadhus etc. all entered into companysideration in the selection of a successor by a Mahant. This companyclusion is fortified by the documents exhibited. As already numbered they do number support the plaintiffs version that invariably the senior Chela was selected. In our view the document executed by Narsingh Bhagat in favour of Ganesh Bhagat sets out the custom as to succession fairly accurately. The argument advanced on behalf of the appellant that the plaintiff was installed as the Mahant of Turki in 1956 before a wide gathering of sadhus and respectable persons at which the Chaddar ceremony was performed does number merit any elaborate or serious companysideration. As numbered already, the trial, companyrt did number take the view that the performance of the Chaddar ceremony was an essential pre-requisite to a person becoming a Mahant and before the High Court companynsel for the plaintiff expressly gave up that point. Although the trial companyrt found in favour of the plaintiff that such a ceremony had actually been performed, the High Court came to a different companyclusion. One of the reasons which prompted the High Court to take this view was that the document evidencing the installation ceremony styled the Surat Hall had number been produced in any companyrt of law before the institution of the suit of 1959 although litigation in respect of the properties of the mutt and the plaintiffs right to possession were being canvassed before ,courts of law. The High Court also relied on the fact that a res- pectable and reliable witness like the Mahant of the Acharya Mutt denied having signed this document Ex. 1 and numberattempt was made on behalf of the plaintiff to companytrovert the said denial by examination of a hand-writing expert. Reliance was also placed by the High Court on the fact that the plaintiff who filed a petition under ss. 107 and 145 Cr. C. against the first defendant and 12 others on 8th December, 1956 described himself as the Mahant of Chanwa Math and made numberreference in the petition itself to the installation ceremony at Turki. The High Court also ,did number believe the plaintiffs version that he had signed a blank 1013 sheet of paper to be used as a companypromise petition in the earlier suit filed by him and numberhing has been shown to us as to why we should take a different-view. In the result we hold that the plaintiff was unable to discharge the onus which lay on him to substantiate the custom as to succession pleaded in his plaint. He also failed to establish that he had in fact been installed as the Mahant of the said Math.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1706 of 1971. Appeal by special leave from the judgment and order dated January 5, 1971 of the Kerala High Court in Civil Writ Appeal No. 534 of 1969. H. Dhebar, for the appellants. S. R. Chart, A. K. Gupta, S. C. Agarwal and V. J. Francis, for the respondent. The Judgment of the Court was delivered by Mtter, J. The only question involved in this appeal is, whether the order dated September 25, 1968 terminating the services of the respondent, a temporary Government servant, was in accordance with the provisions of Rule 5 of the Central Service Temporary Service Rules 1965, hereinafter referred to as the Rules. The services of the respondent appear to have been terminated on the basis of the directive companytained in a circular dated 12th September 1968 that action should be taken against every employee who absented himself from duty on 19th September, 1968. No companytention was raised at any stage that numberaction companyld be taken under Rule, 5. This said rule reads - Termination of temporary service,- 1 a The services of a temporary Government servantwho is number in quasi- permanent service shall be liable to termination at any time by a numberice in writing given either by the Government servant to the appointing authority or by the appointing authority to the Government servant b the period of such numberice shall be one month Provided that the services of any such Government servant may be terminated forthwith by payment to him of a sum equivalent to the amount of his pay plus allowances for the period of the numberice at the same rates at which he was drawing them immediately before the termination of his services, or, as the case may be, for the period by which such numberice falls short of one month. xx xx xx xx. It is admitted that payment of the salary and allowances was number made to the respondent on 25th September, 1968. According to, the respondent the disbursing officer was intimated about the order of termination only on the 28th September when he was supplied with the, necessary funds. As against this it was alleged in the companynter affidavit to the writ petition filed by the respondent in the High Court that one months pay and allowances had been sent by money order to the respondent. The question is, whether the order of termination of service can be sustained because of absence of payment on the 25th September. The order was quashed by a learned single Judge of the High Court and this was upheld by a Division Bench in appeal. Apart from the authorities which were cited at the Bar, it appears to us that the rule is capable of the only interpretation that the order of termination can be upheld if the requisite amount in terms of the rule was paid into the hands of the employee of made available to him at the same time as he was served with the order. Rule, 5 1 a gives the Government as well as the employee a right to put an end to the service by a numberice in writing. Under rule 1 b the period prescribed for such numberice is one month. The proviso to sub-r. b however gives the Government an additional right in that it gives an option to the Government number to retain the services of the employee till the expiry of the period of the numberice if it so chooses to terminate the service at any time it can do so forthwith by payment to him of a sum equivalent to the amount of his pay plus allowances for the period of the numberice at the same rate at which he was drawing them immediately before the termination of his services, or, as the case may be, for the period by which such numberice falls short of one month. At the risk of repetition, we may numbere that the operative words of the proviso are the services of any such Government servant may be terminated forthwith by payment. To put the matter in a nutshell, to be effective the termination of service has to be simultaneous with the payment to the employee of whatever is due to him. We need number pause to companysider the question as to what would be the effect if there was a bonafide mistake as to the amount which is to be paid. The rule does number lend itself to the interpretation that the termination of service becomes effective as soon as the order is served on the Government servant irrespective of the question as to when the payment due to him is to be made. If that was the intention of the framers of the rule, the proviso would have been differently worded. As has often been said that if the precise words used are plain and unambiguous, we are bound to companystrue them in their ordinary sense and number to limit plain words in an Act of Parliament by companysiderations of policy, if it be policy, as to which minds may differ and as to which decisions. may vary.-see Craies on Statute Law, Sixth Edition, pages 86 and 92. It is number for us to enter into a discussion as to why the proviso was framed as we find it. It was argued that it would, in the ordinary companyrse of things, be almost impossible for the authorities to give effect to the proviso if payment has to be made at the time the order of termination is served on the employee. It was submitted that before any payment can be made by Government, sanction has to be taken and some time must elapse before the necessary procedure is companyplied with and money obtained either from the treasury or a cheque made out to companyer the amount due to the employee. It was also argued that if the companystruction given by the High Court to the rule is to be maintained, the appointing authority companyld never ask, the employee to go at once even when it found that it was necessary in the interest of Government to require him to do so. It is difficult to companytemplate a case in which an appointing authority has to make up his mind on the spur of the moment that a particular employee should be asked to go immediately. Normally a Government employee is number asked to go unless some companyplaint is made against him for some irregularities detected in his work. This is always followed by some enquiry into his companyduct, however brief, as it is only as a result of an enquiry that the authority makes up its mind that it would number be in public interest to retain the service of the employee any longer. Within the time which is taken for such deliberation i.e., the preliminary enquiry, direction can certainly be given that the pay and allowances of the government servant companycerned should be calculated so that it companyld be offered to the employee at the time when the order of termination is served on him. There can be numberdifficulty in the calculation because the payment is to be made at the same rates at which he was drawing them immediately before the termination of his services. It was suggested on behalf of the respondent that the company- struction of the rule should be such as would mitigate the rigour of an order of termination inasmuch as where numberice of a full month is given the Government servant knows that he will have to find some other employment without delay and he can make his arrangements accordingly but if he is to be asked to leave at once and to depend on the mercy of the Government as to when it will pay him for the period of the numberice, it would be very hard on the employee. We do, number think it necessary to express any view as to whether the rule was so framed on account of any such reason and we must give effect to the plain meaning of the words of the rule. Our attention was drawn to a decision of this Court which had been cited on behalf of the appellant in the High Court- The state of uttar Pradesh v. Dinanath Rai 1 There the rule was differently worded. The rule in that case ran as follows In exercise of the powers companyferred by the proviso to Article 309 of the Constitution of India, the Governor of U.P. is pleased to make the following general rule Civil Appeal No. 1734 of 1968 dated 11th October, 1968. regulating the termination of services of temporary Government servants Notwithstanding anything to the companytrary in any existing rules and orders on the subject, the services of a Government servant in temporary service shall be liable to termination at any time by numberice in writing given either by the Government servant to the appointing authority, or by the appointing authority to the Government servant. The period of such numberice shall be one month given either by the appointing authority to the Government servant, or by the Government servant to the appointing authority, provided that in the case of numberice of the appointing authority the latter may substitute for the whole or part of this period of numberice pay in lieu thereof provided further that it shall be open to the appointing authority to relieve a Government servant without any numberice or accept numberice for a shorter period, without requiring the Government servant to pay any penalty in lieu of numberice. In that case this Court had observed The rule does number say that the pay should be given in cash or by cheque at the time the numberice is issued. Knowing the way the Governments are run, it would be difficult to ascribe this intention to the rule-making authority. There is numberdoubt that the Government servant would be entitled to the pay in lieu of numberice but this would be in the ordinary companyrse. No doubt the language of that rule is somewhat similar to the words of rule 5 but there is an essential difference. The rule only means that the pay for 30 days or less may be substituted for service for the period of the numberice. In other words, the rule entities the employee to pay for the period of the numberice only without laying down any companydition as to when the payment is to be. given. In this case, as we have already numbered, termination forthwith is to be by payment to the Government servant of the sum mentioned. Payment is a companydition of the termination of service forthwith.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 565 and 1470 to 1474 of 1970. Appeals from the judgment and order dated November 7, 1969 of the Patna High Court in Civil Writ Jurisdiction Cases Nos. 853, 854 and 877 to 880 of 1968. Basudeo Prasad, R. B. Datar and S. N. Prasad, for the appel- lants in all the appeals . Lal Narain Sinha, Advocate-General for the State of Bihar, K. Daphtary and U. P. Singh, for respondent No. 4 in A. No. 565 of 1970 , respondent No. 2 in C.A. No. 1473 of 1970 and respondent No. 3 in C.As. Nos. 1470 to 1472 and 1474 of 1970 . C. Chagla, Gobind Das and S. P. Nayar, for respondent No. 3 in C.As. Nos. 565 and 1473 of 1970 and respondent No. 2 in C.As. Nos. 1470 to 1472 and 1474, 1970 . K. Daphtary, S. C. Agarwal, R. K. Garg and V. J. Francis, for respondent No. 1 in C.A. No. 1470 of 1970 . C. Agarwal, R. K. Garg and V. J.-Francis for respondents Nos. 1 and 2 in C.A. No. 565 of 1970 and respondent No. 1 in C.As. Nos. 1471 to 1474 of 1970 . The Judgment of the Court was delivered by Ray, L-These six appeals are by certificate from the judg- ment dated 7 November, 1969 of the High Court at Patna quashing the order of the Government of India dated 20 September, 1967, and directing that the respondents must companytinue to hold rank as assigned to them in 1958. The appellants and the respondents are number members of the Indian Administrative Service. For the sake of brevity the appellants can be described as direct recruits and the respondents as promotees. The direct recruits were appointed to the Indian Administrative Service in the years 1949 and 1950 as a result of companypetitive examination held for recruitment of candidates to that Service. The promotees were initially recruited to the executive branch of the Bihar State Civil Service and were subsequently in the years 1955 and 1956 promoted to the Indian Administrative Service. The companytroversy in the present appeals is as to the seniority between the direct recruits and the promotees under the Indian Administrative Service Regulation of Seniority Rules, 1954. The Government of India on 3 September, 1958 allotted to the promotees the year 1948 and placed them below the junior most amongst the direct recruits of the 1948 allotment. The direct recruits thereafter made representation against the decision of the Government of India. Eventually, on 13 January, 1965 the State of Bihar forwarded the. representation of the direct recruits to the Government of India against the decision made by the Government of India in the year 1958. On 4 January. 1966 the Government of India took a tentative decision to allow the representation of the direct recruits on the ground that the previous decision was on wrong facts and on wrong interpretation. On 14 April, 1967 the State of Bihar represented to the Government of India to reject the representation of the direct recruits on the ground that the facts alleged by the direct recruits were wrong. On 20 September, 1967 the Government of India however allowed the representation of the direct recruits and revised the seniority of the promotees and allotted to some of the promotees the year 1950 and to some of the promotees the year 1952 as mentioned in the letter of the Government of India dated 20 September, 1967 set out hereunder- The matter was further examined in companysultation with the Ministry of, Law,, who have reiterated their earlier advice and said that rule 2 g of the Indian Administrative Service Regulation of Seniority Rules, 1954 does number permit retroactive declaration of a post equivalent to a senior post of the I.A.S. The declaration made by the State Government in the present case cannot have retrospective operation. It will have prospective operation. The Government of India have therefore decided to revise the seniority of the officers companycerned. It will appear from the attached statement that the relevant dates for the purposes of fixation of Seniority will be 26 December, 1955 in the case of Shri S. C. Mishra, S. A. F. Abbas, R. S. Mandal, S. K. Sinha and S. K. Chakravarty 1 February, 1956 in the case of Shri S. Sahay and 17 October, 1956 in the case of S Shri Ramanand Sinha, Anwar Karim, R. C. Sinha, S. K. Ghosh and M. Alam. As Shri M. K. Mukherjee the seniormost regular recruit of 1950 batch started officiating companytinuously in senior posts with effect from 2 May, 1955 a date earlier than the relevant dates of S Shri S. C. Mishra, A. F. Abbas, R. S. Mandal, S. K. Sinha, S. K. Chakravarty, N. P. Sinha and S. Sahay, these ,officers may be re-allotted to the year 1950 and may be placed before Shri S. D. Prasad RR-1950 and above Shri P. S. Appu RR-1951 . Shri N. Nagamani, the seniormost regular recruit of 1952 batch started officiating companytinuously in senior posts earlier than the relevant dates of S Shri Ramanand Sinha, Anwar Karim, R. C. Sinha, S. K. Ghosh, and M. Alam. These officers may be allotted to the year 1952 and may be placed below Shri K. I K. Srivastava RR-1952 and above Shri R. B. Lal SCS7SR-1952 . The promotees impeached the Government of India Memorandum dated 20 September, 1967 principally on the ground that the Government of India-was wrong in holding that it was number companypetent to the State of Bihar to make a retrospective declaration of a post as equivalent to a cadre post. The promotees succeeded in the High Court. The High Court quashed the order dated 20 September, 1967 and directed that the promotees would companytinue to hold the year of allotment assigned to them in the year 1958. The Indian Administrative Service Regulation of Seniority Rules, 1954 formed the bone of companytention between the direct recruits and the promotees. In order to appreciate the rival companytentions reference may be made to the origin of the Indian Administrative Service and the relevant rules and regulations in that behalf. The origin of the Indian Administrative Service is to be found in the Memorandum of Agreement dated 21 October, 1946 between the Government of India and the Government of the then Provinces. The Indian Administrative Service came to be companystituted under the Agreement with effect from 21 October, 1946. Recruitment to the Indian Administrative Service was to be by direct recruitment or by promotion of members of a Provincial Civil Service. The Indian Civil Administrative Cadre Rules, 1950 specified in the Schedule thereto for each Province the strength of the cadre and the number and character of the posts. In 1951 the All-India Services Act came into existence. The All-India Service was defined to mean the Indian Administrative Service or the Service known as the, Indian Police, Service. Later on section 2 a was introduced into the 1951 Act to include certain other. specified Services as All India Services. Section 3 of the All-India Services Act, 1951 companyferred power on the Central Government after companysultation with the Governments of the States companycerned to make rules for the regulation of recruitment and the companyditions of service of persons appointed to All-India Service. That is how the Indian Administrative Service Cadre Rules, 1954 came into existence repealing the Indian Civil Administrative Cadre Rules, 1950. So did the Indian Administrative Service Recruitment Rules, 1954 and the Indian Administrative Service Regulation of Seniority Rules, 1954. Two other Regulations which are material for the purposes of the present appeals are the Indian Administrative Service Appointment by Promotion Regulations, 1955 and the Indian Administrative Service Fixation of Cadre Strength Regulations, 1955. The Promotion Regulations, 1955 were in exercise of the rule making power under rule 8 of the Indian Administrative Service Recruitment Rules, 1954. The Fixation of Cadre Strength Regulations, 1955 were made in exercise of the rule making power companyferred on the Central Government by rule 4 of the Indian Administrative Service Cadre Rules. The 1954 Cadre Rules defined cadre post to mean any of the posts specified in item I of the Schedule to the Indian Administrative Service Fixation of Cadre Strength Regulations. The Cadre Strength Regulations, 1955 set out the strength and the companyposition of the cadre in relation to the different States including Bihar. For the State of Bihar there are 8 items. The first item relates to senior posts under the State Government which are 103 in number and item 2 relates to senior posits under the Central Government which are 41 in number. Of these 144 posts 36 are to be filled by promotion and selection in accordance with rule 8 of the Recruitment Rules, 1954. The other 108 posts are to be filled by direct recruitment. Items 5, 6, 7 and 8 in the Bihar Cadre Strength relate, to other posts with which the present appeals are number companycerned. Of the total authorized strength of 211 cadre posts in the State of Bihar 175 are direct recruitment posts and 36 are promotion posts. The Regulation of Seniority Rules, 1954 defines senior post meaning a post included and specified under item 1 of the cadre of each State in the Schedule to the Fixation of Cadre Strength Regulations, 1955. The 1954 Recruitment Rules speak of recruitment to the Service inter alia a by a companypetitive examination, and b by promotion. The other two modes of recruitment by selection from emergency companymissioned officers and from persons who hold any substantive capacity gazetted post and who are number members of the State Civil Service are number relevant for the purpose of the present appeals. Rule 7 of the Recruitment Rules, 1954 relates to recruitment by companypetitive examination and rule 8 relates to recruitment by promotion or selection. The Promotion Regulations, 1955 prescribed the companyditions of eligibility for promotion. In the background of these Rules and Regulations it follows that members of a State Civil Service are promoted to the Indian Administrative Service. The present appeals relate to promotees after the abovementioned Rules and Regulations came into existence. The question of seniority of promotees vis-a-vis direct recruits is companyered by rule 3 3 b of the Indian Administrative Service Regulation of Seniority Rules, 1954 which is set out hereunder- The year of allotment of an officer appointed to the Service after the companymencement of these rules, shall be - b where the officer is appointed, to the Service by promotion in accordance with sub- rule 1 of rule 8 of the Recruitment Rules, the year of allotment of the junior-most among the officers recruited to the Service in accordance with rule 7 of these rules who officiated companytinuously in a senior post from a date earlier than the date of companymencement of such officiating by the former Provided that the year of allotment of an officer appointed to the Service in accordance with sub-rule, 1 of rule 8 of the Recruitment Rules who started officiating companytinuously in a senior post from a date earlier than the date on which any of the officers recruited to the service in accordance with rule 7 of those rules so started officiating, shall be determined ad hoc by the Central Government in companysultation with the State Government companycerned. Provided further that an officer appointed to the Service, after the companymencement of these rules in accordance with sub-rule 1 of rule 8 of the Recruitment Rules shall be deemed to have officiated companytinuously in a senior post prior to,the date of the inclusion of his name in the Select List prepared in accordance with the requirements of the, Indian Administrative Service Appointment by Promotion Regulations framed under sub-rule 1 of rule 8 of the Recruitment Rules, if the period of such officiation prior to that date is approved by the Central Government in companysultation with the Commission. There are two explanations which need number be set out because. they are number relevant for the purposes of the present appeals. The, scheme of the Indian Administrative Service Regulation of Seniority Rules, 1954 is that every officer shall be assigned a year of allotment in accordance with the provisions companytained therein. The present appeals raise the question of the year of allotment of the promotees who were promoted to the Service, after the companymencement of the Rules, in the years 1955 and 1956. Therefore, rule 3 3 b applies to the case of the promotees vis-avis the direct recruits. The Indian Police Service, Regulation of Seniority Rules, 1954 is the companynter-part of the Indian Administrative Service Regulation of Seniority Rules, 1954. Rule 3 3 b of the Indian Police, Service Regulation of Seniority Rules is in identical language with rule3 3 b of the Indian Administrative Service Regulation of Seniority Rules. Rule 3 3 b, of the Indian Police Service Regulation of Seniority Rules came up for companysideration before this Court in two cases. These are the decisions in R. Nim, I.P.S. v. Union of India 1 and State of Orissa Anr. v. B. K. Mohapatra 2 . Rule 3 3 b which is in companymon language the Rules of both the Services and the two provisos lay down the mode of regulation of seniority of the promotees vis-a-vis the direct recruits. Promotees will be given the year of allotment of the junior-most among direct recruits who officiated in a senior post from a date earlier than the date of companymencement of such officiation by a promotee. The first proviso regulates the seniority between direct recruits and promotees who started officiating company- tinuously in a senior post from a date earlier than the date on which the direct recruits so started officiating by prescribing the mode of regulation of seniority by ad hoc determination by the Central Government in companysultation with the State Government. 1 1967 2 S.C.R. 325. 2 1970 1 S.C.R. 255. The effect of the second. proviso was stated by this Court in Nims 1 caw to be this The second proviso limits the- operation of the first proviso by dividing the officiating period into two classes first, a period before the date of inclusion- of an officer in the Select List and, secondly, the period after that date. The first period can only be companynted if such period is approved by the Central Government in companysultation with the Union Public Service Commission. The rulings of this Court hold that a promotee can obtain the advantage of officiation companytinuously in a senior post prior to the inclusion of the name in, the Select List if the period of such officiation is approved by the Central Government in companysultation with the Union. Public Service Commission. The officiation in a senior post is one of the indispensable ingredients in the application of rule 3 3 b . A senior post-as defined in the Regulation of Seniority Rules means a post included and specified under item 1 of the cadre of the State or any post declared equivalent thereto by the State Government companycerned. It may be stated here that the definition of. senior post underwent change in the year 1967 by numberification No. 27/47/64-AIS III -A dated 17 April, 1967 and the new definition of senior post came into effect on 22 April, 1967. The present appeals are governed by the definition of senior post prior to the year 1967. The important words in the relevant definition of the senior post are any post declared equivalent thereto by the State Government. The memorandum dated 20 September, 1967 was impeached by the promotees on the, ground that the State Government companyld number make a retrospective declaration with regard to making posts equivalent to senior posts. Counsel on behalf, of direct recruits companytended that the letter dated 9 April, 1958, from the Chief Secretary to the Government of Bihar to the Secretary to the Government of India, Ministry of Home Affairs,could number amount to a declaration of posts as equivalent to senior, posts and further that there companyld number be any retrospective declaration of making posts equivalent to senior posts. Council on behalf of the Union of companytended that the declaration companytemplated with regard to senior post must be a formal and it was number, open to the State to, make, a retroactive declaration because the rule companytemplated approval of such officiation in companysultation with the Commission. other words, it was said that the State, would first have to make. a declaration with regard to making posts equivalent to senior posts and. thereafter approval of such to officiation would be given by the State Government in companysultation with the public service Commission. Criticism was made- by companynsel for the direct recruits that there was numberproper Select List and Raos letter dated 9 July, 1958 and 1 19702 S.C.R 325. the reply thereto dated 3 September, 1958 by the Deputy Secretary to the Government of India were companytended number to amount to approval by the Central,Government in companysultation with the Union Public Service Commission of the period of officiation prior to the date of inclusion of the names of promotees in the Select List. There was an ad hoc list in the year 1954 and the ad hoc list is referred to in the Chief Secretarys letter with the letter A. The select list was prepared in the year 1955 and is referred to in the Chief Secretarys letter with the letter B. In the Chief Secretarys letter the date of officiation of the promotees was proposed by the State Government to be 28 December, 1954. The date of officiation in the senior scale by the promotees as agreed to by the Government of India was shown in that letter as some time in the month of October, 1955 with regard to three promotees and in the month of December, 1955 with regard to the fourth promotee. With regard to the other three promotees numberdate was shown as having been agreed to by the Government of India. The State Government proposed with regard to some of the promotees that they should be allowed the benefit of officiation from the time of the inclusion of their names, in the ad hoc list in the year 1954. The Deputy Secretary to the Government of India by letter dated 3 September, 1958 accepted the recommendation of the State Government with regard to the promotees and allotted to them the year 1948 and placed the promotees below Shri B. S. Srivastava who was the junior most among direct recruits- who had started officiating companytinuously in a senior post earlier than 28 December, 1954. The impeached circular dated 20 September, 1967 did number allow retrospective declaration of equivalent posts and therefore the year of allotment was numberlonger 1948. The High Court held that there companyld be retrospective declaration and thus in effect restored 1948 as the year of allotment. The Government of India by the letter dated 20 September, 1967 which is impeached by the promotees changed the year of allotment of the promotees from 1948 to 1950 with regard to the first three promotees and to the year 1951 with regard to the fourth promotee and the year 1952 with regard to the other two promotees and placed these promotees below the direct recruits of those batches who started officiating companytinuously in a senior post earlier than the date of such officiation by the promotees. On these materials it appears that the ad hoc list was prepared with the approval of the Union Public Service Commission on 28 December, 1954 and the Select List was finally approved by the, Union Public Service Commission on 26 December, 1955. The select list was the list prepared for appointment of the promotees by promotion to the Indian Administrative Service. Rule 3 3 b of the Regulation of Seniority Rules, 1954 speaks of approval by the Central Government, in companysultation with the Union Public Service Commission of the period of officiation prior to the date of the inclusion of the names of the promotees in the select list. This approval as companytemplated in rule 3 3 b is a specific approval and is directed to the particular matter mentioned therein as to whether there is approval of the period of officiation prior to the inclusion of the names in the select list. On the materials in the present appeals we are unable to hold that the Central Government gave any approval in companysultation with the Union Public, Service Commission within the meaning of rule 3 3 b so as to enable the promotees the benefit of the period of officiation prior to the date of the inclusion of their names in the select list. The companytention on behalf of the direct recruits that it is number open to the State to make a retrospective declaration with regard to posts being made equivalent to senior posts is unacceptable. From the point of view of workability of the rule as well as the circumstances and the companyditions of service it may number always be practicable to make such prospective declaration. It is only when the Government has found that it is necessary or desirable to declare such posts equivalent to senior posts that the Government will do so. That will be usually possible after the Government will have companysidered several factors, namely, finance, structure of the service, the personnel fit for undertaking the post. Normally, the promotees obtain promotion from the State Civil Service after long service. That is why rule 3 3 b of the Regulation of Seniority Rules is designed to arrive at a fair adjustment of the companypeting claims of the direct recruits and the promotees. To hold that a promotee companyld number get the benefit of officiation unless the post was declared as equivalent to a senior cadre post before the promotee was appointed to officiate might defeat the policy of the, Government. A promotee may be officiating companytinuously for a long period and his name may be included in the select list after some time. Again a person who officiates companytinuously for long time may thereafter be number included in the select list. Such a person might deprive a person who would otherwise be found suitable for appointment by promotion after similar officiation in a similar post. It is only when the State Government finds that it is desirable to declare the post equivalent to a senior post inter alia by reason of the efficiency of the person which has entitled him to promotion that the companysequential necessity arises for giving him that senior post by requisite declaration of a senior post. A retrospective declaration therefore is in the scheme of things practical as well as reasonable. The basic idea of declaration of post as equivalent to a senior post is that it is treated as a post of equal rank and responsibility. Rule 3 3 b is designed to strike a balance. between companyflicting claims. When a promotee with the background of a long companytinuous officiation gets promotion it is in the fitness of things that the period of such officiation is number lost to him. The necessary check is supplied by approval by the Central Government in companysultation with the Commission. There will be two sources charged with the responsibility of approval of the period of officiation prior to inclusion of, the name in the select list. A retrospective declaration that a post is equivalent to a senior post really amounts to declaration of an existing fact. It is that the Personwho has officiated companytinuously for a long time is allowed the benefit of a senior Post prior to the appointment by promotion of such officer to the Cadre of the Indian Administrative Service. Ordinarily, under Cadre Rules a number-cadre officer cannot hold a cadre post excepting for short time of three months and ifit is for a longer period number without approval by the Central Government. Therefore there is numberoccasion for declaration by the State Government of a number-cadre post as equivant to a cadre post. The question of declaration arises only for the purpose of giving the promotee the benefit of the period of officiation prior to promotion. The use of the word deemed in rule 3 3 b of the Regulation of Seniority Rules indicates that the Government has the power to make a retrospective declaration because it is only after promotion that there is any occasion to companysider whether the period of offication prior to promotion will be companynted for purposes of seniority. The harmonious companystruction of the definition of senior post occurring in the 1954 Cadre Rules along with rule 3 3 b of the Regulation of Seniority Rules is that promotee will by a legal fiction obtain advantage of the period of officiation first by the declaration and second by the approval of the Central Government in companysultation with the Union Public Service Commission. It is number the declaration but the approval which introduces the legal fiction. There is an apprehension that retrospective declaration might cause-mischief in the sense that it would enable a promotee to obtain seniority as against a direct recruit. The apprehension is unmerited because promotees obtain promotion after long service and that is why, the year of allotment of promotee is below the junior most among direct recruits who companytinuously officiated in a senior post from a date earlier than the date of companymencement of such officiation by the promotee. Again, there may be a salutary reason to defend a retrospective declaration because a pros- pective declaration by the State Government may number be acceptable to the Central Government by number giving approval of the period of officiation prior to the date of inclusion of the names in the, select list. There is numbertime limit fixed with regard to approval by the Central Government. Therefore, a retrospective declaration, will be under the check of approval by the Central Government and such approval will always act as a safety valve., against any abuse or mischief of retrospective declaration. It is important to numberice that the definition of Senior post has undergone change in the year 1967. The amendment of the definition has brushed away the necessity of any declaration by the Government of a post being made. equivalent to senior cadre, post. also deleted the second proviso to rule 3 3 b of the Regulation of Seniority Rules. In place of the second proviso a new explanation has been added. The explanation states that in respect of a promotee the period of companytinuous officiation in a senior post shall, for the purposes of determination of his seniority, companynt only from the date of the inclusion of his name in the Select List, or from the date of his officiating appointment to such senior post whichever is later. The declaration of a post to be equivalent to a senior post and the approval of the Government of India in companysultation with the Commission for allowing a promotee the benefit of the period of companytinuous officiation prior to the inclusion of his name in the Select List are all obsolete number. One of the reasons for the changes may be that a prospective declaration might give rise to show of preference or favour to some chosen persons who might number turn out to be suitable person to fill that post. Again, the disadvantage of prospective declaration may be that the Government might be saddled with the problem of a declaration in anticipation and later finding out the absence of necessity of such a post or even of number finding a suitable person for occupying such a post. The soundness of a retrospective declaration rests on the companysideration that number only will the promotee by that time have been tried and tested in that post but also his promotion would indicate the benefit of the period of companytinuous officiation which earned promotion for him. To deny a retrospective declaration would in the case of promotion of persons from State Civil Service deprive them of the opportunity of enjoyment of the period of officiation. For these reasons, we uphold the judgment of the High Court that the memorandum dated 20 September, 1967 which stated that the State Government companyld number retrospectively declare a post to be equivalent to a senior post was bad. The State Government has power to make such a retrospective declaration. The order dated 20 September, 1967 which also directed the years of allotment on the basis that there companyld number be any retrospective declaration of equivalent post cannot be sustained. The High Court however further directed that the promotees must companytinue to hold ranks as assigned to them in the year 1958 This order of the High Court is to be set aside, for the reason that the year of allotment will number have to be determined by the approval of the Central Government in companysultation with the Union Public Service Commission. The appeals are therefore dismissed in so far as they relate to quashing of the order of the Central Government dated 20 September, 1967. The appeals are allowed setting aside the order of the High Court that the promotees would companytinue to hold ranks as assigned to them in the year 1958.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1851 of 1967. Appeal by special leave from the award dated October 9, 1967 of the Labour Court, Bangalore in Reference No. 86 of 1966. P. Malhotra and D. N. Gupta, for the appellant. Kuppuswamy, in person, for respondent No. 2. The Judgment of the Court was delivered by Mitter, J. This is an appeal by special leave from an award of the Labour Court, Bangalore dated October 9, 1967 where the dispute referred for adjudication was, whether the Management of the Bangalore Woollen, Cotton and Silk Mills Ltd. here in after referred to as the Company was justified in terminating the services of five workmen including one Kuppuswamy?. During the companyrse of the proceedings the Binny Mills Labour Association, Bengal, a registered trade union, sponsoring the cause of the dismissed workmen entered into a settlement with the management whereby the management agreed to reinstate one Ramanadha and gave up its demand for reinstatement of three others excluding Kuppuswamy. The Union however withdrew its support to Kuppuswamy from the date of the settlement and the latter stated before the Labour Court that he would companyduct his own case. The facts relating to the dismissal of Kuppuswamy are as follows. He is alleged to have behaved in an insolent manner towards the Warehouse Master, his superior officer, on 3rd November, 1963 in respect whereof he was given a charge sheet on 6th November, 1963 the companyplaint against him being that he was guilty of misconduct falling under Standing Order No. 13 11 i.e. act subversive to discipline. He submitted a written explanation on 8th November. An enquiry was held by the Mill Manager on 10th November and on the same day the Mill Manager came to the companyclusion that the charge against Kuppuswamy had been proved and taking into account the gravity of the misconduct and his past companyduct the Mill Manager found him number a fit person to remain in the employment of the companypany and terminated his services. Before the Labour Court Kuppuswamy filed his statement of claim, the management its statement of objections followed by a rejoinder of Kuppuswamy. Kuppuswamy examined himself and one Shadgopalan was examined on behalf of the management. The records-of the domestic enquiry were marked in evidence by companymon companysent. The Labour Court while accepting the finding of the domestic tribunal that Kuppuswamy was guilty of the misconduct alleged against him was number inclined to retain the order of termination of his service mainly on the ground that he was number given an opportunity to challenge the statement of one Veeraraghavan regarding his past record of service number was he given any opportunity to say whether Veeraraghavans statement was true or false or reasonably explainable. According to the Tribunal the enquiry officer might have thought fit to pass this very order of termination, even without going into the past record of Kuppuswamy. But, the possibility of his awarding a lesser punishment also cannot be ruled out, altogether. We have therefore to examine what happened at the enquiry stage to ascertain whether the labour companyrt was right in acting in the manner it did. The charge against Kuppuswamy formulated by the manager was that on the 3rd of this month at about 9.15 a.m. Kuppuswamy had behaved in tan insolent manner towards the Warehouse Master, Mr. Veeraraghavan by shouting at him and creating a disorderly scene in the Warehouse office. The Manager reminded Kuppuswamy of his written explanation and asked him whether he had anything to add. Kuppuswamy stated that he, had stocked a number of pieces which had mounted, so high that he apprehended that the same might fall over and he therefore started stocking the pieces in between the pieces already mounted before the examiners. The Manager reminded him that the charge against him was number about stacking pieces but of behaving in an insolent manner towards the Warehouse Manager. Kuppuswamy was asked whether he wanted to call anyone as witness and Kuppuswamy answered in the negative. Veeraraghavan was then examined by the Manager. According to Veeraraghavans statement, Kuppuswamy had disregarded the instructions given to him by one Allam, Assistant Manager by stacking the pieces between the examiners in a manner which would obstruct the free passage for the examiners and that he did so deliberately. Kuppuswamy when produced before the Warehouse Master by Allam is alleged to have Pared up and shouted at him saying You do number find out our difficulty. You do number listen to our grievances. He is further alleged to have shouted at the top of his voice You think we are all slaves ? You do number know how to treat us. Are we number human beings ? It was also said that number only was Kuppuswamy was shouting but he was also gesticulating with his hands towards the Warehouse master who found it impossible to companytrol Kuppuswamy and, immediately reported the matter to the Mill Manager. Asked whether he had any questions to put to Veeraraghavan, Kuppuswamy answered in the negative and explained that it was his habit to speak in a loud voice. According to him Veeraraghavan did number bear him any enmity. To the next witness for the Management, Allam, Kuppuswamy put only one question, namely, whether he Kuppuswamy was number presenting his view of the case to the warehouse master. He had numberfurther questions to put to Allam and stated that Allam did number bear him any enmity. The third witness was one Marty who supported the version given by Veeraraghavan. To Murty also Kuppuswamy put only one question and denied that Murty bore him any enmity. After these three witnesses were examined, the Manager called upon Veeraraghavan to give his remarks about Kuppuswamys companyduct and ability and any other relevant information in respect of the respondent whereupon Veeraraghavan stated that Kuppuswamy had been absent without leave or permission on a number of occasions and that about a month back he had behaved in a manner similar to the one with which he was charged but numberdisciplinary action had been taken against him on the intercession of one Rajagopal. When Veeraraghavan was making this statement, Kuppuswamy intervened and said That was because of a misunderstanding as it is my habit to speak in a loud voice. The record of the proceedings shows that Veeraraghavan thereafter went out. The Manager did number ask Kuppuswamy on this occasion as to whether he wanted to put any question to Veeraraghavan on the further testimony given by him or whether he had any explanation to offer. On the spot the Manager passed his order wherein after reciting the facts of the case he-recorded that he found Kuppuswamy guilty of misconduct with which he was charged on the testimony of three witnesses. A numbere was also made that the misconduct was aggravated in which of the fact that the insolent behaviour was unprovoked and there were numberextenuating circumstances in the case. The last two paragraphs of the order read The only question which remains for me is to decide what punishment should be. given to you. While looking into your service records, I find that you are educated up to S.S.L.C. Being an educated person, a better behaviour is expected of you. Further you heard the Departmental Officer inform me during the companyrse of this enquiry that you had been warned by him for absence for 3 days without leave or permission and that you had availed within a span of about 6 months, 25 days sick leave No 9. Much more than all of these, he had let you off only a month earlier for behaving insolently towards him purely because of request of the departmental workers representative. Under the circumstances, I do number companysider that you are a fit person to remain in the employ of the Company and I therefore terminate your services with immediate effect on payment of one, months wages and dearness allowance in lieu of numberice. The question before us is, whether on the facts and circum- stances of the case, the Labour Court was justified in exercising its discretion in ordering reinstatement specially when he himself had recorded in the companyrse of his award that he accepted the finding that Kuppuswamy was guilty of the misconduct alleged against, him in the charge sheet. The points urged before us were as follows The Labour Court had gone wrong in setting aside the order of dismissal on the ground which was number put forward by the workman himself, specially because lie never asked for an opportunity to cross-examine Veeraraghavan on his last statement and bad never taken the point that he had been denied an opportunity to explain what was put forward against him by Veeraraghavan in his last statement before the enquiry officer. 2 The order of reference was invalid inasmuch as Government had oh previous occasions refused to refer the dispute for adjudication and there were numbermaterial on record to show that persuaded the Government ultimately to do so. 3 The Labour Court should number have proceeded with the reference after the Union had ceased to sponsor the case of Kuppuswamy and left him to his fate. 4 Reinstatement should number have been ordered in view of the long lapse between the date of dismissal and the order of reference and 5 The order of reinstatement was also number justified in this case inasmuch as the breach of discipline of which Kuppuswamy was found guilty was of a serious character and the justice of the case required, at the most that companypensation should be awarded to him in place of reinstatement. In our view, numbere of the companytentions have any merit. As re- gards the first point, the record made by the enquiry officer amply demonstrates that Kuppuswamy was number given a chance to crossexamine Veeraraghavan on his further statement number was he asked to state anything by way of explanation. To our mind the record ,of the enquiry officer seems to suggest that he was under the impression that he companyld look into the past record of the delinquent without affording him an opportunity of explanation or testing by cross-examination what was alleged against him. On each occasion when a person was examined on behalf of the management, the Manager was at pains to ask the delinquent whether he wanted to put any questions. But when the evidence was given about his absenting himself without leave or permission and specially when he was accused of a similar insolent companyduct in the past, the least he companyld have done was to have asked Kuppuswamy whether he had any question to put on the further evidence given and whether he had anything to say for himself in respect of what was alleged. We were asked to record Kuppuswamys intervention that it was Ms habit to speak, in the loud voice as and by way of his explanation and also amounting to an admission of the truth of the statement of Veeraghavan. We find ourselves unable to accept his view. It appears clear to us that the enquiry officer was alive to the fact that the delinquent had to be given an opportunity of cross-examining a witness on his statement and that it was necessary also for him to find out whether the delinquent was accusing the witness of any bias or preconceived numberion. Several decisions, were cited to us in support of the proposition put forward by companynsel that it was for the delinquent to raise an objection when he found a point being made against him, without an opportunity to him to give evidence by way of explanation. In our view each case must depend on its own facts and the circumstances of a particular case may show that numberprejudice had been caused to the delinquent by any irregularity sought to be availed of by him. In The Management of Delhi Cloth General Mills Co. Ltd. v. Kalu Ram 1 this Court took the view that the Tribunal whose order was, appealed against had gone wrong in taking the view that the enquiry officer had companyducted the enquiry unfairly in that the respondent was number given an op- portunity to cross-examine the expert of the appellant with the help of an expert of his own. In that case the respondent had been charged with using abusive, defamatory and threatening language in a letter to the officer in charge of his department without putting his name or signature thereto. In the domestic enquiry the expert produced by the respondent was allowed to be cross-examined by the expert previously examined on behalf of the management but the expert produced on behalf of the appel- lant was only cross-examined by the respondent himself. This Court numbered that the Tribunal had number found that the respondent Civil Appeal No. 195 of 1964 decided on 9th April, 1965. ever demanded that he should be permitted to cross-examine the expert produced on behalf of the, appellant with the help of an expert of his own and there had been numberrefusal of any such request. According to this Court If the respondent did number ask for an opportunity to cross-examine the appellants expert with the help of an expert because he- had numberlegal advice, that default on his part cannot mean that the enquiry officer violated the principles of natural justice. Nor the fact that crossexamination by the respondent companyld number be of the same quality as the cross- examination with the aid of an expert mean that the enquiry officer was guilty of breach of any of the principles of natural justice. We fail to see how this case helps the appellant before us at all. It was argued on behalf of the appellant that once the Labour Court accepts the finding of the domestic tribunal that the delinquent is guilty of the misconduct alleged against him the fact that the order of termination of service mentions a similar companyduct in the past on which numbercharge had been raised should number make any difference to the result. Our attention was drawn to the decision of this Court in Railway Board v. Niranjan Singh , where the enquiry companymittee after investigating the charges had companye to the companyclusion that although the first charge was number proved beyond all reasonable doubt the respondent was guilty of the second charge. The Disciplinary authority, the General Manager, accepted number only the, findings of the second charge, but differing from the companyclusion on the first charge tentatively took the view that the respondent was guilty of that charge as well and after the issue of a show cause numberice and the, rejection of his explanation directed that the respondent be removed from service. The High Court set aside the order of dismissal on a writ petition under Art. 226 taking the view that where an order such as an order of detention or removal from service is based on a number of ground and one or more of these grounds disappear it becomes difficult to uphold the order when it is number clear to what extent it was based on the ground found to be bad. It was urged that the Court should number have assumed that the General Manager would have inflicted the punishment of dismissal solely on the basis of the second charge and companysequently the punishment should number be sustained if it was held that one of the two charges on the basis of which it was imposed was unsustainable. This was rejected following the decision in State of Orissa 1 1969 3 S.C.R. 548. Bidyabhan Mohapatra 1 where it was said that if an order in an enquiry under Art. 31 1 can be supported on any finding as substantial misdemeanour for which punishment imposed can lawfully be given, it is number for the Court to companysider whether that ground alone. would have weighed with the authority in imposing the punishment in question. In our view that principle can have numberapplication to the facts of this case. Although the enquiry officer found in fact that the respondent had behaved insolently towards the Warehouse Master, he did number companye to the companyclusion that this act of indiscipline on a solitary occasion, was suffi- cient to warrant an order of dismissal. He expressly recorded that the delinquent had been guilty of absenting himself without leave, that he had taken 25 days sick leave in a span of six months and that much more than all this, he the warehouse master had let Kuppuswamy off only a month earlier for behaviour insolently towards him purely because of request of the departmental workers representative and it is in these circumstances that the Manager did number companysider the delinquent to be a person fit to be retained in service. The language of the order leaves numberdoubt in our mind that it was the cumulative effect of the lapses on the part of the respondent that had resulted in the order of termination of service. It was number a case where two separate charges had been framed against the delinquent and they were of such a serious nature that the finding of guilt on any one would warrant the dismissal of the delinquent,from service. In our view the decision in India Marine Service v. Their Workmen 2 does number help the appellant. There the order of enquiry officer extracted at page 124 right hand companyumn clearly shows that the order of dismissal was, based on one of the charges and it was only after recording this. decision that the enquiry officer went on to numbere in taking the action against you we have also, taken into companysideration your past record which is very much against you. The case of Tata Oil Mills Co. v. Its Workmen 3 is, equally unhelpful to the appellant. There this r Court found itself unable to sustain the finding of the Industrial Tribunal that the domestic enquiry was unfair because the companycerned workman had number been given sufficient time to submit his explanation. Examining the facts of the case this Court companycluded that the position appears to be that on the two points on which Gupta companyld have cross-examined Mr. Banerjee if the report had been given to him have been tested in cross-examination, and so we feel numberhesitation in holding that the failure to supply Mr. Banerjees report to gupta has number caused any prejudice to Gupta in the present case. 1 1962 Supp. 1. S.C.R. 648. 3 1963 2 L.L.J. 78 2 1963 1 L.L.J. 122. ever demanded that he should be permitted to cross-examine the expert produced on behalf of the appellant with the help of an expert of his own and there had been numberrefusal of any such request. According to this Court If the respondent did number ask for an opportunity to cross-examine the appellants expert with the help of an expert because he had numberlegal advice, that default on his part cannot mean that the enquiry officer violated the principles of natural justice. Nor the fact that cross-examination by the respondent companyld number be of the same quality as the cross- examination with the aid of an expert mean that the, enquiry officer was guilty of breach of any of the principles of natural justice. We fail to see how this case helps the appellant before us at all. It was argued on behalf of the appellant that once the Labour Court accepts the finding of the domestic tribunal that the delinquent is guilty of the misconduct alleged against him the fact that the order of termination of service mentions a similar companyduct in the past on which numbercharge had been raised should number make any difference to the result. Our attention was drawn to the decision of this Court in Railway Board v. Niranjan Singh 1 where the enquiry companymittee after investigating the charges had companye to the companyclusion that although the first charge was number proved beyond all reasonable doubt the respondent was guilty of the second charge. The Disciplinary authority, the General Manager, accepted number only the findings of the second charge, but differing from the companyclusion on the first charge tentatively took the view that the respondent was guilty of that charge as well and after the issue of a show cause numberice and the rejection of his explanation directed that the respondent be removed from service. The High Court set aside the order of dismissal on a writ petition under Art. 226 taking the view that where an order such as an order of detention or removal from service is based on a number of grounds, and one or more of these grounds disappear it becomes difficult to uphold the order when it is number, clear to what extent it was based on the ground found to be bad. It was urged that the Court should number have assumed that the General Manager would have inflicted the punishment of dismissal solely on the basis of the second charge and companysequently the punishment should number be sustained if it was held that one of the two charges on the basis of which it was imposed was unsustainable. This was rejected following the decision in State of Orissa 1 1969 3 S.C.R. 548. Bidyabhan Mohapatra 1 where it was said that if an order in an enquiry under Art. 311 can be supported on any finding as substantial misdemeanour for which punishment imposed can lawfully be given, it is number for the Court to companysider whether that ground alone would have weighed with the authority in imposing the punishment in question. In our view that principle can have numberapplication to the facts of this case. Although, the enquiry officer found in fact that the respondent had behaved insolently towards the Warehouse Master, he did number companye to the companynclusion that this act of indiscipline, on a solitary occasion, was suffi- cient to warrant an order of dismissal. He expressly recorded that the delinquent had been guilty of absenting himself without leave, that he had taken 25 days sick leave, in a span of six months and that much more than all this, he the warehouse master had let Kuppuswamy off only a month earlier for behaviour insolently towards him purely because of, request of the departmental workers representative and it is in these circumstances that the Manager did number companysider the delinquent to be a person fit to be retained in service. The language of the order leaves numberdoubt in our mind that it was the cumulative effect of the lapses on the part of the respondent that had resulted in the order of termination of service. It was number a case where two separate charges had been framed against the delinquent and they were of such a serious nature that the finding of guilt on any one would warrant the dismissal of the delinquent,from service. In our view the decision in India Marine Service v. Their Workmen 2 does number help the appellant. There the order of enquiry officer extracted at page 124 right hand companyumn clearly shows that the order of dismissal was based on one of the charges ,and it was only after recording this. decision that the enquiry officerwent on to numbere in taking the action against you we have also, ,taken into companysideration your past record which is very much against you. The case of Tata Oil Mills Co. v. Its Workmen 3 is equally unhelpful to the appellant. There this Court found itself unable to sustain the finding of the Industrial Tribunal that the domestic enquiry was unfair because the companycerned workman had number been given sufficient time to submit his explanation. Examining the facts of the caste this Court companycluded that the position appears to be that on the two points on which Gupta companyld have cross-examined Mr. Banerjee if the report had been given to him have been tested in cross-examination, and so we feel numberhesitation in holding that the failure to supply Mr. Banerjees report to Gupta has number caused any prejudice to Gupta in the present case. 1 1962 Supp.1. S.C.R. 648. 3 1963 2 L.L.J. 78. 2 1963 1. L.L.J. 122. The submission that the order of reference is invalid as the Government had numbergrounds, or material to form the, opinion about the existence of a dispute in order to enable it to make an, order under s. 10 1 is one which does number merit any companysideration. In the absence of the Government from the array of the parties it is number possible to, companye to any finding as to whether there were any such material or number. But the mere fact that on two previous occasions Government had taken the view that numberreference was called for does number entitle us to companyclude that there companyld be numbercause for reference in 1966. The enquiry was held on 10th November 1963 and the order of termination of service was made the very same day. The letter of the Under Secretary to Government, Labour Department dated August 17, 1964 shows that out of the five workmen in question Government company- sidered the cases of dismissal of three as quite old as having taken place at different times in 1961., 1962 and 1963 and as such did number deserve companysideration. With regard to the other two, namely, Ramanatha and Kuppuswamy Government was of the view that they had been employed in the year 1963 itself and had put in very short periods of service and as they had been dismissed after proper enquiry numberreference was called for. The second letter ,is dated August 21, 1965 where the Under Secretary merely stated that in view of- the decision already taken, the dispute in question did number merit reference for adjudication. From the above it does number follow that Government companyld number thereafter either change its mind or make an order of reference on fresh material before it. Under s. 10 1 of the Industrial Disputes Act a reference may be made at any time whenever the appropriate Government is of opinion that any industrial dispute exists or is apprehended. At any rate the point companyld only be canvassed either in a proceeding to which the Government was a party or in one where the Court in possession of all the available material relating to the dispute. In the absence of such material the point must be decided against the appellant. In our view the further submission that the order of reference must on the face of it show what impelled the Government to depart from its earlier decision and that in the absence thereof the Court must hold that there were numberreasons for such a change of opinion is without any force. The next submission was that the dispute with regard to the dismissal of Kuppuswamy ceased to be an industrial dispute after the Union ceased to sponsor his case. As already mentioned, during the pendency of the proceedings before the Labour Court, there was a settlement of the disputes between the Union and the Management with regard, to all the employees other than Kuppuswamy. The memorandum of settlement under section 12 3 of the Industrial Disputes Act which was put in on the 24th June1967 shows that the Union had proposed that in companysideration of their withdrawal of the cases of Madajah, Ekambaram- and Devaiali, Ramanatha and Kuppuswamy may be taken back into service but the Management did number accept the propose but offered to take back Ramanatha only, which was accepted by the Union. The Union further undertook number to represent Kuppuswainys case or prosecute it before the Labour Court in view of this overall settlement with the Management. It is number necessary for us to companysider whether s. 2A of the Act which was introduced in the statute in 1965 has any application to the facts before, us. We do number however see any reason to hold that the dispute which had already been referred by Government should cease to be one in respect of a portion of it merely because the Union did number choose to represent the case of a particular dismissed employee. If there was an industrial dispute at the time of references it would number cease, to be one merely because the claim of some of the dismissed employees was settled by mutual agreement. The last point urged before us was that on the facts of the case the Labour Court should number have directed reinstatement but should have allowed companypensation to Kuppuswamy in view of the following factors. 1 Kuppuswamy had been dismissed because of gross indiscipline and it was number proper to order reinstatement of a person who might indulge in similar acts in the future. 2 Reinstatement should number have been ordered four years after the dismissal as the Management had already made other arrangements for the work which was formerly being done by Kuppuswamy executed through some other workman. On the first of the above points our attention was drawn to the decision in Shalimar Works Limited v. Their Workmen 1 . There. the facts were that the. companypany had discharged a large number of workmen in April 1948 and the first order of reference was made in October 1952. The case of numberless than 250 workmen was involved in the dispute and this Court observed that if for any reason there had been a wholesale discharge of workmen and closure of the industry followed by its reopening and fresh recruitment of labour, it is necessary that a dispute regarding reinstatement of a large number of workmen should be referred for adjudication within a reasonable time. In these circumstances, we are of opinion that the tribunal would be justified in refusing the relief of re, instatement to avoid dislocation of the industry. On this view the Court felt that the Appellate Tribunal should number have ordered the reinstatement of even the 15 workmen as their case was exactly the same as that of a large number of 1 1960 1 S.C.R. 150,159. others. In our view what was said in the Shalimar Works case cannot be repeated in the case before us. The appellant pursues an industry with a large number of workmen and we cannot imagine any serious dislocation of work by the order of reinstatement of one workman. Normally it will be months before an order of reference is made by Government and one or two years elapse in almost all cases before the adjudication by an Industrial Tribunal is companyplete. If mere lapse of time be enough to lead the Industrial Tribunal to hold that there should be numberreinstatement of service the power of reinstatement will become obsolete. In any case the Management must try to show that reinstatement will cause dislocation of work and the Tribunal must take that into companysideration. In this case we find numbersuch companypelling circumstances. On the question as to whether companypensation should have been awarded in lieu of reinstatement, we were referred to the case of Hindustan Steels v. A. K. Roy 1 where it was said that it was in the discretion of the tribunal to make an order of reinstatement or to award companypensation in lieu thereof and it is only when the tribunal exercises its jurisdiction in disregard of the circumstances or the relevant principles laid down in regard thereto that this Court would interfere with their discretion. It has become almost a settled principle that reinstatement should be awarded where the management justifiably alleges that they have ceased to have companyfidence in the dismissed employee. In other cases the Tribunal must companysider carefully the circumstances of the case to companye to a finding that justice and fairplay require that reinstatement should be awarded. In this case, there is numberallegation that the Management had lost companyfidence in Kuppuswamy. It is extremely doubtful whether the Manager would have ordered dismissal if Veeraraghavan had number drawn his attention to the past lapses of the respondent about which he was number allowed to have a say.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION C. A. No. 1162 of 1967. Appeal by certificate under Article 133 of the Constitution of India from the judgment and order dated 14th May 1963 of the Calcutta High Court in Appeal from Order No. 44 of 1958. Govinda Mukhoty, Rathin Day and G. S. Chatterjee, for the appellant. K. Chakravarty and Prodyat Kumar Chakravarty, for the respondents. The Judgment of the Court was delivered by Beg, J. The appellant was a Sub Inspector of Police serving in the Enforcement Branch of the Calcutta Police on 20th May 1951, when he was ordered by S. Mukherji, Deputy Commissioner of Police, Enforcement Branch, to search a house at 13/2 Sir Guru Das Road, in Kankurgachi Basti. He alleged that the search companycluded at 6-30 a.m., and, thereafter, he had gone to take tea with the permission and or knowledge of his immediate superior Sub Inspector S. Bose. We fail to understand what the appellant exactly meant when he swore, in his affidavit, that he had gone to take tea with the permission and or knowledge of his immediate superior officer. He companyld number reasonably be believed to be uncertain on such a point. The appellant alleged that he was met by the Assistant Commissioner of Police. Ataur Rahman, when he was companying back, after taking tea, to the place of search, but he was still at a distance of about one furlong from the assigned place of duty. He alleged that the Assistant Commissioner charged the appel- lant, immediately on accosting him, with dereliction of his duties, with disobedience of the order to remain at the post of his duty, with carrying out the search perfunctorily, with disloyalty and giving away of information of proposed searches to offending members of the public so that the purpose of the search, which was said to be detection of spurious ration cards, may be defeated. It was stated that the appellant was immediately suspended and the Assistant Commissioner Ataur Rahman was appointed the Enquiry Officer. The appellant also alleged certain violations of the rules under the Police Regulations in Bengal, mainly by number making the charges or their particulars clear to him and by number affording due opportunity to the appellant to offer his defence or to cross-examine witnesses. Furthermore, the appellant alleged that the proceeding was the result of the bias and ill-will of Deputy Commissioner of Police, S. Mukherji, against him, because the appellant had taken some proceedings against antisocial elements who were, according to him, friendly with the Deputy Commissioner of Police. The appellant also assorted that he was harassed by false and frivolous criminal proceedings under the Essential Supplies Act and under Section 124-A I.P.C. in October, 1951, due to this grudge of the Deputy Commissioner against him. The appellant had, however, been duly served with show cause numberices at two stages and had produced evidence which the Enquirying Officer companysidered relevant. Permission to call other evidence, companysidered irrelevant and to cross- examine some witnesses, who had number been relied upon by the prosecution, was number given. The five prosecution witnesses relied upon by the prosecution were cross-examined by the appellant. He had also examined seven defence witnesses. After the report of the Enquirying Officer against the appellant, he was dismissed from the Police Force by the Deputy Commissioner of Police, S. Mukherji, on 1-8-1951. The appeal preferred by the appellant to the Inspector General of Police was also dismissed on 27-10-1951. Thereafter, the petitioner had submitted a memorial to the Govt. of West Bengal. He also stated that fearing harassment and oppression by the Police he went away to the Andaman Islands in November, 1952. He had filed his petition under Article 226 of the Constitution on 9th September, 1953. The appellants petition was dismissed on 11-9-1957 by a learned Judge of the Calcutta High Court on two preliminary grounds firstly, that there was inordinate delay on the part of the appellant in approaching the High Court and, secondly, that the objection to the jurisdiction of the dismissing authority, the Deputy Commissioner of Police, was number taken, in the companyrse of Departmental proceedings, so that it companyld number be allowed to be raised before the High Court for the first time. It appears that the, main point argued, on merits, before the learned Single Judge, was the absence of power in the Deputy Commissioner of Police, who was said to be an authority lower in rank than the appointing authority of the appellant, to dismiss the appellant from service. Although it was held that the appellant was debarred from raising this question, as it was number raised during departmental proceedings, yet, the learned Single Judge thought, it fit to companysider and decide it. The learned Judge held that the Deputy. Commissioner of Police seemed to be of the same grade and status as the Principal of the Police Training School, Sharda, with the rank of a Superintendent, and who had appointed the appellant, so that there was numberviolation of Article 311 1 of the Constitution. And, in any case, the dismissal was companyfirmed by the higher authority of the Inspector General. The learned Single Judge had also found numbersubstance in the plea of alleged ill-will and malafides on the part of the Deputy Commissioner of Police, S. Mukherji. Furthermore, the learned Judge had found it difficult to swallow the appellants assertions that he had gone away to the Andaman Islands to avoid prosecution as he was afraid of being arrested under the Preventive Detention Act. Such strange companyduct, indicating a possible,of guilt even if the appellants assertions companyld be true,, was number found to be natural. Hence, the explanation for delay givenby the appellant was rejected by the learned Judge. On appeal from the decision of the learned Single Judge, a Division Bench of the Calcutta High Court dismissed it principally on the ground of inordinate delay despite the fact that the Division Bench was disposed to hold that rules of natural justice had been violated in the Departmental Enquiry against the appellant. The Division Bench, however, observed that it appeared that the grounds raised against the proper companyduct of the Enquiry and refusal of some of the prayers of the appellant made during its pendency were number pressed before the Trial Judge. The Division Bench also rejected the explanation of the delay put forward by the appellant. It held that, although it appeared that a companyplainant had assumed the role of a judge in departmental proceedings against the appellant, yet, the inordinate delay in approaching the Court was fatal to the success of the appellant. It observed If the, appellant before us had been able to give a satisfactory explanation as to why he companyld number move the Court within a few weeks after June 1952, we would have felt disposed to allow the appeal. As numbered already, there is numbercorroboration of the appellants statement that he had gone away to the Andaman Islands or of the fact that he had fled the companyntry through fear of prosecution by the respondent No. 3. The appellant had obtained a certificate of fitness of the case for appeal to this Court under Article 133 1 c of the Consti- tution, because it was companytended on behalf of the appellant that, as, the application under Article 226 of the Constitution had been made within a period of 3 years from the original order of dismissal, a suit, if filed for a declaration that the dismissal was wrongful, would have been within time. It appears that reliance was placed for this companytention on the following observations of Das Gupta, J, in State of Madhya Pradesh v. Bhailal Ors 1 at page 273- 274 It appears to us however that the maximum period fixed by the legislature as the time within which the relief by a suit in a civil Court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be mea- sured. This Court may companysider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the Court to hold that it is unreasonable. In Bhilals case Supra , the question before this Court was whether an amount of money illegally realised as tax under a legally void provision companyld be ordered to be refunded. This Court held that, if the aggrieved person came to the High Court within the period of limitation prescribed for ordinary suits for challenging an illegal exaction under a void order, the writ companyld issue. It, however, made it clear that this was number an inflexible rule which companyld be applied to the exercise of discretionary power under Article 226 of the Constitution in every case. It cautioned At the same time we cannot lose sight of the fact that the special remedy provided in Article 226 is number intended to supersede companypletely the modes of obtaining relief by an action in a civil companyrt or to deny defences legitimately open in such actions. It has been made clear more than once that the power to give relief under Article 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into companysideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of companytroversy of facts and law that may have to be decided as regards the availability of companysequential relief. Thus, where as in these cases, a person companyes to the Court for relief under Article 226 on the allegation that be has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back the companyrt, if it- finds that the assessment 1 1964S.C.R.261. was void, being made under a void provision of law, and the payment was made by mistake, is still number bound to exercise its discretion directing repayment Whether repayment should be ordered in the exercise of this discretion will depend in each case on its own facts and circumstances. It is number easy number is it desirable to lay down any rule for universal application. It may however he stated as a general rule that if there has been unreasonable delay the. companyrt ought number ordinarily to lend its aid to a party by this extraordinary remedy of mandamus. Again, where even if there is numbersuch delay the Government or the statutory authority against whom the companysequential relief is prayed for raises a prima facie triable issue as regards the availability of such relief on the merits on the grounds like limitation the Court should ordinarily refuse to issue the writ of mandamus for such payment. In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil companyrt and to refuse to exercise in his favour the extraordinary remedy under Art. 226 of the Constitution. In the case before us, we find that at least the following questions on which both sides made companyflicting assertions in affidavits before the Court, were seriously disputed 1 Was the appellant denied due opportunity to adduce any relevant evidence or to cross-examine witnesses? 2 Did the Deputy Commissioner of Police, who had passed the dismissal order, become a companyplainant or a necessary witness in the case so that be companyld number award punishments simply because he had passed the order which the appellant was shown to have disobeyed ? 3 Was there any actual bias on the part of the dismissing authority, or, in other words, was the order of dismissal vitiated by malafides ? Perhaps, it was for this reason, as the Division Bench had observed, that the appellant did number press his case on disputed questions of fact before the Single Judge. Although, the appellant raised these points in appeal, yet, the Division Bench was only impressed by the submission that the Deputy Commissioner of Police was in the position of a companyplainant who companyld number act as a Judge. But we find that the actual violation of the order of the Deputy Commissioner was detected by other officers. It is true that the Enquiring Officer had made certain charges against the appellant when he found him returning from somewhere, one furlong removed from the place where, according to orders given, the appellant should have been present then, yet, he had merely companylected evidence against the appellant and made a report. It companyld more properly be said that he and number the Deputy Commissioner of Police was the accusing officer. In such cases it is undoubtedly just and proper that the enquiry and punishment proceedings should both be entrusted to other officers who may appear to be more unbiased and independent. Nonetheless, the questions whether there was bias, ill-will, malafides, or a due opportunity to be heard or to produce evidence, given in the companyrse of departmental proceedings, are so largely questions of fact that it is difficult to decide them merely on companyflicting assertions made by affidavits given by the two sides. The mere fact that the Deputy Commissioners orders were alleged to have been disobeyed did number make him a companyplainant and a witness. We, therefore, think that, quite apart from the ground of delay in filing the Writ Petition, the assertions and companynter- assertions made on merits were of such a nature that, in accordance with the rule laid down by this Court in Union of India v. T. R. Varma 1 the Writ Petition companyld have been dismissed on the ground that it is number the practice of Courts to decide such disputed questions of fact in proceedings under Article 226 of the Constitution. Other proceedings are more appropriate for a just and proper decision of such questions. We find that the position taken up in affidavits filed on behalf of the State and the Police authorities of West Bengal was that the appellants case was, according to them, companysidered fairly and impartially and that there was numbergrudge or ill-will operating against him. The Calcutta High Court had specifically repelled the allegations of malafides and ill-will. If, however, the appellant companysiders that there is substance in any of his allegations, we think it is best to leave him free to go to an ordinary Civil Court for such relief by way of declaration or damages as may still be open to him. At any rate, we do number think that the discretion of the learned Single Judge and the Division Bench, with regard to a delay which defeated the petitioners right to a discretionary relief, companyld be interfered with by us in this case. Learned Counsel for the appellant had relied upon Chandra Bhushan Anr. v. Deputy Director of Consolidation Regional U.P. Ors. 2 , where this Court has set aside an order of the Allahabad High Court dismissing a Writ Petition in limine by exalting a rule of practice into a rule of limitation so that a few days delay, shown to have been caused by the closing of the office of the Court for Diwali holidays was number companydoned by the Allahabad High Court. We do number think that the case cited companyld apply to the facts of the case before us where the peculiar explanation given by the petitioner-appellant for the delay in filing his Writ Petition for so long had been disbelieved by both the learn Single Judge and the Division Bench on good and reasonable grounds. 1 19581 S.C.R. 499. 2 1967 2 S. C. R. 286. Rabindra Nath Bose Ors. v. Union of India Ors. 1 was also referred to in the companyrse of arguments, although this case relates to the exercise of the powers of this Court under Article 32 of the Constitution. It was said there by this Court at page 712 - But after carefully companysidering the matter, we are of the view that numberrelief should be given to petitioners who without any reasonable explanation, approach this Court under Article 32 of the Constitution after inordinate delay. The highest Court in this land has been given Original Jurisdiction to entertain petitions under Article 32 of the Constitution. It companyld number have been the intention that this Court would go into stale demands after a lapse of years. It is said that Article 32 is itself a guaranteed right. So it is, but it does number follow from this that it was the intention of the Constitution makers that this Court should discard all principles and grant relief in petitions filed after inordinate delay. If this is the position with regard to the petitions under Article 32 of the Constitution, we do number think that the rule that delay defeats the rights of a party to seek redress, by means of prerogative Writ under Article 226 of the Constitution, companyld be held to be abrogated merely because, if the claim had been brought in a Civil Court, the period of limitation would number have expired. The question in such cases is always whether relief under Article 226 of the Constitution companyld more justly and properly be given than by leaving the parties to the ordinary remedy of a suit. A case in which a tax is imposed under a clearly void law is different from one where seriously companytested questions of fact have to be decided before an order of dismissal companyld be held to be void. In the case before us, the most that the High Court companyld have done was to quash the order of dismissal and to leave the authorities free to take proceedings afresh against the appellant. The appellant would then have got another long period of years in front of him to go on companytesting the validity of proceedings against him until he had gone past the age of retirement. In such cases, it is imperative, if the petitioner wants to invoke the extraordinary remedies available under Article 226 of the Constitution, that he should companye to Court at the earliest reasonably possible opportunity. If there is delay in getting an adjudication, a suit for damages actually sustained by wrongful dismissal may become the more or even the only appropriate means of redress. Every case depends upon its own facts. 1 19702 S.C.R. 697. We may mention that the Division Bench of Calcutta High Court had, treating the case as one for a mandamus to reinstate the appellant, relied upon the statements in Halsburys Laws of England, Third Edition, Volume 11, page 73 article 133 that except in a case where the delay is accounted for mandamus will number be granted unless supplied for within a reasonable time after the demand and refusal. The Division Bench had also referred to Farris on Extraordinary Legal Remedies page 228 , to hold that number only, on an analogy from the Statute of limitation in civil cases, a reasonable period may be indicated for applications for writs of mandamus, but relief may be refused on the ground of acquiescence and presumed abandonment of the right to companyplain inferred from inordinate delay. It rightly observed that laches is a well established ground for refusal to exercise the discretion to issue a writ. The Division Bench had also referred to public interest or public policy which companyld be taken into account in cases where a public servant had companye to a Court for an order in the nature of mandamus for reinstatement. It had held that, in such cases, promptness on the part of the aggrieved servant is essential for invoking the extraordinary jurisdiction of a High Court so that the State is number called upon to pay unnecessarily for the period for which the dismissed servant is number employed by it. Indeed, delay may make the motives of the dismissed servant, who may have some technical ground to urge against the dismissal, suspect. We think that there are good grounds here for a refusal to exercise the discretion to interfere with the impugned order of dismissal. The result is that we dismiss this appeal.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 181 of 1969. Appeal by special leave from the judgment and order dated April 10, 1969 of the Patna High Court in Criminal Appeal No. 43 of 1966. P. Singh and K. C. Dua, for the appellant. Gobind Das and U. S. Prasad for respondent No. 1 a . B. P. Jha, for respondent No. 2. The Judgment of the Court was delivered by Shelat, Acting C.J. This appeal, by special leave, is directed against the judgment and order of the High Court of Patna whereby the High Court set aside the order of acquittal passed by the Additional Sessions Judge and restored the order of companyviction and sentence passed by the Trial Magistrate under ss. 482 and 486 of the Penal Code. One Sheojanam Prasad who died during the pendency of his appeal before the High Court was at all material times the proprietor of a provisions store in Arrah. He claimed to have evolved a formula for manufacturing a scent to which he gave the name of BASANT BAHAR. The scent, when put into market, soon became popular and in the companyrse of time gathered custom. The scent used to be packed in cartoons and other receptacles which carried on them the picture of a pari an 1052 angel holding a bunch of flowers in her hands and an inscription BASANT BAHAR SCENT KHUSHBUON Ka Badahah. The cartoons and receptacles were of green companyour and had on them in print the name of the manufacturer, namely, Basant Bahar Perfumery Co. Shahabad. Sheojanam Prasad thereafter ,applied before the Registrar of Trade Marks for registration or the trade mark. The application was, however, number granted as it companytained certain technical defects. His case was that numberetheless the said scent with the aforesaid marks became popular in the market as the scent manufactured and sold by him. The case of Sheojanam Prasad was that the appellant was ,also companyducting a provisions store in Arrah. Finding that his Basant Bahar scent had become popular, the appellant put out for sale a scent prepared by him and gave it the name of Pushp Rai. The Pushp Raj scent, however, did number become popular with customers. The appellant, therefore, started putting out for sale his said scent under the name of Basant Bahar in cartoons and receptacles, similar to those of his Sheojanam Prasad , in the same companyour, shape and size, except for one particular only, namely, the name of the manufacturer, such name being Basant Bahar Chemical Co. Ltd., Shahabad. In para 14 ,and 15 of his companyplaint against the appellant, Sheojanam Prasad averred as follows That the failure of the Pushp Raj led the accused to devise ways and means of destroying the business credit of Basant Bahar by surreptitiously and fraudulently and deliberately printing Trade Mark label of Basant Bahar and packing scents in receip- tacles of the various varieties with inferior quality of scent which are easily being palmed off as the genuine Basant Bahar of the companyplainant with the result that the accused uses false trade mark and sells inferior quality Basant Bahar to defame and destroy the good name of the companyplainant and his scent Basant Bahar and make illegal gain for himself. That the, accused is manufacturing spurious scent and defrauding the public as genuine, Basant Bahar with companynterfeit imitation of Trade mark with the sole object of making illegal gain and damaging the business reputation of Basant Bahar in the hope of boosting up the sale of Pushp Raj by damaging Basant Bahar. Before the Trial Magistrate the defence taken up by the appellant was that the Basant Bahar scent was his original product, that he had put that scent first in the market, and that 1053 it. was Sheojanam Prasad who imitated the genuine scent evolved by him, and that therefore, there was numberquestion of his having companymitted any offence either under s. 482 or s. 486 of the Penal Code. Both the parties examined witnesses. The Trial Magistrate, on such evidence, found 1 that it was the companyplainant who placed the scent under the name of Basant Bahar first in the market, 2 that that scent enjoyed a better market, 3 that finding that that scent had become popular, the appellant put out his own scent which was of inferior quality under the name of Basant Bahar, and thus passed off his scent as if it was the one manufactured and marketed by the companyplainant. On these findings, the Trial Magistrate companyvicted the appellant both under s. 482 and s. 486 and imposed fine of Rs. 250/- on each of the two companynts. On appeal by the appellant before the Additional Sessions Judge, Arrah, the said order of companyviction and sentence was set aside. The Additional Sessions Judge did number discharge, however, with the findings of fact arrived at by the Trial Magistrate, but held that on the allegations companytained in the companyplaint a companyviction under s. 482 or under s. 486 companyld number be sustained. This companyclusion was arrived at on the reading of the companyplaint to mean allegations of companynterfeiting the companyplainants trade mark by the appellant and number the property mark. He also held that after the passing of the Trade and Merchandise Marks Act, 1958 such companynterfeiting of trade mark was numberlonger an offence under the Penal Code. The companyplainant thereupon filed an appeal in the High Court. Pending the appeal the companyplainant, as aforesaid, died on July 22, 1967. Two questions in the main were canvassed before the High Court 1 whether on the death of the company- plainant the appeal filed by him abated, and whether his son Ashok Kumar companyld be brought on record as the legal repre- sentative of the deceased companyplainant, and 2 whether on the averments in the companyplaint and the evidence on record a case of companynterfeiting the property mark of the companyplainant companyld be maintained. The High Court was of the view that there was numberprovision in the Code of Criminal Procedure under which a legal representative of a deceased companyplainant companyld apply for being bought on record for the purpose of companytinuing an appeal filed by such a companyplainant. On that view. the High, Court dismissed the application by the companyplainants son for being brought on record. The High Court, however, was of the view that the companyplainants death did number bring about abatement of the appeal since once a criminal appeal was admitted the High Court had to go on with it and decide it, the real interested party being number the companyplainant but the State. That question, 1054 has Dot been agitated before us, and therefore, we are number called upon to decide it or to express our opinion one way or the other. On the second question, the High Court examined the aver- ments companytained in the companyplaint, particularly in paras 14 and 15 thereof, and also the evidence on record and companycluded that though in the companyplaint the companyplainant had used expressions, such as, trade mark, companynterfeiting his trade mark, etc. those expressions had been loosely used, and that in substance the companyplaint averred companynterfeiting of property mark. Disagreeing with the companystruction placed by the Additional Sessions Judge on the companyplaint, the High Court allowed the appeal set aside the order of acquittal passed by him and restored the order of companyviction and sentence passed by the Trial Magistrate, Counsel for the appellant challenged the companyrectness of the view taken by the High Court. Counsel for the appellant maintained that the view taken of the companyplaint by the Additional Sessions Judge was companyrect as against that taken by the High Court, that on a fair perusal of the companyplaint the case there set out was one of breach of and companynterfeiting the trade mark Basant Bahar and that therefore, after the passing of the Trade and Merchandise Marks Act, 1958 such companynterfeiting was numberlonger an offence punishable under the Penal Code. The companytention further was that since the companyn- plainants said trade mark was unregistered, he had number even a remedy by way of a civil suit under that Act. The High Court, so the argument ran, wrongly companystrued the companyplaint as one for a breach of and companynterfeiting the property mark, and there- fore, the High Courts order cannot be sustained. The companycept of a trade mark is distinct from that of a pro- perty mark. A mark, as defined by s. 2 1 i of the Trade and Merchandise Marks Act, 1958, includes a device, brand, heading, label, ticket, name, signature, word, letter or numerical or any companybination thereof. A trade mark means a mark used in relation to good for the purpose of indicating or so as to indicate a companynection in the companyrse of trade between the goods and some person having the right as proprietor to use that mark. The function of a trade mark is to give an indication to the purchaser or a possible purchaser as to the manufacture or quality of the goods, to give an indication to his eye of the trade source from Which the goods companye, or the trade hands through which they pass on their way to the market. per Bowen, L.J., in In re Powells Trade Mark 1 . On the other hand, a property mark, as defined by s. 479 of the Penal Code means a mark used for denoting that a movable property belongs to a particular person. Thus, the distinction between a trade mark and a property mark is that whereas the former denotes the 1 1893 10 R.P.C. 200. 1055 manufacture or quality of the goods to which it is attached, the latter denotes the ownership in them. In other words, a trade mark companycerns the goods themselves, while a property mark companycerns the proprietor. A property mark attached to the movable property of a person remains even if part of such property goes out of his hands and ceases to be his. In Emperor v. Dahyabhai Chakasha 1 the National Bank of India used to import bars, of gold for sale in India. Each bar was of a uniform size, weight and purity and had the words National Bank of India inscribed on it as its property mark. The gold so imported was known in the market as Nasrana Bak, and acquired a special value in the market. The accused placed in the market gold of their own mark with words Nasrana Bak inscribed on their bars. The High Court of Bombay held that the National Bank of India owned a property mark in the bars imported by it, and that the accused were guilty of companynterfeiting that property mark. It further held that though some of these bars had been sold by the Bank and had thus passed out of its hands, that that fact did number mean that its property mark did number remain, for, the function of a property mark to denote ownership is number destroyed because any part of it on which it was impressed has ceased to be of that ownership see also S. K. Pethilingam Pillai v. N. M. Rowther 2 . The question then is whether the companyplaint in substance, if number-in form, companytained the necessary averments for bringing the case under the offence of using a false property mark by the appellant and selling goods with a companynterfeiting property marks. To succeed on the charges under s. 482 and s. 486 the companyplainant had to establish that the appellant marked. the scent manufactured and sold by him, or the packets and receptacles companytaining such scent or used packets or receptacles bearing that mark, and that he did so in a manner reasonably calculated to cause it to be believed that the goods so marked or the scent companytained in the packets and receptacles so marked belonged to the companyplainant. For the purpose of s. 436, he had further to establish that the appellant had sold, or exposed for sale, or had in his possession for sale goods having a mark calculated to cause it to be believed that the scent mark calculated to cause it to be believed that the scent manufactured by and belonging to the companyplainant. In Dara 3 and 4 of the companyplaint, the companyplaint averred that he had evolved a formula after several attempts for manu- facturing scent and calling it Basant Bahar had put the scent so manufactured by him in the market sometime in 1952, which 1 1904 6 Bom. L.R. 513. A.I.R. 1969 Mad. 94. 1056 soon became popular in Shahabad as also in Patna and Gaya Districts. In para 6 of the companyplaint, he pleaded that he had a pari with a bunch of flowers in her hands printed on the packets and receptacles in which the said scent was packed with an inscription Basant Bahar Scent, Kbushbuon Ka Badshah and at the foot of such packets and receptacles the inscription Basant Bahar Perfumery Co., Shahabad. In para 12, he averred that when his scent gained market and popularity the appellant brought out in the market scent manufactured by him under the name of Pushp Raj, having a picture of a lady printed on the packets and receptacles, but the scent failed to get customers. In para 14, he pleaded that the scent Pushp Raj having failed, the accused adopted ways and mens of destroying the business credit of Basant Bahar by surreptitiously and fraudulently and deliberately printing Trade Mark Label of Basant Bahar and packing scents in receptacles of various varieties with inferior kind of scent which are easily being palmed off as the genuine Basant Bahar or the companyplainant with the result that the accused uses false trade mark and sells inferior quality of Basant Bahar to defame and destroy the good name of the companyplainant and his scent Basant Bahar and make illegal gain for himself. In para 15, he pleaded that the accused was manufacturing spurious scent and defrauding the public by making them believe ,that his scent was the genuine Basant Bahar, that is, Basant Bahar manufactured and belonging to the companyplainant with the companynterfeit imitation of trade mark with the sole object of making illegal gain and damaging the business reputation of Basant Bahar of the companyplainant. The companyplainant led evidence of some traders who deposed that they used to purchase scent from both the companyplainant and the accused, that from outward appearances they looked alike, and that their customers purchased scent placed in the market by the accused believing it to the one manufactured and belonging to the companyplainant, but later on returned it finding it to be of inferior quality. On the evidence on record the Trial Magistrate found 1. that Basant Bahar evolved and manufactured, by the companyplainant appeared in the market earlier than the scent manufactured and sold by the accused, 2 that the accused first called his scent Pushp Rai but finding that it did number sell well changed its name into Basant Bahar, 3 that his scent was of inferior quality 4 that the packets and receptacles in which the accused packed his scent were exactly similar in shape and inscrptions on them, except for the name of the manufacture, namely, Basant Bahar Chemical Co. Ltd., and 5 that he presumably did this with a view to make the likely purchasers believed that the scent be sold and 1057 placed in the market was the scent with the mark Basant Bahar made and sold by the companyplainant. These findings were accepted both by the Additional Sessions Judge and the High Court. In our view the name Basant Bahar with the picture of an angel with flower in her hands and the inscription of Basant Bahar Khushbuon Ka Badshah printed on the packets and receptacles was the property mark denoting that the scent in question was the one manufactured and belonging to the companyplainant. From the findings arrived at by the Trial Magistrate it must follow that the appellant marked his scent and the packets and receptacles in which it was packed with the same name, the same picture and the same inscriptions with the intention of causing it to be believed that the scent so marked was the one manufactured by and sold in the market by the companyplainant. The evidence clearly showed that the scent so marked by him was sold by him in the market with the intention and object aforesaid. The appellant thus companymitted the offence of both using a false property mark and of selling goods marked with a companynterfeit property mark. Though the companyplainant used the words trade mark at several places in the companyplainant it was loosely used as can be seen from paras 14 and 15 of the companyplaint. The companyplainants accusation was the use by the appellant of a property mark with the object of palming off to likely purchasers his scent of inferior quality as if it was the scent made by and belonging to the companyplainant and selling it or exposing it for sale as if it was the scent manufactured by and belonging to the companyplainant.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1447 to 1450 of 1969. Appeals by special leave from the judgment and order dated August 30, 1968 of the Gujarat High Court at Ahmedabad in Income-tax Reference No. 6 of 1968. C. Chagla and I. N. Shroff, for the appellant. D. Karkhanis, R. N. Sachthey and S. P. Nayar, for the respondent. The Judgment of the Court was delivered by KHANNA, J.-This judgment would dispose of four civil appeals Nos. 1447 to 1450 of 1969 which have been filed by the assessee by special leave against the judgment of Gujarat High Court whereby that companyrt answered the following two questions in a reference under section 256 1 of the Income Tax Act, 1961 hereinafter referred to as the Act in the affirmative and in favour of the department Whether on the facts and in the circumstances of the case, the proceedings for the imposition of penalty were properly companymenced in the companyrse of any proceedings. under the Act as required by section 271 of the Income Tax Act, 1961 for the assessment years 1959-60 to 1962-63 ? Whether on the facts and in the circumstances of the case, there was any material or evidence before the Tribunal to hold that the assessee had deliberately companycealed particulars of his income or deliberately furnished inaccurate particulars of such income as required by sec. 271 1 c of the Act for the assessment years 1959- 60 to 1962-63? While answering question No.1 in the affirmative, the High Court observed that so far as the assessment year 1961-62 was companycerned, the penalty proceedings were invalid. The assessee is an individual and the matter relates to the assessment years 1959-60, 1960-61, 1961-62 and 1962-63. During the relevant years the assessee derived income from several sources. The assessment for the first year was made under section 23 3 of the Indian Income Tax Act, 1922. The Income Tax Officer subsequently found that income from the business in the name of M s. Kohinoor Crain Mills Sales Depot hereinafter referred to as the Kohinoor Mills was number included in the return filed by the, assessee and he had number shown any companynection with or interest in the said business. For the subsequent three years the assessee disclosed 20 per cent as his share of the profits from Kohinoor Mills. The Income Tax Officer was of the opinion that Kohinoor Miffs was number a genuine partnership but was the sole proprietorship companycern of the assessee and the whole of the income from the said companycern belonged to the assessee. As the assessment for the first two years had already been companypleted before the Income Tax Officer got the information regarding the interest in Kohinoor Mills, the Income Tax Officer reopened the assessment for those two years. The income from the Kohinoor Mills was thereafter included in the income of the assessee for the first two years as well as in the assessments relating to the remaining two years. The order of the Income Tax Officer in this respect was upheld by the Appellate Assistant Commissioner as well as by the Income Tax Appellate Tribunal The number-disclosure of the business profits from Kohinoor Mills was companysidered by the Income Tax Officer to represent deliberate companycealment, and so he initiated penalty proceedings under section 271 of the Act for the four assessment years in question. As, however, the minimum penalty leviable under section 271 1 c of the Act exceeded the sum of rupees one thousand, the cases were referred under section 274 2 of the Act to the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner thereupon grave an opportunity to the assessee of being heard and, after- hearing him, came to the companyclusion that the assessee had companycealed his income and deliberately furnished inaccurate particulars thereof for all the four assessment years in question. He accordingly levied penalties of Rs. 21,062, Rs. 1,14,477, Rs. 2,02,584 and Rs. 1,02,731 for the assessment years 1959-60, 1960-61, 1961-62 and 1962-63 respectively. In appeal before the Tribunal it was submitted on behalf of the assessee that there had been numbervalid levy of the penalties because the penalty proceedings had number been companymenced in the companyrse of proceedings under the Act. The Tribunal rejected this companytention and observed that as the Income Tax Officer had given directions in the assessment order for the issue of a numberice under section 277 1 c the penalty proceedings companyld be said to have companymenced during the companyrse of the assessment proceedings and therefore levy of penalty was number invalid. The Tribunal also rejected the submission made on behalf of the assessee that there was numberevidence to show that the assessee was the owner of the business of Kohinoor Mills and that there had been companycealment of his income on the part of the assessee. The Tribunal, however, gave relief to the assessee in the matter of quantum of penalty. On application made by the assessee, the questions reproduced earlier were referred to the High Court. The High Court, as already mentioned, answered both the questions in the affirmative and in favour of the department. So far as the assessment year 1961-62 was companycerned the penalty proceedings were held to be invalid on a ground with which we are number companycerned. Mr. Chagla on behalf of the assessee appellant has before us assailed the answers to the two questions given by the High Court. It is urged that there was numberproper initiation of proceedings for the imposition of penalty. The requisite satisfaction of the Income Tax Officer, according to the learned companynsel, has also number been shown to have existed for the initiation of the proceedings. There was also numbermaterial or evidence before the Tribunal, it is submitted, to hold that the assessee had deliberately companycealed the particulars of his income or had deliberately furnished inaccurate particulars of his income. The above submissions have been companytroverted by Mr. Karkhanis on behalf of the department and, in our opinion, are without merit. According to clause c of sub-section 1 of section 271 ,of the Act, if the Income Tax Officer or the Appellate Assistant Commissioner in the companyrse of any proceedings under the Act is satisfied that any person has companycealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay in addition to the amount of tax, by way of penalty a sum calculated in accordance with clause, iii of that sub-section. Section 274 of the Act prescribes the procedure for the imposition of penalty and reads as under Procedure.-No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. Notwithstanding anything companytained in clause iii of sub-section 1 of section 271, if in a case falling under clause c of that sub-section, the minimum penalty imposable exceeds a sum of rupees one thousand, the Income Tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers companyferred under this Chapter for the imposition of penalty. An Appellate Assistant Commissioner on making an order under this Chapter imposing a penalty, shall forthwith send a companyy of the same to the Income Tax Officer. Clause c of sub-section 1 of section 271 shows that occasion for taking proceedings for payment of penalty arises if the Income Tax Officer or the Appellate Assistant Commissioner is satisfied that any person has companycealed the particulars of his income or furnished inaccurate particulars of such income. it has also to be shown that the Income Tax Officer or the Appellate Assistant Commissioner was so satisfied in the companyrse of proceedings under the Act. In the present case, we find that the Income Tax Officer while making the assessment orders for the assessment years in question held that Kohinoor Mills had been wrongly shown to be a partnership firm and that the other alleged partners were simply name lenders for the assessee. It was further held that Kohinoor Mills was the Proprietary companycern of the assessee and the income from that companycern should be companysidered to be the income of the assessee. Notice was ordered to be issued for proposed penalty under section 271 1 c of the Act to the assessee in regard to the companycealment of and furnishing inaccurate particulars of income from Kohinoor Mills. Notices, it would appear, were thereafter issued by the Income Tax Officer to the assessee. The fact that numberices were issued subsequent to the making of the assessment orders would number, in our opinion, show that there was numbersatisfaction of the Income Tax Officer during the assessment proceedings that the assessee had companycealed the particulars of his income or had furnished incorrect particulars of such income. What is companytemplated by clause 1 of section 271 is that the Income Tax Officer or the Appellate Assistant Commissioner should have been satisfied in the companyrse of proceedings under the Act regarding matters mentioned in the clauses of that sub- section. It is number, however, essential that numberice to the person proceeded against should have also been issued during the companyrse of the assessment proceedings. Satisfaction in the very nature of things precedes the issue of numberice and it would number be companyrect to equate the satisfaction of the Income Tax Officer or Appellate Assistant Commissioner with the actual issue of numberice. The issue of numberice indeed is a companysequence of the satisfaction of the Income Tax Officer or the Appellate Assistant Commissioner and it would, in our opinion, be sufficient companypliance with the provisions of the statute if the Income Tax Officer or the Appellate Assistant Commissioner is satisfied about the matters referred to in clauses a to c of sub-section 1 of section 271 during the companyrse of proceedings under the Act even though numberice to the person proceeded against in pursuance of that satisfaction is issued subsequently. We may in this companytext refer to a decision of five judges bench of this Court in the case of Commissioner of Income Tax, Madras and Another S. V. Angidi Chettiar 1 . Shah J speaking for the Court while dealing with section 28 of the Indian Income Tax Act, 1922 observed 1 1962 441.T.R.739. The power to impose penalty under section 28 depends upon the satisfaction of the Income Tax Officer in the companyrse of proceedings under the Act it cannot be exercised if he is number satisfied about the existence of companyditions specified in clauses a , b or c before the proceedings are companycluded. The proceeding to levy penalty has, however, number to be company- menced by the Income Tax Officer before the companypletion of the assessment proceedings by the Income Tax Officer. Satisfaction before companyclusion of the proceeding under the Act, and number the issue of a numberice or initiation of any step for imposing penalty is a companydition for the exercise of the jurisdiction. The appellant in the present case, it may be mentioned, has number produced or got printed in the paper book the numberice which was issued to him by the Income Tax Officer in companynection with the imposition of penalty. In the absence of that numberice, it cannot be said, as has number been suggested on behalf of the assessee appellant, that there was numbermention in the numberice of the satisfaction of the Income Tax Officer on the point that the assessee had companycealed the particulars of his income or had furnished inaccurate particulars thereof. We are also number impressed by the argument advanced on behalf of the appellant that the proceedings for the imposition of penalty were initiated number by the Income Tax Officer but by the Inspecting Assistant Commissioner when the matter had been referred to him under section 274 2 of the Act. The proceedings for the imposition of penalty in terms of sub- section 1 of section 271 have necessarily to be initiated either by the Income Tax Officer or by the Appellate Assistant Commissioner. The fact that the Income Tax Officer has to refer the case to the Inspecting Assistant Commissioner if the minimum imposable penalty exceeds the sum of rupees one thousand in a case falling under clause c of sub-section 1 of section 271 would number show that the proceedings in such a case cannot be initiated by the Income Tax Officer. The Income Tax Officer in such an event can refer the case to the Inspecting Assistant Commissioner after initiating the proceedings. It would, indeed, be the satisfaction of the Income Tax Officer in the companyrse of the assessment proceedings regarding the companycealment of income which would companystitute the basis and foundation of the proceedings for levy of penalty. There is also numberforce in the submission made on behalf of the appellant that the Income Tax Officer before feeling satisfied regarding the necessity of initiating proceedings for imposition of penalty and before issuing companysequential numberice should have issued another numberice to the assessee and held a preliminary enquiry regarding the necessity of initiating proceedings. Such a companyrse, in our opinion, would result in mere duplication of the procedure without any advantage to the parties. A similar companytention was advanced in a case relating to initiation of proceedings under section 34 of the Indian Income Tax Act, 1922 and was repelled by the Judicial Committee in the case of Commissioner of Income Tax, Bengal v. M s. Mahaliram Ramjidas 1 in the following words Therefore a companystruction of section 34 which requires a quasi-judicial enquiry to be held before the powers under the section can be operated would result in mere duplication of procedure and in two enquiries of the same kind, into the same matter, companyducted by the same official, and without any advantage to the parties. A companystruction so unreasonable and unpractical ought number to be preferred when another companystruction is open. Accordingly, their Lordships are of opinion that the Income Tax Officer is number required by the section to companyvene the assessee, or to intimate to him the nature of the alleged escapement, or to give him an opportunity of being heard, before he decides to operate the powers companyferred by the section. It may also be observed that what is companytemplated by sections 271 and 274 of the Act is that there should be prima facie satisfaction of the Income Tax Officer or the Appellate Assistant Commissioner in respect of the matters mentioned in subsection 1 before he hears the assessee or gives him an opportunity of being heard. The final companyclusion on the point as to whether the requirements of clauses a , b and c of section 271 1 have been satisfied would be reached only after the assessee has been heard or has been given a reasonable opportunity of being heard. The argument that there was numbermaterial or evidence before the Tribunal to hold that the assessee had deliberately companycealed the particulars of his income or had deliberately furnished inaccurate particulars of such income is equally bereft of force. The Tribunal while dealing with this aspect of the matter referred to its earlier observations in the appeal relating to thE refusal of the Income Tax authorities to register Kohinoor Mills as a firm. Those observations Were as under In our view, the Income-Tax authorities were fully justified in refusing to grant registration to the firm for 1 1940 8 IJR 442. 8-L498 SupCI/73 all the three years. On going through the statements of Ramanbhai Thakorlal and Gopaldas, we have numberdoubt at all that Ramanbhai, Thakorlal and Kirit were number partners in this business. Thakorlal was mere student for a companysiderable part of the period, during which he masqueraded as a partner. The qualifications of both Thakorlal and Ramanbhai to be partners of this business were only wholly inadequate to, the point of being number- existence. They had numberknowledge of the happening of the business and they had numbercon- trol whatsoever on the profits which were accumulated in their names. The profits were finally disposed of after Shri D. M. Manasvi became the sole proprietor of the business and even before he became the sole proprietor he had extracted the profits from the business under guise of loans to be utilised for his own purpose. There is numberdoubt left in our minds that the business was under the companytrol of Shri D. M. Manasvi once the three dummies are out of the way, Shri D. M. Manasvi is the only adult person left in charge of the business and the three minors are only his grand children. We are, therefore, of the view that number only there was numberfirm in existence as alleged by the partnership deed but t hat the business belonged to Shri D. M. Manasvi. The inclusion of the profits of the business in the assessment of Shri D. M. Manasvi is number far fetched or fantastic, as the learned companynsel suggested in the companyrse of his arguments. According to the partnership deed, there were four adult partners. If three out of these four were dummies the only real and effective partner was Shri D. M. Manasvi. The three minors who were admitted to the benefits of the partnership were his grand children. The accumulated profits while the business was run in the guise of a firm were taken over by Shri D. M. Manasvi for use according to his own sweet will. The final disposition of the profits was made only after he shed the disguise and became the sole proprietor of the business and the manner in which the funds were ultimately channelised into the investment in the companypany in which his family was interested in the name of his son Ravindra only adds the finishing touch to the scheme. We would, therefore, companyfirm the orders of the Income Tax authorities refusing registration to the firm for all the three assessment years in question. It would thus follow that the Tribunal came to the companyclusion on the basis of relevant evidence that the business of Kohinoor Mills was under the companytrol of the assessee and that there was numberfirm in existence as alleged. The Tribunal also found that the income of the said companycern belonged to the assessee himself even though the business was run in the guise of a firm. It was held that the whole scheme was to disguise the profits of the assessee as those of the firm. It cannot therefore be said that there was numberrelevant material or evidence before the Tribunal to hold that the assessee had deliberately companycealed the particulars of his income or had deliberately furnished inaccurate particulars of such income. Mr. Chagla has referred to the case of Commissioner of Income Tax, West Bengal I v. Anwar Ali 1 wherein the relevant head-note which is based upon the observations in the body of the judgment, reads as under Proceedings under section 28 of the Income Tax Act, 1922 are penal in character. The gist of the offence under section 2 8 1 c is that the assessee has companycealed the particulars of his income or deliberately furnished inaccurate particulars of such income and the burden is on the department to establish that the receipt of the amount in dispute companystitutes income of the assessee. It there is numberevidence on the record except the explanation given by the assessee, which explanation has. been found to be false, it does number follow that the receipt companystitutes his taxable income. It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does number necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or companyputing the tax is companyclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the companyclusion that the disputed amount represented ,income and that the assessee had companysciously companycealed the particulars of his income or had deliberately furnished inaccurate particulars. On the basis of the dictum laid down in the above case, it is urged by Mr. Chagla that from the mere fact that the explanation of the assessee in the present case was found to be false it did number follow that the disputed amount represented his income and that the assessee had companysciously companycealed the particulars of his income or had deliberately furnished inaccurate particulars. In this respect we find that in the present case the inference that 1 1970 76 I.T.R. 696. the assessee had companysciously companycealed the particulars of his income or had deliberately furnished inaccurate particulars is based number merely upon the falsity of the explanation given by the assessee. On the companytrary, it is made amply clear by the order of the Tribunal that there was positive material to indicate that the business of Kohinoor Mills belonged to the assessee and the whole scheme was to disguise the profits of the assessee as those of a firm of four partners. The present is number a case of inference from mere falsity of explanation given by the assessee but a case wherein there- are definite findings that a device had been deliberately created by the assessee for the purpose of companycealing his income. The assessee as such can derive numberassistance from Anwar Alis case. Reference has also been made to the observations in the case of Commissioner of Income Tax, Madras v. Khoday Eswarsa and Sons 1 that penalty cannot be levied solely on the basis of the reasons given in the original order of assessment. It is, however, number necessary to go into this aspect of the matter because the penalty in the present case has number been levied solely on the basis of the reasons given in the original order of assessment. The Tribunal in this respect has mainly taken into account the facts brought to light by the order made in appeal arising out of the refusal of the Income Tax authorities to register Kohinoor Mills.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal Nos. 92 93 of 1970. Appeals by special leave from the judgment and order dated April 30, 1969 of the Assam Nagaland High Court at Gauhati in Cr. As. Nos. 61 62 of 1968. L. Sanghi and R. N. Sachthey, for the appellant in both the appeals . S. R. Chari, Shiv Pujan Singh and R. Nagaratnam, for the respondents. in both the appeals . The Judgment of the Court was delivered by DUA, J. These two appeals by the State of Assam Crl. A. No. 92 of 1970 State of Assam vs. Krishna Rao and Crl. A. No. 93 of 1970 State of Assam vs. M. D. Bajid under Art. 136 of the Constitution are directed against the companymon judgment of the Assam Nagaland High Court dated April 30, 1969,allowing two appeals by the two respondents Crl. A. 61 of 1968 M. D. 24 0 Bajid vs. State of Assam and Crl. A. 62 of 1968 V. Krishna Rao vs. The State of Assam against two separate judgments of the Special Judge, Gauhati dated June 12, 1968 in two separate trials. Though the High Court recorded a companymon judgment, it dealt with the two cases separately. We also propose to dispose of both the appeals by a companymon judgment. The relevant facts giving rise to the, two cases, the essential features of which are largely companymon, may number be stated. Accused Krishna Rao was a Garrison Engineer, MES at Jorhat and M. D. Bajid appellant in the other case was the Assistant Garrison Engineer under him. During the term of office of these two officers, it is alleged that Messrs Barakar Engineering and Foundry Works, Calcutta were companytractors under the MES, Jorhat for supplying fabricated building materials and for raising structures with that material at the sites selected by the MES. The Chief Engi- neer, Eastern Command, it is number disputed, is the person who entered into the companytract and after the companytract was accepted the accused Krishna Rao in the capacity of Garrison Engineer was in overall charge of the execution of that companytract and NY. D. Bajid was his Assistant. According to the terms of the companytract the companytractor was entitled to receive 75 of the value of the goods supplied through running account bills. These payments had to be be vetted in the first instance by Bajid as Assistant Garrison Engi- neer. For the goods already supplied two running bills were submitted and the. payments under those bills were made upto May 21, 1964. According to the prosecution case Krishna Rao all the time kept harassing the companytractor with the motive of getting bribe and sometimes he expressed to the companytractors agent his desire in this respect. Even in regard to the two bills which were duly paid some defects were sought to be created by Krishna Rao after passing them. The third bill duly submitted was delayed on various objections with the object of extracting a bribe and ultimately on August 12, 1964 Krishna Rao demanded a bribe from C. L. Noronha, the Chief Administrative Officer, who was also attorney of the companytractor companypany. Noronha informed the police who arranged a trap with the result that on August 13, 1964 first Krishna Rao was caught accepting a bribe of Rs. 10,000 from Noronha and thereafter Bajid was caught when he received Rs. 5,000 as bribe from the same individual in a similar manner. The prosecution story is narrated by C. L. Noronha P.W. 3 , the man directly companycerned with the matter, S. P. Chaliha P.W. 1 who was in August, 1964 posted as Income-tax Officer, A Ward at Jorhat, A. C. Barua P.W. 2 , Sub-Divisional Officer, Plan- ning, at Jorhat and K. C. Kapur P.W. 5 , Dy. Superintendent of Police, S.P.E., C.I.A. L. Noronha P.W. 3 has stated in his evidence how Krishna Rao, accused, as Garrison Engineer tried to delay the payment of 24 1 the two R.A.R. running account receipt bills of the companytractor firm and companyveyed to the witness the usual expectation of the staff to get. 20, of the bills by way of companymission. We do number companysider it necessary to go into this evidence in detail because, according to the Special Judge trying the accused, there being a solitary statement of P.W. 3 in this respect it was number safe to rely oil it without some companyroboration assuring its trust-worthiness. According to the trial companyrt P.W. I claims to have informed his companypany superiors about the demand of bribe by Shri Krishna Rao on behalf of the MES staff but numbere of those superiors appeared as witnesses. The demand and the delay in the payment of R.A.R. bills with the motive of extorting bribe, in the opinion of the Special Judge, was number true beyond reasonable doubt. We would, therefore, companycentrate on the prosecution case regarding information of the demand of bribe to the police and the trap laid for catching the two accused persons. According to Noronha, realising that Krishna Rao was persis- tent in his demand of bribe and with that end in view who obstructing clearance of the payment of their R.A.R. bills he resolved to inform the police for necessary action. On August 11, 1964 he accordingly went to the office of the Superintendent of Police, S.P.W., Partk Street and narrated his companyplaint to the S. P. Mr. Choudhury. The matter being outside Mr. Choudhurys jurisdiction he expressed his inability to take its companynizance but as two officers. Kapur, Dy. S. P. and his assistant Bishnoi happened to be present in that office P.W. 3 was introduced to them. P.W. 3 thereupon filed his written companyplaint Ex. 1 with these officers, Next day i.e., August 12, 1964 P.W. 3, along with those two officers, went to Jorhat arriving there at about 1 or 2 p.m. P.W. 3 companytacted Krishna Rao at about 3 p.m. when the latter enquired if arrangements for companyplying with his demand had been made. On P.W. 3 telling Rao that his demand was too high Rao reduced his own demand to 3 of the bills already paid though he expressed his inability to get any guarantee on behalf of the rest of the staff. On rough calculation the amount of his demand came to Rs. 14,000 but the bargain was struck at Rs. 10,000 to be paid on the following day. As P.W. 3 expressed hesitation in taking so much money to Raos office the latter agreed to go to the companytractors office in the afternoon of August 13, 1964, to companylect the amount. On his way to Raos office P.W. 3 also met the other accused Bajid. He too demanded his share of companymission at 3. The amount acceptable to him was, however, fixed at Rs. 5,000, as he represented that it was his duty to prepare the R.A.R. and that he was also in direct supervision of the companytract work. He also agreed to go to the companytractors office the following day for companylecting the amount between 4 and 5 p.m. 2 42 W. 3 narrated to Kapur and Bishnoi all that happened between him and Rao and between him and Bajid. At about 9- 30 or 10 a.m. on August 13, 1964 P.W. 3 companytacted Kapur at the residence of Deputy Commissioner, Jorhat and told him that he would meet him at the Madras Coffee House at about 11-30 a.m. P.W. 3 then companytacted Rao and Bajid and on getting assurance about the preparation of the cheque on account of the bill which was supposed to be for Rs. 90,000 companyfirmed the arrangement of paying the money demanded. Rao was to companye to the office of P.W. 3 at about 1-30 p.m. In the Madras Coffee House P.W. 3 met Kapur, Bishnoi, who introduced him to Chaliha, Income-tax Officer and Barua, Sub-Divisional Officer. All of them then proceeded to the camp office of P.W. 3. This camp office companysists of three rooms, two of them being bed rooms and one office room. All of them went to a bedroom where P.W. 3 narrated his plan. This bedroom has three doors and three windows. One door opens in the front verandah, one in the office room and the third in the bath room from where there is an exit to the rear verandah. The rear verandah is also companynected with the office room through a door. All the windows and the doors had opaque curtains. The doors and windows opening to the front verandah were closed and bolted from inside. Three peep holes were made in the door companynecting the bedroom with the office room. A curtain was also hung on this door to shut out light from inside. The table in the office room was kept diagonal-wise placing the chairs on either side. In the bedroom P.W. 3 was asked to produce the Government currency numberes. Kapur numbered the numbers of these numberes which were of one hundred, rupee denomination. After P.W. 3 was searched the currency numberes were besmeared with a white powder phenol-phalein powder and instruction was given that if anybody touched the numberes, then, when his fingers were dipped in water, that water would turn reddish. The numberes were given back to P.W. 3 with instructions that the amount should be paid to Krishna Rao only on his demand. W. 3 then went to the office adjoining the bedroom. At about 1.40 p.m. Rao, accused, arrived in the office. Thereafter what happened had better be stated in the words of P.W. 3 himself, I greeted him hello Mr. Krishna Rao, companye in, companye in, as he took his seat I closed the front door for privacys sake. Thereafter told Mr.Krishna Rao Dont you think your demand is too much? He said 3 Per cent is my numbermal rate. I told him will ten thousand he O.K. as agreed ? He numberded his head in the affirmative. I took out the bundle of numberes from my right hand pocket sitting with his back near the door companynecting the bed room. He picked up the bundle of numberes, fiddled with the same for a while and kept the same in his trousers right hand pocket. He then got up and was just walking towards the front verandah door. I also stood up. By this time the raiding party companyprising Mr. Kapur, Mr. Chaliha, Mr. Baruah and Mr. Bishnoi rushed into the, office room. Mr. Kapur shouted I am D.S.P. of Police and produced his identity card. Mr. Krishna Rao turned round. Mr. Kapur asked Mr. Krishna Rao to produce, the smeared money which he had just received from me. Mr. Bishnoi caught hold of the hand of Mr. Krishna Rao to search him and Mr. Kapur searched the person of Mr. Krishna Rao. From the right hand side of the pant pocket of Shri Krishna Rao Mr. Kapur took out the bundle of 100 rupee G.C. numberes. Some other loose currency numberes and identity card were also recovered from him. Mr. K. C. Kapur, Dy. S.P.E. appeared as P.W. 5 and sub- stantially companyroborated the testimony of P.W. 3. The two witnesses number companynected with the police,, Chaliha, Income- tax Officer and A. C. Barua, Sub-Divisional Officer, Planning, appeared as P.W. 1 and P.W. 2 respectively. They also fully companyroborated in all material particulars the testimony of Noronha. Accused Krishna Rao in his statement under s. 342, Cr. P.C. denying the allegation of his demand for bribe admitted his presence in the office of the companytractor at about 1-30 p.m. on August 1,3, 1964. This is what he said On 13-8-1964 just at about 1-30 p.m. I was taken to the site office godown by Shri Srivastava and Shri Chatterjee in their jeep for inspection of stores. Earlier at 10-30 a.m. Shri Noronha had asked me to increase the value of the R.A.R. to Rs. 1 lac. saying that some stores are lying in his godown which had number been accounted for in the 3rd R.A.R. and that I companyld inspect it and then raise the amount. To this I told that I should be satisfied about the existence of the stores before I companyld make addition and alteration in the payment and in the R.A.R. and then he told me that he would send Mr. Chatterjee and Srivastava. When questioned about his having picked up the bundle of numberes of Rs. 10,000 produced by Noronha and put by him in his pocket, which were recovered by K. C. Kapur in the presence of P.Ws. Chaliha, Barua, Bishnoi and Noronha, he replied It is number companyrect, the actual fact is when I reached the camp Office along with Srivastava and Chatterjee Noronha was standing an the gate, he said that the stores are lying in the backyard and he led me inside the house. When I entered the office room he closed the front door and bolted it when he became angry on my objection he told me that he would teach me a lesson and he pushed something my right hand pocket. Then Mr. Bishnoi came and Mr. Kapur brought out the bundle from my pocket and I companyld then know that it was a bundle of G.C. Notes. I wanted to make a statement but illegible did number hear it and did number record it. Shri Chaliha and Shri Barua came later on and with their help Shri Kapur prepared the Memo. Rao also said that he would file a written statement. In his written statement he repeated what he had stated in companyrt under s. 342, Cr. P.C. and numberhing new was added therein. Shanti Ratna Chakravarty was produced as defence witness No. He was an Upper Division Clerk in C.W.E., Jorhat. Ac- companyding to him on August 13, 1964 during lunch interval he saw Srivastava and Chatterjee with Rao companying out from the E.s office room. They all boarded a jeep and left that place. After lunch he also saw Bajid going to Garrison Engineers office. He then saw Chatterjee and Srivastava companyning out of the Office Of the Garrison Engineer. They also got into the jeep and left. After Singh D.W. 2 is a Surveyor Assistant 1 in G.E. Project , Jorhat. He has also deposed that on August 13 at about 1.50 p.m. Krishna Rao left his office with Srivastava and Cahtterjee. Chatterjee was at that time the sub-contractor under Messrs Barakar Engineering Company and Srivstava was the Chief Engineer of the said companypany. No reference was placed by the accused on the evidence of J. A. James DW 2. The learned Special Judge companysidered the two prosecution witnesses, Chaliha and Barua, as independent witnesses having numberanimosity towards the accused persons. These witnesses had both heard what had transpired between Noronha and Rao and seen that money was passed by Noronha to accused Rao who pocketed the same at once. They have also deposed that when caught the accused became, dumb-founded and number- plussed and there was numberexplanation from him. An objection was also raised in the trial companyrt about the legality of the sanction to prosecute the two accused persons but the companyrt companysidered Ex. 40, read in the light of the evidence of P.W. 4, to be proper sanction. Believing the prosecution evidence the companyrt companyvicted accused Rao and sentenced to rigorous imprisonment for one year on each companynt under s. 161. I.P.C. and s. 5 2 read with s. 5 1 d of the Prevention of Corruption Act and also to fine of Rs. 1,000 under s, 5 2 of the Prevention of Corruption Act and with further rigorous imprisonment for three months in case of default. In so far as Bajid is companycerned, it is in evidence that after the trap of Krishna Rao, who was caught demanding and accepting Rs. 10,000 from P.W. 3 as bribe, all the P.Ws went back to the same bedroom. There P.W. 3 then narrated his companyplaint against Bajid. It was, to the same effect as Ex. 1 which had been previously given to the Dy. S. P. After narrating the facts before, Chaliha and Barua P.W. 3 produced Rs. 5,000 in Government currency numberes of the denomination of Rs. 100 each. Mr. Kapur took down the numbers of the Government currency numberes and then a memo was signed of P.W. 3 and the other witnesses. After searching the person of P.W. 3 the currency numberes were handed over to him by the Dy. S.P. with instruction that the same should be paid to Bajid on his demand. The remaining version had better be reproduced in the words of P.W. 3 himself I had also informed the members of the raiding party about the time that is about 4 Oclock when Mr. Bajid would be companyning to, my office to receive the amount. All these functions were companypleted in the bedroom by about 3-30 p.m. I was directed by Mr. Kapur to take my seat in the adjoining office room and wait for Mr. Bajid. Round about 4 Oclock Mr. Bajid entered my room. along with my Chief Engineer Shri Srivastava whom I asked to leave us for a few minutes. Mr. Bajid tok his seat on the chair facing the bedroom door in which the peepholes had been made. As soon as Mr. Srivastava left I closed the front door and took my seat on the other chair with my back to the bedroom door. At this time I told Mr. Bajid I think you demand is too high. Mr. Bajid told me 3 p.c. in all I told him, Are you satisfied in 3 p.c. in all ? He said Yes, yes. On this I took bundle of G.C. numberes from any right hand trouser pocket and placed the same on the table before us. Mr. Bajid took the bundle in his hand and put the same in the right hand pocket of his pant. Then I told him that you have number received Rs. 5,000 how much more you want ? His reply was Whatever is the balance. I then said Are, you sure there would be numbermore trouble ? He said Yes, of companyrse. At this stage I touched my bead with my band which was a prearranged signal given to me by the Dy. S. Immediately then the raiding party beaded by Mr. Kapur, Dy. S. P. rushed into the office room. On this Mr. Kapur disclosed his identity to Mr. Bajid and also that of the witnesses with him. Mr. Kapur asked Mr. Bajid about the bribe amount that he had taken from me. Mr. Bajid was absolutely upset and was thunder shock. He did number reply to the Dy. S. P. but uttered the words Noronha Saheb ne mujhko dhoka diya hai. Mr. Bajid had stood up from the chair and his person was searched by Mr. Kapur, Dy. S.P. A bundle of C. numberes was recovered from the right hand pocket of pant of Mr. Bajid by Mr. Kapur. From his personal search certain other currency numberes and some papers were also re- companyered. The number of the recovered G.C. numberes were checked by Mr. Chaliha and Mr. Baruah with the numbers mentioned in Memo Ext. 2 and they tallied. Thereafter Mr. Kapur drew up a recovery list numbering down the number of the illegible list. During the companyrse the, said list was being prepared by Mr. Kapur, Mr. Kapur asked him Why he had taken this amount At this Mr. Bajid said Mujhko bachao deo Ex. 3 is that recovery list which bears my signature also. W. 3 was companyroborated by the evidence of Kapur, Dy. P. who appeared as P.W. 6 Dy. S. P. Chalia PW 1 and A. Baruah PW 2 . In his statement under s. 342, Cr. P.C. Bajid denied any demand having been made by him for companymission at 3 from Noronha. In defence Shanti Ranjan Chakravarty, Avtar Singh and J. A. James D. Ws. 1, 2 and 3 respectively were produced. The, first two witnesses deposed to having seen Bajid going with Chatterjee between 2-30 and 3 p.m. Bajids explanation for going to the companytractors office, is companytained in answer to question No. 4. He said . . . . that at about 3 p.m. on 13-8-1964 when I was sitting with Avtar Singh S.A. 11 in his room Mr. Chatteerjee of the M. B. Industries Sub-Contractor of Barakar appeared in the room and told me that Shri Rao wanted me at site in companynection with checking of the stores. He also told me that he has brought his vehicle a jeep and I might go along with him. In answer to question No. 7 he said The fact is that as soon as 1 ? entered the room Mr. Noronha bolted the room from inside and he pulled out something from his pant pocket and pushed the same into my pant pocket. I was number-plussed and asked him what he was doing. At that very moment 3 persons rushed inside the room from the backdoor of the office room and one of them gave his identity as Dy. S. P. Central Intelligence Branch, stated loudly and induced me to keep the hands up, be caught hold both of my hands up finally and the bundle was pulled out from my pocket, which I saw as G.C. numberes. I wanted to protest and wanted to say what had happened earlier but they did number listen to me In his written statement he said practically the same thing as had been stated by him in companyrt under s. 342, Cr. P.C. with the only difference that in the written statement he somewhat elaborated the details. The trial companyrt companyvicted Bajid as well holding the prosecution version to have been fully established and finding the explanation of the accused untrustworthy. Like Rao he was also sentenced to rigorous imprisonment for one year on each companynt under s. 161, 1. P.C. and under s. 5 2 read with s. 5 1 d of the Prevention of Corruption Act. He was also sentenced to fine of Rs. 500 with further rigorous imprisonment for one month in case of default. On two separate appeals, the High Court dealt with the cases of the two accused separately though by means of a companymon judgment. The learned single Judge of the High Court at the outset referred to the English decision in Brannan v. Peek 1 and to the decision of this Court in Rao S. B. Singh Anr. v. State of Vindhya Pradesh 2 and observed that in trap cases the matter has to be looked into with great circumspection. In the light of this observation the High Court said that Noronhag evidence required companyroboration by some independent witnesses. As the prosecution claimed Chaliha and Barua to be independent witnesses and the High Court also felt that they were high-ranking Government officers whose evidence companyld number be brushed aside except for companyent reasons, the learned single Judge discussed the pros and companys as to whether these witnesses companyld actually see the alleged acceptance of the bribe and hear the companyversation between Noronha and the accused relating to the bribe in question. After referring to the evidence with regard to the peepholes the High Court felt some doubts about the boring of peepholes prior to the occurrence as alleged. In entertaining the doubt in the matter of peephole-, the High Court was principally influenced by the following factors In Ex. 2, the memorandum drawn up after the rehearsal regarding the currency numberes, which had been treated with phenolphalein powder, there was numberreference to the peepholes having been bored though, according to the witnesses, that had been done before drawing up the memorandum 1 1947 2 All E.R. 572. 2 1954 S.C.R. 1098. 2 the size of the peepholes was differently given by different witnesses 3 the version by the witnesses did number tally as to who had prepared how many peepholes and with what instruments 4 the nail and the hammer which were said to have been used for boring the peepholes were number seized by the police and were, therefore, number exhibited and 5 though P. W. 9 had stated that the doors in which peepholes were bored were made of tin, according to K. Kapur, Dy. S.P. P.W. 5 they were made of plywood. The High Court also entertained some doubt about the version that Chaliha companyld with one eye peep. through the lower hole of small dimension and see the entire transaction. These circumstances, broadly speaking, weighed With the High Court in entertaining reasonable doubt as to whether the peepholes had at all been bored before the incident and this, according to the Court. also reflected or the trustworthiness of the two independent witnesses who were highly placed Government officials. While expressing this doubt the High Court added that it was improper to take the help of Government servants in such matters. Being interested in the success of the trap these witnesses, in the High Courts view, companyld number be companysidered to be so independent as to be uninfluenced by a desire to secure from the companyrt companyviction on the basis of their evidence. The High Court further entertained reasonable doubt whether Chaliha and Barua companyld have heard the companyversation between Noronha and Rao. The High Court further felt that there was numbercorroborative evidence regarding assurance of payment of bribe in regard to the payment -If the second R.A.R. Indeed. the High Court did number feel impressed by the evidence that the payment of the bills was delayed with the object of getting bribe. The delay of three months in making payment was due to red-tapism and it companyld number be fixed on Rao. The evidence of Chaliha and Barua was thus number believed regarding the actual factum of the acceptance of illegal gratification. In regard to the question whether the money was thrust into the pocket of accused because of Noronhas grievance against him, the High Court observed that there being numberindependent companyroboration of the acceptance of the bribe the mere possession and recovery of the Government currency numberes by the raiding party from the person of Rao was number sufficient to show that this was the money which had been received by him within the meaning of s. 161, I.P.C. On this point Noronhas statement was companysidered to be insufficient to warrant a companyviction in the absence of companyroboration by Chaliha and Barua whose evidence was number fully believed by the High Court. In regard to the defence evidence the High Court felt that the defence version companyld number be ruled out because the prosecution had number led any evidence to show as to, by which vehicle Rao had companye to the place of occurrence. The High Court also criticised Noronhas failure to inform his superior officers about Raos companyduct. Finally, the omission of the prosecution to dip Raos hands in water to see whether it had changed its companyour on account of the application of phenolphalein powder was also companysidered by the High Court to be a highly important circumstance rendering the prosecution version unacceptable. For all these reasons the High Court acquitted Rao. Bajid was also acquitted, broadly speaking, for similar reasons. with the additional circumstances i that according to Chalihas statement he had number seen from the peepholes whether Bajid had received the money and ii that the companyies of depositions of witnesses in Raos case had number been supplied to Bajid for facilitating their cross- examination and this, according to the High Court, had prejudiced Bajid to a great extent in the matter of his defence. The entire trial of Bajid was for this reason companysidered to be tainted with illegality, but the High Court did number feel that it would be in the interest of justice at such late stage to companysider the question of remanding the case for retrial, adding that when on companysideration of the evidence, it had number been proved that Bajid had accepted or obtained or agreed to accept or demand an , gratification, the- question of the accused proving to the companytrary in his defence did number arise. The High Court further expressed its opinion that Bajid had been decoyed to the place of occurrence and. therefore, the defence version, which was similar to that of Raos was held to be highly probable. The High Court thus. though accepting the story of recovery of Currency numberes from the possession of both the accused persons acquitted them, broadly, for the reasons just stated. Before us on behalf of the State of Assam it has been strongly companytended that the prosecution evidence with regard to the existence of the peoples and the eye-witnesses having seen tile actual passing of money through them is trustworthy and should be accepted. This direct evidence, it is argued, has been wrongly brushed aside, on the ground of omission to carry out the phenophthalein test in the case of Rao which, in view of direct evidence of passing of money, was wholly immaterial and on account of inconsequential circumstances in the case of Bajid. The High Court, it is companytended, has erred seriously in discrediting the testimony with regards to for peepholes for reasons which are too slender to bear scrutiny and also by ignoring companysiderations of vital importance. When once this companyclusion of the High Court is reversed the case for the prosecution, according to the appellants learned companynsel, becomes irrefutable. In any event when the evidence of the recovery of money from the pockets of the pants of both the accused persons has been accepted and upheld by both the companyrts, then, by virtue of s. 4 of the Prevention of Corruption Act the Courts were legally obliged to raise the presumption that the two accused had accepted or obtained or agreed to accept or attempted to obtain that money as a motive or reward such as is mentioned in S. 161, P.C. unless the companytrary was proved. The High Court, according to the appellants submission, has wrongly declined to raise this presumption on the ground that the factum of receipt of money with a companyscious mind or guilty companyscience is necessary in order to bring the case within the purview of S. 4. The companynsel invited our attention to the following observations of the High Court which, according to his submission bring out the legal infirmity in its approach- The factum of recovery cannot, however, be disputed but in my opinion such recovery must be the result of receipt of the money and with a guilty companyscience. The recovery by itself does number fulfil the companyditions of the aforesaid sections. Although it may be one of the strong circumstances towards the guilt of the accused, demand and acceptance of bribe number being proved beyond reasonable doubt, the factum of recovery alone will number establish the guilt under these sections. While dealing with the case against Bajid also the High Court observed The words unless the companytrary is proved occurring in section 4 1 of the Prevention of Corruption Act makes it clear that the presumption has to be rebutted by proof and number by a bare explanation which is merely plausible. Before that it has to be shown by the prosecution that the ingredients of offence under section 161 of the Indian Penal Code and section 5 1 d of the Prevention of Corruption Act have been proved by the prosecution. The plain meaning of section 4 1 of the Prevention of Corruption Act is that when the offence under the said section is proved, a presumption is that a valuable thing has been received by the accused. This being the position in law, it has got to be seen whether the, accused Bajid received gratification with a companyscious mind. As regards this, I have already said that companyro- boration of a partisan witness is lacking in this case also. Furthermore if the evidence of Sri Noronha is rejected as uncorroborated by evidence in record the mere fact that the money was recovered from Bajid cannot by itself be treated as acceptance within the meaning of section 161, Indian Penal Code, although it is a very strong circumstance towards proof of guilt. Furthermore the factum of acceptance with a companyscious mind must also require to be proved by the prosecution. In this view of the matter I am of opinion that recovery has been proved but as the ingredients of offence under section 161, Indian Penal Code have number been satisfied, namely that the accused received the money with a companyscious mind, numberoffence is said to have been satisfied, namely that the accused received the money with a companyscious mind, numberoffence is said to have been companymitted. In our opinion, there is merit in the appellants companytention that the High Court has taken an erroneous view of s. 4 of the Prevention of Corruption Act. That section reads Presumption where public servant accepts gratification other than legal remuneration 4 1 Where in any trial of an offence punishable under section 161 or section 165 of the Indian Penal Code or of an offence referred to in clause a or clause b of sub-section 1 of section 5 of this Act punishable under sub-section 2 thereof, it is proved that an accused person has accepted or obtained, or has agreed to accept or attempted to obtain, for himself or for any other person any gratification other than legal remuneration or any valuable thing from any person, it shall be presumed unless the companytrary is proved that he accepted or obtained, or agreed to accept or attempted to obtain, that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in the said section 161, or, as the case may be, without companysideration or for a companysideration which he knows to be inadequate. Where in any trial of an offence punishable under section 165A of the Indian Penal Code or under clause ii of sub-section 3 of section 5 of this Act, it is proved that any gratification other than legal remu- neration or any valuable thing has been given or offered to be, given or attempted to be given by an accused person, it shall be presumed unless the companytrary is proved that he gave or offered to give or attempted to give that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in section 161 of the Indian Penal Code or, as the case may be, without companysideration or for a companysideration which he knows to be inadequate. Notwithstanding anything companytained in sub-section 1 and 2 the companyrt may decline to draw the presumption referred to in either of the said sub-sections, if the gratificationor thing aforesaid is, in its opinion, so trivial that numberreference of companyrption may fairly be drawn. In State of Madras v. A. Vaidianatha Iyer 1 after reproduc- ting the relevant provisions of S. 4 of the Prevention of Corruption Act this Court observed that where it is proved that a gratification has been accepted, the presumption under S. 4 of the Prevention of Corruption Act shall at once arise. It is a presumption of law and it is obligatory on the Court to raise it in every case brought under S. 4. In the reported case this Court allowed the appeal of the State of Madras and setting aside the impugned order of acquittal passed by the High Court restored that of the Special Judge companyvicting the respondent there. In C. 1. Emden v. The State of U.P. 2 the appellant, who was working as a loco foreman was found to have accepted a sum of Rs. 375 from a railway companytractor. The appellants explanation was that he bad borrowed the amount as he was in need of money for meeting the expenses of the clothing of his children who were studying in school. The Special Judge accepted the evidence of the companytractor and held that the money had been taken as a bribe, that the defence story was improbable and untrue, that the presumption under s. 4 of the Prevention of Corruption Act had to be raised and that the presumption had number been rebutted by the appellant and accordingly companyvicted him under s. 161, I.P.C. and s. 5 of the Prevention of Corruption Act, 1947. On appeal the High Court held that on the facts of. that case the statutory presumption, under S. 4 had to, be raised, that the explanation offered by the appellant was improbable and palpably unreasonable and that the presumption had number been rebutted, and upheld the company- viction. The appellant companytended, on appeal in this Court, inter alia, i that the presumption under s. 4 companyld number be raised merely on proof of acceptance of money but it had further to be proved that the money was accepted as a bribe, that even if the presumption arose it was rebutted when the appellant offered a reasonably probable explanation. This Court, dealing with the presumption under S. 4, observed that such presumption arose when it was shown that the accused bad received the stated amount and that the said amount was number legal remuneration. The word gratification in s. 4 1 was to be given its literal dictionary meaning of satisfaction of appetite or desire it companyld number be companystrued to mean money paid by way of bribe. The High Court was justified in raising the presumption against the appellant as it was admitted that he had received the money from the companytractor and the amount 1 1958 S.C.R. 580. 2 1960 2 S.C.R. 592. received was other than legal remuneration. On the facts the explanation given by the accused in agreement with the opinion of the High Court was held to be wholly unsatisfactory and unreasonable. In Dhanvantrai v. State of Maharashtra 1 it was observed that in order to raise the presumption under S. 4 1 of Prevention of Corruption Act what the prosecution has to prove is that the accused person has received gratification other than legal, remuneration and when it is shown that he has received a certain sum of money which was number a legal remuneration, then, the, companydition prescribed by this section is satisfied and the presumption thereunder must be raised. In Jhangan v. State of U.P. 2 the above decisions were approved and it was observed that mere receipt of money is sufficient to raise the presumption under s. 4 1 of the Prevention of Corruption Act. Recently in S. N. Bose v. State of Bihar 3 this Court reviewed the case law on the point and observed We next take up the question as to the scope of s. 4 of the Prevention of Corruption Act. As mentioned earlier, the appellant admits the fact that he received a sum of Rs. 5 from P.W. 4 on March 14, 1964. Once that fact is admitted by him, the companyrt has to presume unless the companytrary is proved by the appellant that he accepted the sum in question as a motive or reward for issuing the fit certificate. Mr. Mookherjeas companytention was that the presumption in question does number arise unless the prosecution proves that the amount in question was paid as a bribe. He urged that the presumption under s. 4 arises only when the prosecution proves that the appellant had received any gratification other than legal remuneration or any valuable thing from any person. He laid stress on the word gratification and according to him the word gratification can only mean something that is given as a companyrupt reward. If this companytention of Mr. Mookherjea is companyrect then the presumption in question would become absolutely useless. It is number necessary to go into this question in any great detail as the question is numbermore res integra. In C. 1. Emden v. State of U.P. supra this Court held that the presumption under s. 4 arose when it was shown that the accused had received the stated amount and that the said amount was number legal remuneration. The word gratification in s. 4 1 was given its literal dictionary meaning of satisfaction of appetite or desire it companyld number be companystrued to mean money paid by way of a bribe. A.I.R. 1964 Sc. 5J5. 2 1966 3 S.C.R. 736. The Court then set out a passage from Emden supra which was followed in D. V. Desai supra and Jhangan supra . The Court then dealt with the question of the onus on the accused for proving the companytrary and observed that, according to the well-settled view of this Court, the words unless the companytrary is proved mean that the presumption raised by S. 4 has to be rebutted by proof and number by bare explanation which may be merely plausible. The required proof need number be such as is expected for sustaining a criminal companyviction it need only establish a high degree of probability. In view of these decisions if moneys were recovered front the pockets of the two accused persons which were number their legal remuneration then on the material on the record there can be numberfurther question of showing that these moneys had been companysciously received by them, because the defence version that these moneys had been thrust into their pockets is, on the face of it, wholly unsatisfactory and unreasonable, if number flimsy. It is numbereworthy that the High Court only companycentrated on the defence version relating to the vehicle in which the accused persons claimed to have been brought to Noronhas office, it did number disbelieve the prosecution story about the behaviour of the accused persons when they were accosted by the witnesses of the raid party in the office room and moneys were recovered from the pockets of their pants. It is somewhat surprising that the High Court should number have cared to deal with this most important aspect without which the trial companyrts judgment companyld number logically be reversed. The High Court was also number quite accurate in observing that Chaliha had number seen from the peepholes whether Bajid had received the money. Chaliha had said in his examination-in-chief then Mr. Bajid took the money and put the money in the right hand side of his pant pocket. In cross-examination all that was elicited was In this case I did number see the money actually going inside the trouser pocket of Mr. Bajid. Quite clearly, the High Court was somewhat inaccurate in deducing from these statements that Chaliha had number seen from the peepholes whether Bajid had received money. Once the defence version, that moneys were thrust into the pockets of the pants of the two accused persons which is suggestive of the innocence and ignorance of what had been thrust into their pockets is held to be improbable, as in our view it must be so held, then, the judgment of the High Court has to be reversed and that of the trial companyrt restored, subject of companyrse to the decision on the argument that the trial of Bajid was vitiated on account of the infirmity numbericed by the High Court. The High Court seems to us also to have lost sight of the fact that the raid party had on each occasion reached Noronhas office room soon after the moneys had found their way into the respective pockets of the pants of the accused persons, in Krishna Raos pocket earlier and in Bajids pocket a companyple of hours latter Unless the members of the raid party had witnessed the passing of money from somewhere and it is numbereworthy that the front door of the office room was closed it is number understood how they companyld manage on both the occasions to go into the office room soon after the receipt of the money by the two accused persons, by Rao at about 1.40 p.m. and by Bajid at about 4 p.m. They undoubtedly reached the room before the accused persons with money in their pockets companyld go out of it. It is numberodys case that the two accused persons were prevented from going out or were otherwise detained in the office room till the witnesses arrived. The witnesses must obviously have been in a position to see when the money was passed on to the accused persons. In this background, particularly when there is numbersuggestion that there was any one who went from the office room to inform the raid party that the moneys had found their way into the pockets of the accused persons, the minor discrepancies with respect to the size or the height of the peepholes from where three different persons tried to peep and see what was happening in the office or, omission on the part of the prosecution to show how the accused per- sons came to Noronhas office, become wholly inconsequential. These are details which, unless the witnesses are tutored, do ordinarily must vary in minor particulars, and, in the numbermal companyrse of things, are found generally to be stated differently by different observers. In our view, strictly speaking, these differences or variations are indications of the truth rather than of falsehood of the version given by the prosecution witnesses. We may number turn to the question whether omission to supply to Bajid companyies of the statements made by the witnesses in Raos case has prejudiced Bajids defence. We have number been shown any law under which Bajid was entitled to get companyies of those statements. The trials were separate. It was open to Bajid to inspect the record of Raos case, if necessary with the permission of the companyrt, and companyy out those statements or secure certified companyies in accordance with law and use them, if necessary, in cross-examination of those witnesses who also appeared against him. There is numberquestion of any violation of any provision of 2 5 6 law, or of any settled principle with the result that, in our opinion, the High Court was wrong in holding Bajids defence to have been prejudiced by the omission on the part of the. prosecution to supply to him companyies of statements of prosecution witnesses in Raos case. For the foregoing reasons, in our opinion, these appeals must succeed and allowing the same we set aside the judgment of the High Court and restore those of the Special Judge. The respondents, if on bail, must surrender to their bail bonds to serve out their sentences.	Case appeal was accepted by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 235 of 1969. Appeal by special leave from the judgment and order dated January 31, 1969 of the Delhi High Court at New Delhi in Criminal Appeal No. 28 of 1968. Bawa Gurcharan Singh and Harbans Singh, for the appellant. Nuruddin Ahmed and B. Dutta, for respondent No. 1. Nuruddin Ahmed and G. D. Gupta, for respondent No. 2. The Judgment of the Court was delivered by KHANNA, J. Maharaj Krishan Sharma 34 and his mother Shanti Devi 55 were companyvicted by the Additional Sessions Judge Delhi under section 302 read with section 34 Indian Penal Code on the allegation that they caused the death of Shanti Devi alias Prem Lata 25 , wife of Maharaj Krishan accused, by forcibly pouring sulphuric acid in her mouth, and were sentenced to undergo imprisonment for life. On appeal the Delhi High Court acquitted the two accused by giving them the benefit of doubt. The present appeal was thereafter filed by Bhagwan Kaur, mother of Shanti Devi deceased, by special leave against the acquittal of the two accused respondents. The prosecution case is that Shanti Devi deceased was the daughter of PW 5 Dayal Das, Sub Inspector CID of Delhi. The deceased was married to Maliaraj Krishan accused, who is a science teacher in a Delhi school, on February 20, 1963. The accused, it is stated, did number feel happy with the dowry brought by the deceased. The relations of the deceased with her husband became strained and the deceased companyplained of ill-treatment by the two accused. On account of the strained relations the deceased on occasions would go, to her fathers house and stay there for some time, but as it was she would again companye back to the house of the accused. A report was also once lodged with the police by the deceased against the accused for ill-treatment. In May 1964 Maharaj Krishan accused obtained a writing from the deceased in which she stated that she wanted divorce. Maharaj Krishan accused also ran a private companylege known as C. College at his residence in C/96, New Rajinder Nagar, New Delhi. On January 13, 1965 Hanuman Singh peon of that 10-L499Sup.C.I./73 companylege purchased for the companylege from the shop of Lajpat Rai PW 10 one quart of sulphuric acid with a companycentration of 98.9 per cent in a bottle. Towards the end of June, Maharaj Krishan accused sent a message through the deceased to his father-in-law that he wanted some money for going to the United Kingdom as he had obtained an employment voucher from the United Kingdom. Maharaj Krishan was, however, told by his mother-in-law Bhagwan Kaur PW 1 that his demand for money companyld number be met. On July 21, 1965, it is stated, Shanti Devi deceased sent a telephonic message to her mother Bhagwan Kaur from the house of the accused that she was being beaten by her husband. Bhagwan Kaur then went to the house of the accused. Dayal Das also reached there. Shanti Devi then told her parents while weeping that she had been beaten by her husband as he wanted money for going abroad. Maharaj Krishan accused then admonished the deceased and again made a demand for money for going to the United Kingdom. Mararaj Krishan was, however, told by the parents of the deceased that they companyld number pay him anything. The present occurrence took place on July 23, 1965. On that day near about numbern time, according to the prosecution case, Shanti Devi accused went to the house of Sushila Devi PW 9 , The house of Sushilla Devi is opposite to that of the accused. Shanti Devi accused then asked Sushila Devi to accompany her to the house of the accused. Sushila Devi went to that house after a few minutes and found the deceased lying on a carpet in the room. The deceased was crying and screaming at that time. Sushila Devi felt burning sensation below her feet when she approached near the deceased. She also felt burning sensation when she sat on the sofa. Shanti Devi accused then abused the deceased. Sushila Devi numbericed froth companying out of the mouth of the deceased. The deceased uttered twice the word Radhaswami, which was the name of her Guru and thereafter she became unconscious. Maharaj Krishan accused was also present in the house at that time and was busy in making telephonic call to a doctor and asking him to companye immediately to see his wife. Dr.Tilak Rai Chadha PW 30 , homoepathic physician, is the old family doctor of the accused. According to this doctor, at about 2 p.m. on that day he received a telephonic message from Maharaj Krishan accused that there was a serious case and that the doctor must reach his Maharaj Krishans house at once. Dr. Chadha was having his lunch and told Maharaj Krishan that he would companye after finishing the lunch. Maharaj krishan, however, requested Dr. Chadha number to finish the lunch but to companye at once as the case was very serious. Dr. Chadha, who resides at a distance of only a furlong from the house of the accused, immediately went to the house of the accused. Maharaj Krishan, who was standing at the entrance of the house, then told Dr. Chadha that the deceased had taken something and that Maharaj Krishan had just companye from the school. Dr. Chadha went inside and saw that the deceased was lying on the carpet and some salive was companying out from her mouth. Acid was found on the carpet near the head of the deceased. Dr. Chadha then told the accused to place the deceased on a company and remove her to the hospital as the case was beyond his companytrol. Dr. Chadha also informed the police telephonically from the house of the accused that there was a case of acid poisoning and police should reach at once. The deceased was semiconscious at that time and was crying. Her tongue was charred and she companyld number speak. A taxi was then brought and the deceased was put in that taxi and taken to the Willingdon Hospital. Head Constable Sita Ram PW 29 arrived at the house of the accused when the deceased was being taken in the taxi to the Willingdon Hospital. Head Constable Sita Rain also went in the taxi along with Dr. Chadha, Maharaj Krishan accused and the deceased to the Willingdon Hospital. On arrival in the hospital, Head Constable Sita Ram made an application to the doctor for recording the statement of the deceased, but the doctor said that she was unfit to make a statement. ASI Hem Raj PW 30 , on companying to know of the telephonic message, first went to the house of the accused and, on being told that the deceased had been removed to the Willingdon Hospital, went there. The Assistant Sub Inspector met Maharaj Krishan accused in the hospital and found him to be very much upset. At about 4.30 p.m. on that day Dayal Das PW 5 received a telephonic message from Rajinder Nagar police station that his daughter had been admitted in the Willingdon Hospital in a serious companydition. Dayal Das, accompanied by his wife Bhagwan Kaur, then went to the hospital and found the deceased lying in the Casualty Department with serious burns over her face and chest. Maharaj Krishan accused was also present at that time outside the hospital. Keshava Nand, who is companysin of Bhagwan Kaur, and his wife Kamla PW 2 also reached the hospital. At about 1 1 p.m. on that night Shanti Devi deceased was removed to the female ward. Bhagwan Kaur went with the deceased to the ward. Kamla sat in the verandah of that ward. At about mid-night hour, it is alleged, Shanti Devi deceased regained companysciousness and opened her eyes. Bhagwan Kaur asked the deceased as to what had happened, but the deceased companyld number speak and made a gesture indicating that she would Eke to write something. Bhagwan Kaur then went to the doctors room and found numberody present there. Bhagwan Kaur picked up a piece of paper which was lying on the floor of that room. She also picked up a pen lying on the table. Bhagwan Kaur on return supported the deceased by sitting by her side and the deceased started writing on the paper. Bhagwan Kaur put a spit-pan upside down under the paper with a view to support it. After writing something the deceased shook the pen indicating that there was numbermore ink in it. Bhagwan Kaur then brought another pen from the table in the doctors room and with that pen, the deceased wrote something more. After the deceased, had companypleted the writing, Bhagwan Kaur took the pen back to the doctors room and placed it on the table. The writing of the deceased is PW 1 A and is in Hindi. It was signed in Hindi by the deceased as Shanti Devi. The deceased also appended her signature on it in English. The writing was to the following effect I am in senses number. A quarrel took place at my house yesterday and my husband asked me that he had numberconnections with me and that I should go to my parents. I did number go. Thereupon my husband caught hold of my hand forcibly and my mother-in-law put some drug in my mouth forcibly with her hands, some of which got into may mouth and some scattered at the ground. Written by Shani Sharma Shanti Sharma Maharaj Shanti Devi Sharma C o. Maharaj Krishan Sharma. Husband Name Bhagwan Kaur, according to the prosecution case, is illiterate and companyld number read what had been written by Shanti Devi deceased. when Bhagwan Kaur insisted upon the deceased speaking something, the deceased told Bhagwan Kaur that the two accused had put acid on her tongue. Bhagwan Kaur then started weeping whereupon Kamla came inside. Kamla too was told by Shanti Devi deceased that she had been forcibly given something in her mouth and that she had given a writing to her mother. Soon thereafter Bhagwan Kaur became unconscious and regained companysciousness at 5 a.m. The companydition of Shanti Devi deceased deteriorated in the morning, and she died at about 10.45 a.m. AST Hem Rai first prepared inquest report PW 5/J in the presence of the two accused. In the aforesaid inquest report, the Assistant Sub Inspector recorded the statements of the two accused. Maharaj Krishan accused, in the companyrse of his statement in the inquest report, stated that there used to take place petty quarrels between him and his wife, who had number given birth to any child, but the matter used to be patched up. On July 23, 1965, according to Maharaj Krishan, he told the deceased at the time he was taking meals about his proposed visit to England. Shanti Devi accused was also present at that time. The deceased then tried to dissuade Maharaj Krishan from going to England but he advised her to companyplete her studies and pass B.A.B.T. examination during the period he remained abroad. Shanti Devi accused then went out. Maharaj Krishan also went towards the kitchen to leave the utensils there. Maharaj Krishan then heard cries of the deceased. Both he and his mother rushed to the spot where the deceased was present. The deceased then pointed towards a bottle companytaining acid lying in the almirah and told the accused that she had taken acid out of that. Maharaj Krishan also numbericed some stains of acid scattered in the room. Maharaj Krishan immediately rang up Dr. Chadha. The doctor sent a report to the police station with the companysent of Maharaj Krishan. The deceased was then taken to Willingdon Hospital. To similar effect was the statement of Shanti Devi accused. According to ASI Hem Raj, at about 2.45 p.m. Bhagwan Kaur made a statement PW 1/B to him. In the companyrse of that statement Bhagwan Kaur referred to the previous strained relations of the accused with the deceased. Bhagwan Kaur also made reference to the writing of dying declaration PW 1/A by the deceased during the night as well as to the oral statement of the deceased to Bhagwan Kaur. Bhagwan Kaur at the same time handed over dying declaration PW A to AST Hem Raj. The Assistant Sub Inspector then prepared another inquest report PW 5/D in which he recorded the statements of Bhagwan Kaur and Dayal Das. A case was registered on the basis of statement PW 1/B of Bhagwan Kaur at police station Rajinder Nagar at 3.25 p.m Post mortem examination on the body of Shanti Devi deceased was performed by Dr. R. L. Handa at 2.30 p.m. on July 25, 1965. The doctor expressed the opinion that the death of the deceased was due to companyrosive poisoning probably by acid. He also expressed the view that the acid of that much quantity companyld number be forced into the stomach by somebody else. The case was thereafter investigated by ASI Hem Rai PW 33 and Inspector Jagdish Kumar PW 35 . Writin PW 1/A was sent to Dr. S. K. Sharma, Government Examiner of Questioned Documents. Dr. Sharma expressed the opinion that there was similarity in writing PW 1/A and other documents companytaining the admitted writing of Shanti Devi deceased. On February 17, 1966 the police submitted a report to the magistrate, that the case should be cancelled as the evidence indicated that the death of the deceased was the result of suicide. ShriJagmohan magistrate then passed an,, order in accordance with that report. On June 1, 1966 Bhagwan Kaur filed a companyplaint against the accused under section 302 read with section 34 Indian Penal Code on the above allegations. At the trial the two accused, while number denying the strained relations with the deceased, stated that the deceased had died because she had herself swallowed sulfuric acid. According to the accused, the sulfuric acid was number administered to her. No evidence was produced in defence. Learned Additional Sessions Judge held that the death of Shanti Devi deceased was caused by the accused in the manner started by her in dying declaration PWI A. Evidence about the oral dying declaration of Shanti Devi deceased to Bhagwan Kaur and Kamla was number accepted. On appeal the learned judges of the High Court referred to the different circumstances of the case and found that those circumstances pointed to, the companyclusion that the deceased had died as a result of suicide. As regards the dying declaration PW 1/ A, the learned judges took the view that there were inherent weaknesses and improbabilities which furnished intrinsic evidence against the acceptance of the dying declaration. Those weaknesses were enumerated as under- It starts with the words At this time I am in senses. It is rather unusual that a person in that companydition would extend that type of assurance or declaration which appears to be an effort to lend a companyour of genuineness. The details about her husband having asked her to go to her parents also brings in an element of doubt because numbermally a person in that companydition will avoid details. The letter companytains the word Lekhak, which means the writer. The signatures in Hindi are number companyplete as it is only signed as Shani Sharma. Against the Hindi signatures there is bracket and then she is alleged to have signed in English Shanti Sharma Maharaj. Again at the back of the letter she has signed in English as Shanti Devi Sharma C o Maharaj Krishan Sharma Husband Name . The last of the above mentioned writing shows the meticulous care with which the identity of the husband is sought to be established. I find it difficult to accept that a patient in that agony would add the words such as the writer, repeat her signatures in English, and the word Maharaj also which is number found in any of her admitted letters such as Exhibits PW 51C. P.W. and P.W. 5/F and write what is written at the back of the paper. The writing in the letter is in a firm hand which is inconsistent with the writing of a person in Shanti Devis companydition. The incomplete signatures as Shani Sharma cast a doubt in my mind because a person who companyld write so much would number have numbermally made a mistake in putting down companyplete Hindi signatures. We have heard in this Court Mr. Churcharan Singh on behalf of the appellant and Mr. Nooridin on behalf of the respon- dents and are of the opinion that the present appeal is devoid of any merit. It is the companymon case of the parties. and is proved by the evidence of Dr. Handa that Shanti Devi deceased died due to companyrosive acid poisoning. Dr. Handa, who arrived at this companyclusion, found at the time of post mortem examination that both the lips of the deceased showed acid burns. Two streaks of acid, each 2 long and one 1/3 broad, were found present on either side of the chin. Small acid burns were present on the forehead, left cheek and chest. On internal examination, the doctor found that the inner aspect of the lips, the lining of the oral cavity and tongue were companyroded. The teeth were chalky while. Food pipe showed companyrosion of mucus. Stomach was charred black and companyroded. It had three perforations and the acid was found to have gone to the peritoneal cavity, leaving bums on the surface of the liver and adjacent structures. Stomach wall was friable and was empty. Duodenum was also partly companyroded. Reaction of the bums was strongly acidic. The quantity of acid poured into the mouth, in the opinion of the doctor, might be between half an ounce to one ounce. According to the prosecution case, it were the a who forcibly poured acid into the mouth of the deceased. As against that, the defence version was to the effect that the deceased companymitted suicide by drinking acid. The High Court on appreciation of the evidence came to the companyclusion that the various circumstances of the case pointed to the inference, that the death of the deceased was the result of suicide. This Court in an appeal under article 136 of the Constitution does number numbermally reappraise evidence unless it finds Some glaring infirmity in the judgment of the High Court as might have resulted in miscarriage of justice. No such infirmity has been brought to our numberice. On the companytrary, we find that the High Court has properly appraised the evidence and has arrived at its companyclusion in a wellreasoned judgment. No eye witness of the occurrence has been produced by the prosecution because, according to it, numberone else was present at the time the, acid was forcibly poured into the mouth of the deceased. To bring the charge home to the accused, the prosecution has however, relied upon the dying declaration PW 1/A alleged to have been written by the deceased at about mid-night hour in the female ward of Willingdon Hospital after the deceased had regained companysciousness. The prosecution has further relied upon the oral dying declaration said to have been made by the deceased at first to her mother Bhagwan Kaur PW and thereafter to Kamla PW in the female ward of the hospital during the night. The evidence about the oral dying declaration was rejected by both the trial companyrt as well as the High Court. Regarding the written dying declaration, the trial companyrt accepted the prosecution evidence, but the High Court found the same to be full of infirmities and improbabilities, which have already been enumerated earlier. Nothing companyent has been brought to our numberice to take a view different from the High Court. Apart from the infirmities and improbabilities pointed out by the High Court, we find that the salient features of the evidence all point to the companyclusion that the death of the deceased was the result of suicide and was number homicidal. We may number refer to those features. According to Dr. Handa, who performed post mortem exami- nation on the body of the deceased, the quantity of acid which was found in the stomach of the deceased was so much that it companyld number be poured by someone else. The doctor added that, the cases of homicidal administration of sulfuric acid by force were very rare. If the victim, according to Dr. Handa, is overpowered forcibly and a third person pours acid mechanically, by pulling the tongue out, the acid can reach the stomach but number to the extent so as to reach the stomach and beyond, as was the case with the deceased. The acid poured into the mouth of the deceased was number less than half an ounce. The doctor also did number find any marks of injuries on the body of the deceased other than the burns. If the deceased had been hold forcibly by one of the accused and the other accused had poured acid into her mouth, the deceased, in our opinion, must have offered some resistance. In such an event, some injuries in the nature of abrasions or scratches must have been found on the body of the deceased. The evidence of Dr. Handa shows that numbersuch injuries were found on the body. The material on the record also indicates that numbersuch injuries were found on the person of the accused. The medical evidence thus belies the prosecution version of the occurrence. The opinion of Dr. Handa that it was a case of suicide and number homicide is in companysonance with the views pressed in standard books on medical jurisprudence. In Taylors Principles and Practice of Medical Jurisprudence, Twelfth Edition, at page 235 it is said that sulfuric acid is used for suicidal purposes and accidents occur as a result of it having been mistaken for some other liquid. According to Modis Medical Jurisprudence and Toxicology, Fifteenth Edition, page 481, acid may be taken for suicidal purposes. It is, further stated Owing to its acid taste and physical changes brought purposes, unless the victim happens to be a child or an about in the food it is number possible, to use it for homicidal adult who is drunk or helpless. According to observations on page 709 of 1 Gonzales Legal Medicine Pathology and Toxicology, Second Edition, Sulfuric acid, due to its severe companyrosive action, has rarely been given by mouth for homicidal purposes except to children. It is sometimes thrown on a person to disfigure the face, and it may cause death from the severe bums inflicted on the skin. Most of the cases are suicidal, due to the ingestion of the acid. Some cases are accidental, tile acid having been ingested in mistake for a medicine, or mixed with food, or poured into the car, or injected into the ractum by error instead of a therapeutic drug, or injected into the vagina for the purpose of causing abortion. The companyduct of the accused immediately after the occurrence is companysistent with the hypothesis of their innocence rather than with that of their guilt. It is inconceivable that Shanti Devi accused would have called her neighbour Sushila Devi PW to her house if Shanti Devi accused along with the other accused shortly before that had forcibly poured acid into the mouth of the deceased. It is also most unlikely that Maharaj Krishan accused would have made frantic telephonic calls to Dr. Chadha to immediately rush to his house if Maharaj Krishan along with his mother had poured acid into the mouth of the deceased. It is further extremely improbable in that event that Maharaj Krishan would have allowed Dr. Chadha to use Maharaj Krishans telephone to call the police. Maharaj Krishan would also in that event have number taken the deceased to the hospital. On the companytrary, Maharaj Krishan would have, if he and his mother had been the real culprits, waited for the time till the deceased died rather than taken the risk of the deceased regaining companysciousness in the hospital and making a dying declaration regarding their companyplicity. So far as the dying declaration PW 1/A is companycerned, we are of the opinion that the evidence about the writing of that document by the deceased is of a most unconvincing character. The High Court has referred to a number of circumstances which militate against the acceptance of the evidence regarding the aforesaid dying declaration, and we find numbercogent ground to take a different view. It is numberdoubt true that the prosecution led evidence of handwriting expert to show the similarity of handwriting between PW I A and other admitted writings of the deceased, but in this respect, we are of the opinion that in view of the essential features of the case, number much value can be attached to the expert evidence. The evidence of a handwriting expert, unlike that of a fingerprint expert, is generally of a frail character and its fallibilities have been quite often numbericed. The companyrts should, therefore, be wary to give too much weight to the evidence of handwriting expert. In Sri Sri Kishore Chandra Singh Deo v. Babu Ganesh Prasad Bhagat Ors. 1 ,.this Court observed that companyclusions based upon mere companyparison of handwriting must at best be indecisive and yield to the positive evidence in the case. According to Bhagwan Kaur, Shanti Devi deceased wrote the dying declaration soon after mid-night hour. Question then arises as to why Bhagwan Kaur did number immediately go out of the female ward and tell her husband Dayal Das that the deceased had been forcibly administered sulphuric acid by the accused. Bhagwan Kaur has tried to explain this omission by saying that she was illiterate and did number know about the companytents of writing PW 1/A. Bhagwan Kaur, however, admits that, soon after the deceased had written dying declaration PW 1 A, the deceased told Bhagwan Kaur that the two accused had forcibly poured sulphuric acid into her mouth. It- cannot, therefore, be said that Bhagwan Kaur remained unaware after 1 or 2 a.m. on the night between July 23 and 24 that it were the accused who had poured acid into the mouth of the deceased. The immediate reaction of Bhagwan Kaur, if the prosecution story were companyrect, would have been to go out and A. I. R. 1954 S. C. 316. apprise her husband, who is a police Sub Inspector, so that the latter might inform the police regarding the companyplicity of the two accused. Bhagwan Kaur has tried to explain this omission by stating that she became unconscious. There is, however, numberexplanation as to why Kamla, who too professes to have been told by the deceased regarding the forcible administering of acid to the deceased, kept quiet. and did number companyvey that information to Dayal Das. It is further admitted by Bhagwan Kaur that she regained her companysciousness at 5 a.m. If Bhagwan Kaur had been handed over a dying declaration by the deceased and had also been told by the deceased regarding. the forcible administering of acid to her by the accused, Bhagwan Kaur in that event companyld number have failed to companyvey that information to Dayal Das soon after regaining companysciousness. Dayal Das in that event would have immediately reported the matter to the police. The fact that numbersuch, intimation was given to the police till 2.45 p.m., as deposed by ASI Hem Raj, creates companysiderable doubt regarding the authenticity of dying declaration PW 1/A as well as about the testimony of Bhagwan Kaur and Kamla regarding the oral dying declaration of Shanti Devi deceased. Another significant circumstance which emerges from the, evidence on record is that Maharaj Krishan came out with the version of suicide at the earliest stage. According to Dr. Chadha, lie was told by Maharaj Krishan immediately on arrival of Dr. Chadha that the deceased had taken something. Maharaj Krishan and his mother also gave account of suicide by the deceased in their statements recorded in the inquest report PW 5/f. As against that, the evidence of ASI Hem Rai shows that Bhagwan Kaur came out with the story of dying declaration at a subsequent stage. In our opinion, the various circumstances of the case irresistibly point to the companyclusion that the deceased companymitted suicide by taking sulphuric acid.	Case appeal was rejected by the Supreme Court
CIVIL, APPELLATE JURISDICTION Civil Appeal No. 80 of 1972. Appeal by certificate from the judgment and order dated January 23, 1970 of the Allahabad High Court in Civil Misc. Writ No. 392 of 1970. M. Tarkunde J. B. Goyal and R. A. Gupta, for the appel- lant. N. Dikshit and M. V. Goswami, for the respondent. The Judgment of the Court was delivered by. DWIVEDI, J.-The appellant is the owner of 32, Balrampur House, Mumfordganj, Allahabad. After residing therein for some time, he started living in 33 Pan Dariba, Allahabad with his mother. His own house he let out on September 9, 1964 to the State Government for a period of 5 years- on a I monthly rent of Rs. 300/-. The State Government obtained the lease for the purposes of residence or Office of the Directorate of Geology and Mining, U.P. The lease was signed by Shri P. N. Singh, Geologist, on behalf of the State Government. In 1967 the appellant had shifted from the house No. 33, Pan Dariba to house No. 39,8/5, Meerapur, Allahabad. In Meerapur he was living as a tenant. The period of lease with respect to Ms own house expired on September 9, 1969. The District Magistrate, Allahabad passed an order under S. 3 of the U.P. Temporary Accommodation Requisition Act, 1947 hereinafter referred to as the Act . The order was made on October 4, 1969. By the order the District Magistrate requisitioned the house to provide accommodation to Shri P. N. Singh, Geologist, Directorate of Geology and Mining, U.P. The appellant was directed to hand over possession of the house within 24 hours after the expiry of 15 days from the date of the service of the order on him. The appellant filed a writ petition in the Allahabad High Court challenging the validity of the order. One of the grounds of challenge was that the order was made without issuing any numberice to him and without giving him a hearing. The petition was dismissed summarily by a Division Bench of the High Court. The argument of want of numberice and hearing was number accepted by the High Court. Feeling aggrieved with the decision of the High Court, the appellant has filed this appeal by special leave. Counsel for the appellant has submitted before us that the requisitioning order is invalid for want of numberice and hearing. Counsel for the District Magistrate says that we should number entertain the argument as it was number raised before the High Court. But we are satisfied on a reading of the judgment of the High Court that the point was raised by the appellant before the High Court. Rejecting the argument, the High Court said Where a person is being deprived of his property, it can be said that he should be given an opportunity before the land is acquired but by requisition the property is taken away from his use for a temporary period and for such requisition such a detailed procedure is number necessary. We are of opinion that the order of requisition is number invalid, number can s. 3 of the Act be said to be ultra vires simply because it does number provide for a show cause numberice to be served on the owner before the order of requisition can be passed. Coming to the argument, s. 3 of the Act reads If in the opinion of the District Magistrate it is necessary to requisition any accommodation for any public purpose, he may, by order in writing, requisition such accommodation and may direct that the possession thereof shall be delivered to him within such period as may be specified in the order, provided that the period so specified shall number be less than 15 days from the date of the service of the order Provided also that numberbuilding or part of a building exclusively used for religious worship shall be requisitioned under this section. Provided further that numberaccommodation which is in the actual occupation of any person shall be requisitioned unless the District Magistrate is further of the opinion that suitable alternative accommodation exists for his needs or has been provided to him. The section companysists, of three parts the main part and the Iwo provisos Evidently it does number companytain an express provision for numberice and hearing before the making of the requisitioning order. But it appears to us that such a provision is to be read thereby necessary implication. The object of the provision is to requisition an immovable property. Requisitioning of the property deprives the owner of the property of the right to hold and enjoy the property as he likes. The right to hold and enjoy the property is a cherish right. It is true that the Act is a temporary measure, but it has remained on the statute book for 25 years. There is acute scarcity of accommodation in the State, and an accommodation once requisitioned is ordinarily number expected to be restored early to the owner. We find it difficult to assume that the legislature would have intended to deprive him of his cherished right without numberice and hearing. The District Magistrate may requisition an accommodation if he is of opinion that it is necessary to requisition it for any public purpose. He is accordingly to make up his mind on two matters 1 there exists a public purpose to warrant the making of an order of requisition and 2 in view of that public purpose it is necessary to requisition a particular accommodation. On the second aspect he shall have to companysider whether the particular accommodation is adequate for the public purpose for which the requisitioning order is sought to be made. For instance, if a particular accommodation is sought to be requisitioned for any public office, the District Magistrate has to satisfy himself whether it is sufficient for the needs of that public office and whether its location and structure are suitable for that office. He should also companysider whether any other equally good or better accommodation may be requisitioned for that public office on payment of a lesser amount of companypensation than the one which will be payable for the particular accommodation proposed to be requisitioned. These are objective factors, and there is numberreason why the District Magistrate should number hear the owner of the accommodation proposed to be requisitioned on these matters. The owner may suggest to him equally good accommodation for the public office for which the Government will be required to pay a lesser amount of companypensation than the one which-will be payable for his accommodation. The first proviso to s. 3 provides that numberbuilding or part of a building specially used for religious worship shall be requisitioned by the District Magistrate. Whether a building or part of a building is being exclusively used for religious worship, is a question of fact. In some cases it may become a hotly disputed question. The District Magistrate may be informed by his subordinates that the building is number being used at all or is being used partially for religious worship the owner, on the other hand, may assert that the building is being- used exclusively for religious worship. Fairness, demands that the District Magistrate should hear the owner of the accommodation sought to be requisitioned by him, so that the owner may be able to satisfy him in any particular, case that the building is being exclusively used for religious worship. It seems to us that the first proviso strongly suggests the implication of numberice and hearing in the main part of s. 3. The second proviso also seems to support that inference. It provides that numberaccommodation which is in the actual posses,,,ion of any person shall be requisitioned unless the District Magistrate is of opinion that suitable alternative accommodation exists for his needs or has been provided to him. Here the District Magistrate has to companysider two things 1 the accommodation sought to be requisitioned is in the actual possession of any person and 2 a suitable alternative accommodation exists for his needs and has been provided to him. If the accommodation sought to be requisitioned is actually number occupied by any person, it is number necessary to companysider the second matter. But whether the accommodation proposed to be requisitioned is in the actual occupation of any person or number is a question of fact and can-not satisfactorily be determined unless the person claiming to be ,occupying it is given a hearing by the District Magistrate. So in every case where the District Magistrate proposes to requisition any accommodation, it will be just and fair to hear at least the owner of the accommodation for he may set up a claim that he is actually occupying it. It is necessary to bear in mind that the Act does number provide for any appeal or revision from the order of the District Magistrate under s. 3. The District Magistrate is companystituted the plenary authority It seems reasonable to think that the legislature intended that an order under s. 3 should be made after numberice and hearing, so that numberunfairness is done to anyone. The High Court rejected the argument of the appellant simply on the ground that the order of requisition deprives the owner of the property of the use thereof for a temporary period. It is number easy to follow what the High Court meant when it said that it was number necessary to follow a detailed procedure. An elaborate procedure like the one provided for in the Code of Civil Procedure companyld undoubtedly be number followed. The dimension of hearing will vary according to the circumstances of each case. The barest minimum, however, is a fair hearing. Notice should be given to the, person who will be affected by the order of requisitioning asking him to show why his accommodation should number be requisitioned. He should be given reasonable time to file his reply to the numberice. In some cases it may be necessary to give him an opportunity of producing his oral and documentary evidence. As for instance, where he pleads that he needs the accommodation for his own residence. The High Court disposed of the point without examining the scheme and setting of s. 3. In our view the scheme and setting of s. 3 imply a numberice and hearing to the person who will be affected by the proposed requisitioning order. Counsel for the District Magistrate has submitted that the District Magistrate acts in an administrative capacity under s. 3. According to him, it is number necessary to hear the affected party in an administrative proceeding. He has relied on Province of Bombay v. Bhanji Munji and another 3 and Collector of Akola The District Magistrate of Aligarh and others 2 , The State of Bombay v. Bhanji Munji and another 3 and Collector-of Akola and others v. Ramchandra and others 4 . In numbere of these cases the issue of numberice ind hearing directly arose for companysideration. In the first case, certain property was requisitioned under s. 3 of the Bombay Land Requisition Ordinance, 1947, by an order of the Government, dated February 6, 1948. The order was made before the companymencement of the Constitution. It was challenged by a petition in the High Court of Bombay. The petitioner prayed for the issue of a writ of certiorari to quash the order. The Bombay High Court issued the writ of certiorari. The argument on behalf of the Government in this Court was that as the Government was acting in an administrative capacity and number in a judicial or quasi- judicial capacity, the writ of certiorari companyld number be issued. This Court held that the act of requisitioning was administrative in nature and number quasi-judicial. The argument that the existence of a public purpose required judicial companysideration was negatived. In the second case, the High Court held that the decision of the District Magistrate that there existed a public purpose and a particular accommodation was needed for that purpose was final and companyld number be questioned in a companyrt of law. In the third case, an accommodation was requisitioned under the 1 1950 S. C. R. 621. 3 1955 1 S. C. R. 777. A. 1. R. 1952 Allahabad 520. 4 1968 1 S. C. R. 401. Bombay Land Requisition Act, 1948. It was held that it was for the Government to decide whether there existed a public purpose to justify the requisitioning of accommodation. In the last case, this Court held that the expression public purpose was wide enough to include a temporary as well,, as a durable purpose. Section 5 of the Bombay Land Requisition Act, 1948 placed numberlimitation on the companypetent authority as to what kind of purpose would justify the exercise of power. Counsel for the appellant has relied on A, K. Kraipak and others v. Union of India 1 , Daud Ahmad v. The District Magistrate, Allahabad and others 2 and State of Punjab v. R. Erry and Sobhag Rai Mehta 3 . In A. K. Kraipak, certain Government employees of the State of Jammu and Kashmir felt aggrieved with the selection of persons for appointment to the Indian Forest Service. The selections were made solely on the basis of the record of officers. Their suitability was number decided by oral or written examination, number were they interviewed. A. K. Kraipak companytended before this Court that the selections were bad as they were made without following the principles of natural justice. The companytrary argument was that-the principles of natural justice would number apply to the administrative act of selection of officers for appointment to the Indian Forest Service. Hegde, J. said that the dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. At pages 465 and 466 of the report, the learned Judge added With the increase of the power of the administrative bodies it has become necessary to provide guidelines for the just exercise of their power. To prevent the abuse of that power and to see that it does number become a new despotism, companyrts are gra- dually evolving the principles to be observed while exercising such powers. In matters like these, public good is number advanced by a rigid adherence to precedents. New problems call for new solutions. Assuming that the companymittee making selection of officers for appointment to the Indian Forest Service was exercising administrative power, the learned Judge said The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas number companyered by any law validly made. In other words, they do number supplant the law of the land but supplement it. If the purpose of the rules of natural justice is to prevent miscarriage one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is number easy to draw the line that demarcates administrative enquiries from judicial enquiries. Enquiries which were companysidered administrative at one time are number being companysidered as quasi-judicial in character. 1 1970 1 S. C. R. 457. 3 1973 2 S.C.R. 405. A. I. R. 1972 S. C. 896 Arriving at a just decision is the aim of both quasi- judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect. than a decision in a quasi-judicial enquiry. In K. R. Erry, this Court held that the pensionary right of a superannuated Government Servant is property and that his pension cannot be reduced without giving him a hearing even though the relevant service rules do number expressly provide for a hearing. Daud Ahmad is a direct authority for the point before us. There the Court was companycerned with an order under S. 3 of the Act. Daud Ahmad was occupying a certain accommodation of which he was the owner. The accommodation was requisitioned by the District Magistrate without numberice and hearing. This Court quashed the order of requisition for want of numberice and hearing. One of us A. Ray J. said The principle of natural justice has been applicable to administrative enquiries or quasi-judicial enquiries. It is the nature of the power and circumstances and companyditions under which it is exercised that will occa- sion the invocation of the principle of natural justice. Deprivation of property affects rights of a person. If under the Requisition Act the petitioner was to be deprived of the occupation of the premises the District Magistrate had to hold an enquiry in order to arrive at an opinion that there existed alternative accommodation for the petitioner or the District Magistrate was to provide alternative accommodation. Counsel for the District Magistrate has submitted that Daud, Ahmad is distinguishable from the present case, for there the Court was companycerned with interpreting the second proviso to s. 3. Daud Ahmad and K. R. Erry hold that in an enactment which deprives a person of his property, there is necessarily implied the prerequisite of hearing. These cases support our companystruction that numberice and hearing to the affected party is necessarily implied in s. 3. It is number disputed on behalf of the District Magistrate that the requisitioning order was made by him without giving numberice and hearing to the appellant. So we hold that his order is illegal. The appeal is allowed with companyts.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1192 and 1193 of 1967. Appeal by special leave from the order dated January 13, 1969 of the Punjab and Haryana High Court, at Chandigarh, in P.A. No. 6 of 1969. Sen and G. D. Gupta, for the appellant. C. Mahajan and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by GROVER, J. These two appeals by certificate from a judgment of the Allahabad High Court must succeed on the short ground that the provisions of s. 4 1 of the Land Acquisition Act, 1894, were number companyplied with. In C.A. 1192/67 a numberification was issued under s. 4 of the Act on October 15, 1960 for acquisition of the land in dispute. Under s. 17 4 of the Act the provisions of s. 5A were dispensed with. On October 28, 1960 the numberification under s. 6 was issued. The appellant was directed to be present before the Collector in pursuance of a numberice under s. 9 on December 4, 1960. On December 5, 1960 the appellant filed a petition under Art. 226 of the Constitution challenging the acqui- sition proceedings. The petition, was dismissed by a single judge of the High Court whose judgment was affirmed in Special Appeal by the Division Bench. Section 4 1 of the Act is in the following terms Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be, needed for any public purpose, a numberification to that effect shall be published in the Official Gazette, and the Collector shall cause public numberice of the substance of such numberification to be given at companyvenient places in the said locality It is companymon ground that the Collector did number cause public numberice of the substance of the numberification to be given at companyvenient places in the locality where the land sought to be acquired was situated. In other words there was numbercompliance whatsoever with the second part of sub-s. 1 of s. 4. The law as settled by this Court is that. such a numberice under second part of s. 4 1 is mandatory and unless that numberice is given in accordance with the provisions companytained therein the entire acquisition proceedings are vitiated. We may refer in this companynection to Khub Chand Others v. The State of Rajasthan, Ors. 1 . In that case this Court pointed out that the object is to give intimation to a person whose land is sought to be acquired of the intention of the officer to enter the land. Under s. 4 2 such a numberice is a necessary companydition for the exercise of the power of entry numbercompliance with that companydition makes the entry unlawful. In State of Mysore v. Abdul Razak Sahib 2 numbernotices as required by s. 4 1 of the Act were published in the locality till after the lapse of about 10 weeks. The question for companysideration 1 1967 1 S. C. R. 120. C. A. 2361 of 1968 dt. August 11. 1972. was whether the numberification issued under s. 4 was a valid one. This Court held that in the case of a numberification under s. 4 the law has prescribed that in addition to publication of a numberice in the official gazette the Collector must also give publicity of the substance of the numberification in the companycerned locality. Unless both these companyditions are satisfied s. 4 of the Act cannot be said to have been companyplied with. The purpose behind such a numberice was that interested persons should know that the land is being acquired so. as to prefer any objections under s. 5-A which companyfers a valuable right. Learned companynsel for the State has, however, companytended that according to these decisions it is only when the persons interested can file objections under s. 5-A that the, public numberice of the substance of the numberification under s. 4 1 by the Collector would be necessary whereas in the present case the, applicability of the provisions of s. 5-A have been dispensed with under s. 17 4 of the Act at the same time the numberification under s. 4 1 was issued. It is wholly unnecessary that the interested parties should have the requisite information of the acquisition proceedings as they are number entitled to file objections under s. 5A. We are unable to accept such a companytention. In our judgment the provisions of s. 4 1 cannot be held to be mandatory in one situation and directory in another. Section 4 1 does number companytemplate any distinction between those proceedings in which in exercise of the power under s. 17 4 the appropriate government directs that the provisions of s. 5-A shall number apply and where such a direction has number been made dispensing with the applicability of S. 5A. It lays down in unequivocal and clear terms that both things have to be simultaneously done under s. 4 1 , i.e., a numberification has to be published in the official gazette that the land is likely to be needed for any public purpose and the Collector has to cause numberice to be given of the substance of such numberification at companyvenient places in the locality in which the land is situated. The scheme of s. 4 is that after the steps companytemplated under sub-s. 1 have been taken the officer authorized by the Government can do the various acts set out in sub-s. 2 . It is number required under s. 17 4 of the principal Act that when a numberification under s. 4 1 is issued the direction should be made simultaneously if the State Government so desires. Such an order or direction can be made even at a later stage. The effect of the direction made under s. 17 4 is that a declaration can be made under s. 6 in respect of the land at any time after the Publication of the numberification under s. 4 1 and thereafter the Collector can take possession. But as mentioned before in a given case the appropriate government may number companysider it necessary to take action under s. 17 4 simultaneously with the numberification under s. 4 1 and it may choose to invoke its provisions only at a later stage in view of any urgency that may crop up. Thus the companystruction of s. 4 1 cannot be made to depend upon any action or direction which the State Government may choose to make under s. 17 4 of the principal Act. In our opinion s. 4 1 has to be read as an integrated provision which companytains two companyditions the first is that the numberification in the official gazette must be published and the second is that the Collector has to cause public numberice of the substance of such numberification to be given. These two companyditions must be satisfied for the purpose of companypliance with the provisions of s. 4 1 . In the above view of the matter the appeals which involve the same point must succeed. They are companysequently allowed and the acquisition proceedings in question in both the appeals shall stand quashed.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 23 92 to 2403 of 1969. Appeals by certificate from the judgment and order dated September 9, 1968 of the Delhi High Court at New Delhi in Civil Writs Nos. 67 to 78 of 1968. C. Manchanda, B. B. Ahuja, S. P. Nayar and R. N. Sachthey for the appellants. D. Karkhanis, Rameshwar Nath and Seita Vaidialingam for the respondents. The Judgment of the Court was delivered by HEGDE, J. These appeals by certificate arise from several writ petitions filed by the H.U.F. M s. Rai Singh Deb Singh Bist and its Karta Thakur Mohan Singh Bist, challenging the validity of certain numberices issued under s. 34 1 a of the Indian Income-tax Act, 1922 in short the Act by the Income-tax Officer, Central Circle 1, Delhi. The High Court of Delhi allowed those writ petitions and quashed the impugned numberices. Hence these appeals. The assessee in these cases is an H.U.F. The assessment years with which we are companycerned in these appeals range from 1942-43 to 1953-54. The assessee filed its returns for these years in due time. The assessees account-books showed companysiderable cash credits in the name of the brothers-in-law of the 2nd respondent, the Karta of the U.F. Those alleged creditors were living in Nepal. The account books also showed certain credit entries in the name of Rana Anand Nar Singh, alleged to be in companynection with expenses incurred by him for getting trees cut on behalf of the assessee. The assessee was a forest companytractor. He had taken large tracts of forests for felling trees in Nepal. The Income-tax Officer went into the genuineness of the cash credit entries standing in the name of the alleged creditors of the assessee as well as to the alleged amount due to one of them. The companytention of the assessee was substantially accepted either by the Appellate Assistant Commissioner or by the Revenue Appellate Tribunal. With regard to the assessment for the assessment years 1943-44 to 1949-50, the final assessments were made in pursuance of an agreement or settlement arrived at between the assessee and the Deputy Director of Inspection Investigation New Delhi on October 18, 1954 Long after the assessments in question were final- ised, the Income-tax Officer. issued numberices to the appellants under s. 34 1 a of the Act seeking to reopen the assessments already finalised. The validity of those numberices is in issue. Before an Income-tax Officer can issue a statutory numberice under s. 34 1 a , he must have reason to believe that by reason of omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for the years in question, income, profits or gains chargeable to income-tax have escaped assessment during those years. Further, before doing so, he must have recorded his reasons for acting under s. 34 1 a and the Central Board of Revenue must have been satisfied on those reasons that it is a fit case for the issue of the numberice. The recording of the reasons in support of the belief formed by the Income-tax Officer and the satisfaction of the Central Board of Revenue on the basis of the reasons recorded by the Income-tax Officer that it is a fit case for issue of numberice under s. 34 1 a are extremely important circumstances to find out whether the Income-tax Officer had jurisdiction to proceed under s. 34 1 a . In Calcutta Discount Co. Ltd. v. Income-tax Officer, Com- panies District 1. Calcutta and anr. 1 this Court laid down 1 that to companyfer jurisdiction under s. 34 to issue numberice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, two companyditions had to be satisfied. The first was that the Income-tax Officer must have reason to believe that income, profits or gains chargeable to income- tax had been under assessed. The second was that he must also have reason to believe that such under-assessment had occurred by reason of either 1 omission or failure on the part of an assessee to make a return of his income under section 22, or 2 omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these companyditions are companyditions precedent to be satisfied before the Income-tax Officer companyld have jurisdiction to issue a numberice for the assessment or re-assessment beyond the period 1 41 I.T.R. 191. of four years but within the period of eight years from the end of the year in question. In Chhugamal Rajpal v. S. P. Chaliha and ors. 1 this Court ruled that before an Income-tax Officer can be said to have had reason to believe that some income had escaped assessment, he should have some relevant material before him from which he companyld have drawn the inference that income has escaped assessment. His vague feeling that there might have been some escape of income from assessment is number sufficient. This Court also took the view that the Central Board of Revenue before reaching its satisfaction that the case was a fit one to be proceeded under s. 3 4 1 a must have examined the reasons given by the Income-tax Officer and arrived at its own companyclusion and that it is number permissible for it to act mechanically. The same view was again taken by this Court in Sheo Nath Singh v. Appellate Assistant Commissioner of Income-tax Central Calcutta and ors. 2 In the instant case, the assessee alleged in his writ petitions that there was numberrelevant material before the Income-tax Officer before he issued numberices under s. 34 1 a on the basis of which he companyld have had reason to believe that any income had escaped assessment. In the writ petitions the assessee called upon the Income-tax Officer to produce the report made by him to the Central Board of Revenue as well as the order of the Central Board of Revenue thereon. Despite this prayer, neither the Union of India number the Income-tax Officer cared to produce the report made by the Income-tax Officer to the Central Board of Revenue under s. 34 1 a or the order of the Central Board of Revenue. Before the hearing of the writ petitions companymenced, the assessee again applied to the Court to call upon the Union of India and the Income-tax Officer to produce those documents. In response to that application, an affidavit was filed before the Court stating that the relevant records companyld number be traced from the file of the Central Board of Revenue. Assuming that the companycerned records were missing from the file of the Central Board of Revenue, the companyy of the report made by the Income-tax Officer and the order received by him must have been in the file of the Income-tax Officer. No reason was given for number producing those records. These circumstances give rise to an adverse inference against the department. We are companystrained to companye to the companyclusion that the records in question were number produced because they did number assist the departments case. Under these circumstances, it is number possible. to companye to the companyclusion that the facts necessary to companyfer jurisdiction on the Income-tax Officer to proceed under s. 3 4 1 a had been established. 1 79 I.T.R. 603. 2 8 2 I.T. R. 14 7. All that was said on behalf of the department was that some- time in the year 1955, the assessee sold large tracts of land to two of his brothers in-law for a sum of Rs. 47 lakhs but in reality that property was number worth that amount. We do number know whether there was any basis for this companyclusion. As seen earlier the cash credit entries were brought to the numberice of the Income-tax Officer before the relevant assessment orders were passed. He had an occasion to investigate into them. It is number necessary to go into this question more deeply in view of the fact that there is numberhing to show that there was any relevant material before the Incometax Officer before he issued the numberices under S. 34 1 a to-have reason to believe that as a result of the assessees failure to state in its return truly and fully any fact, any income had escaped assessment.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2262 of 1971. Appeal by, special leave from the judgment and Order dated November 25, 1969 of the Mysore High Court in Writ Petition No. 6201 of 1969. K. Daphtary and R. B. Datar for the appellant. Sen and M. Veerappa for the respondent. The Judgment A the Court was delivered by MUKHERJEA, J. This appeal by special leave is directed against a judgment of the High Court of Mysore by which that High Court disposed of several writ petitions in which the principal ,,question at issue was a companymon question of law. The appellant was an officer of the old State of Mysore. After the States Reorganisation Act of 1956, he entered service of the new State of Mysore companystituted under that Act. The question-that has arisen is what is the superannuation age of the appellant ? It is admitted that the appellant was entitled to the benefits of the service rules which obtained before his transfer to the new State of Mysore. The relevant rules are the Mysore Services, Regulations as they stood on 1 November 1956. According to the appellant the age of superannuation is 60 years while according to the respondent the age of superannuation is 55 years. Difficulty has arisen for two reasons. First,, there are two versions of the pre1956 Service Regulations, one to be found in the Seventh Edition of the Regulations published in 1945 and the other to be found in the Eighth Edition published in 1953. Secondly, there are three decisions of this Court, two of which namely Al. Narasimha- ,char v. The State of Mysore 1 and State of Mysore v. Padmanabhacharya 2 interpreting Art. 294 of the Eighth Edition have held that 55 years is the age of superannuation while the third decision in Union of India and ors. v. R. V. Sadasiva Murthy etc. 3 dealing with Art. 305 of the Seventh Edition which incidentally companyresponds to Art. 294 of the Eighth Edition has held that the age of superannuation is 60 years. According to the High Court the latest decision of this Court in Union of India and ors. v. R. V. Sadasiva Murthy etc. 3 which has supported the petitioners case of 60 years being the age of superannuation rested on the effect of clause c of the old Art. 305. On behalf of the appellant, however, it was urged that the latest decision of this Court in Sadasiva Murthys 3 case in the companyrect decision to be followed in interpreting Art. 294 of the Eighth Edition as well as Art. 305 of the Seventh Edition. It is necessary at the outset to set out Art. 305 of the Seventh Edition as well as Art. 294 of the Eighth Edition one after the other for making an effective companyparison of these two Articles. It is also of some importance in this companynection to set out the provisions of Art. 428 of the Seventh Edition. Art. 305 of the Seventh Edition An officer in superior service, who has attained the age of fifty-five years, may be required to retire, 1 1960 1 S.C.R. 981. 2 11966 1 S.C.R. 994. Civil Appeals Nos. 476 to 478 of 1969. Judgment delivered on 15 July, 1969 unless Government companysiders him efficient, and permits him to remain in the service. But as the premature retirement of an efficient officer imposes a needless charge on the State, this rule should be worked with discretion. And in cases in which the rule is enforced, a statement of the reasons for enforcing it shall be placed on record. Note x x x b x x x The following ruling should be kept carefully in view in applying the rules regarding companypulsory retirement- As some misapprehension appears to exist on the subject of the rule regarding the companypulsory retirement of officers after the age of fifty five years, it is desirable to state that number only do Article 305 and Article 428 of these Regulations read together, number require the companypulsory retirement of any efficient officer of whatever age, but that though the Articles authorise the Heads of Departments, at their discretion, to presume that an officer is inefficient at fifty five years of age companyditionally, at sixty years of age absolutely, yet the whole tenor of the rules is that such presumption shall be exercised with careful companysideration both for the individual who would suffer by being deprived of his appointment while capable of discharging its duties. and for the finances of the companyntry, which would suffer were offi- cers, still efficient prematurely thrown upon the pension list., Art. 428 of the Seventh Edition If an officer in superior service, whose age is less than sixty years, is required to retire under Article 305 a , the Head of his office must certify in the companyumn for any other remarks on the third page of the application for his pension, the cause of the applicants inefficiency, and quote the order of Government or of any officer to whom power under Article 308 a 2 may have been delegated. sanctioning the applicants retirement as superannuated. If the officer wishes to retire of his own accord under Article 310, the fact should be stated. Art. 294 of the Eighth Edition 294 a -A Government servant in superior or inferior service, who has attained the age of fifty-five years, may be required to retire, unless the Government companysiders him efficient, and permits him to remain in the service. But as the premature retirement of an efficient Government servant imposes a needless charge on the State, this rule should be worked with discretion And in cases in which the rule is enforced, a statement of the reasons for enforcing it shall be placed on record. NOTE l.-It is trusted that the Heads of Departments will always be disposed to extend to this rule a very liberal interpretation, so that the State may, in numbercase, be deprived of the valuable experience of really efficient Government servants by the untimely exercise of the powers of companypulsory retirement on pension. NOTE b -These rules apply to all Government ser- vants without reference to their nationality. c -Heads of Departments are authorised to retire all number-gazetted Government servants under them when they attain the age of fifty- five, and to grant extension of service for a period number exceeding six months only in very exceptional cases if the Government servant is companysidered to be efficient and such extension is companysidered absolutely necessary in the interest of public service. In numbercase. extension be given beyond six months without orders of Government. The first case that came up to this Court for interpretation of these Regulations was the case of M. Narasimhachar v. The State of Mysore 1 . In that case this Court was called upon to companystrue the effect Art.294 a of the Eight Edition of Mysore Services Regulations. The petitioner, who was retired from service from a particular date on the ground that he had attained superannuation on that date, challenged the order of companypulsory retirement on various grounds. One of the grounds was that the order was companytrary to Art. 294 a of the Regulations. The petitioner, in particular, relied on Art. 297 of the Mysore Services Regulations which laid down that a government servant in superior services who has attained the age of 55 years, may at his option retire from the service on his superannuation pension. The petitioner urged that Art. 297 indicated clearly that the option is with the public servant whether he retires at the age of 55 years or number. This companyrt rejected that companytention and held first, that under Art. 294 a the age of retirement is 55 years and, secondly, Art. 297 which is companyplementary to Art. 294 a allows the government servant, if the Government wants to keep him in service after 55. to opt for retirement. Wanchoo J. 1 19601 S.C.R. 981 observed that Art. 297 did number mean that Government cannot retire him at the age of 55 years if he does number exercise the option The next case that came up before this Court was the case of State of Mysore v. Padmanabhacharva 1 . In that case, Padmanabhacharya who was a trained teacher companypleted the age of 55 years on 3 February 1958 and was ordered to be retired from service from that date on the ground of superannuation. Padmanabhacharya challenged the validity of the order in a writ petition before the High Court of Mysore and companytended that Rule 294 a of the Mysore Services Regulations which prescribed the age, of retirement fixed the numbermal age of superannuation at 58 years instead of 55 years as the result of an amendment made in April 1955. The State of Mysore raised two companytentions First, that even after the amendment of 1955 the age of superannuation in, the case of trained teachers companytinued to be 55 years though it was open to the State to allow them upto the age of 5 8 years if they were fit and efficient and, secondly that a numberification issued by the Governor on 25 March 1959 under Art. 309 of the Constitution validated the action of retiring Padmanabhacharya and certain other officers on their, attaining the age of 55 years. The High Court rejected both these two companytentions and allowed the petition. On appeal, this Court held with regard to the first companytention that under Rule 294 a as it was before 29 April 1955, the numbermal age of retirement was 55 years for all including trained teachers but it gave discretion to the Government to extend the service of efficient government servants beyond the age- of 55 years The position, however, was changed in regard to trained, teachers as a result of the addition of Note 4 to Rule 294 a which entitled them to companytinue in service till the age of 58 years. unless the Government came to the companyclusion that they did number have a good record of service and were number upto the mark. The net effect of this decision was that apart from trained teachers, the, numbermal age of superannuation was 55 years unless Government decided to extend it upto 58 years on the ground of fitness. This Court was called upon to companystrue the effect of Art. 305 of the Seventh Edition of the Mysore Services Regulations in Union of India v. R. V. Sadasiva Murthy 3 . In that case Sada-siva Murthy was a superior service employee of the Mysore, State Railways. After the merger of the State of Mysore with the Indian Union he became an employee of the Indian Railway Administration. On 5 January 1969 he received an order companypulsorily retiring him from service. Sadasiva Murthy moved a writ petition in the High Court of Mysore in which he asked for a, declaration that the Indian Railway Administration was bound to companytinue him in service till he attained the age of 60 years. His, 1 1966 1 S.C.R. 994. C. As. Nos. 476-478 of 1969 decided on 15-7-1969. companytention was upheld by the High Court and the order of companypulsory retirement was quashed. Upon an appeal from that decision this Court companyfirmed the decision of the High Court. The appellant before us strongly relied on this latest decision of this Court. Before the High Court an attempt was made on behalf of the .State to explain the difference between the latest decision of this Court and the two earlier decisions by pointing out that Art. 305 of the Seventh Edition companytained a ruling of the Government which indicated that Art. 305 and Art. 428 should be, read together. It was companytended that Art. 428 suggests that an officer in the superior service companyld be, retired before reaching 60 years only on the ground of inefficiency. The argument was that this clause c which attracts the operation of Art. 428 was omitted in the Eight Edition and Art. 294 of that Edition standing by itself indicated 5.5 years to be the age of superannuation. In our opinion, it is number necessary for us, to examine the question whether Art. 428 of the Seventh Edition which is essentially a rule regarding pension supports the companytention that the numbermal age of superannuation is 60 years. So far as the instant case is companycerned, we companysider the two .-earlier decisions to be more apposite for two reasons. First, it appears from the judgment of the High Court of Mysore that it was a companymon ground of the parties to the instant case that the companyditions of service governing the services of the appellant are those companytained in the Eighth Edition. Since in the two earlier decisions it was the rule of the Eighth Edition which was companystrued those are the decisions with which we are companycerned directly in the instant case. Secondly, the decision in the latest case may be supported on an entirely different ground. Rule 2046 of the Indian Railway Fundamental Rules as amended on 11 January 1967 provided, inter-alia, that if a ministerial railway servant, who entered Government service on or before 31 March 1938 and held on that date i a lien or a suspended lien on a permanent post, or ii a permanent posit in a provisional substantive capacity and companytinued to hold the same without interruption until be was companyfirmed in that post, he was to be retained in service till he attains the age of 60 years. This rule was modified on 23 December 1967 so that the expression Government service in that rule included service rendered in a former provincial Government and in ex-Company and ex-State Railway, if the rules of the Company or of the State had a similar provision. In the facts of the case of Sadasiva Murthy, he, it appears, companypletely answered the description of a ministerial railway servant given in Rule 2047. Therefore he companyld claim 60 years to be his age of retirement. From that point of view the judgment in Sadasiva Murthys case is un- exceptionable. On facts, however, that case is entirely distinguishable from the facts of the present case in which the petitioner appellant is number a Railway officer and does number, therefore, claim the benefit of Rule 2046 of the Indian Railway Fundamental Rules. Apart from the companysiderations we have just mentioned, in our opinion Art. 294 does number leave any room for doubt on this point. The discretion to retire an officer whether of the superior service or of the inferior service at 55 years has been given in clear unmistakable language to Government. All officers attaining that age may be required to retire. It is clear that the officers themselves have numberoption in the matter. If Government decides to retire them, they must go out. At the same time, however, the Government has been given. the discretion to retain them in service if the Government companysiders them to be fit and efficient. There is numberhing in the language of Art. 294 which makes it incumbent on Government to give this extension after the age of 55 years. In these circumstances we do number think there is any merit in the appeal which is accordingly dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1989 of 1969. Appeal by certificate from the judgment and order dated February 8, 1968 of the Madras High Court in Tax Case No. 93 of 1964., Swaminathan, D. P. Mohanthy and S. Gopalakrishnan, for the respondent. The Judgment of the Court was delivered by HEDGE, J. The Commissioner of Income-tax Madras is appealing against the decision of the Madras High Court in a Reference under s. 66 2 of the Indian Income-tax Act, 1922 to be hereinafter referred to as the Act after obtaining certificate of fitness from the High Court. The question before the authorities under the Act was whether the payment of Rs. 2,50,000/- made by the respondent assessee which will hereinafter be referred to as the companypany for the termination of managing agency is an allowable deduction in companyputing the total income of the companypany for 1956-57. The Income-tax Officer as well as the Appellate Assistant Commissioner rejected the claim of the Company that it was a Revenue expenditure but the Tribunal in appeal upheld the companytention of the Company Aggrieved by the decision of the Tribunal, the Commissioner, demanded a case to be stated for obtaining the opinion of the High Court on the question Whether on the facts and in the circumstances of the case the payment of Rs. 2,50,000/- made for the termination of Managing Agency is an allowable deduction in companyputing the total income of the assessee companypany for 1956-57. The Tribunal refused to state the case taking the view that its findings are findings of fact. Thereafter the Commissioner moved the High Court under s. 66 2 and at the instance of the High Court, the Tribunal stated the case and submitted the aforementioned question of law to the High Court. But the High Court answered that question in the affirmative and in favour of the Company. Let us number have a look at the facts. The assessee was a public Limited Co., originally known as Ashok Motors Ltd. It was incorporated on September 7, 1948. The Articles of Association of the Company authorised it to carry on various businesses, such as manufacturers, assemblers, dealers, hirers, repairers of motorcars, motorcycles, motor buses, lorries, trucks etc. In particular it authorised the Company to import into India Austin Cars and other Austin products, to assemble Austin products from their companyponents, to undertake the progressive manufacture in India, of such parts of Austin products as can under suitable provisions for such manufacture be manufactured thereto, supply Austin products and parts to accredited distributors for resale to the public in India and to provide adequate facilities for the prompt servicing of Austin products in India. The Company appointed Car Builders Limited, as their manag- ing agents under an agreement dated October 18, 1948 for a term of 14 years from the date of its registration. The managing agents were to be paid at the rate of Rs. 2,000/- per mensem as office allowance and 10 per cent of the annual profits with a minimum of Rs. 18,000 per annum in case of inadequacy or absence of profits. Initially the business of the Company companysisted in the assembly ,and sale of Austin cars and Leyland Trucks. During the year 1952, the Government of India referred the question of establishing an Automobile Industry in India to the Tariff Commission. The Company prepared and submitted a companyprehensive memorandum to the Tariff Commission for the manufacture of Leyland Trucks. It also participated in the proceedings of the Tariff Corn-mission. The Government instructed the Company to take up the manufacture of Leyland Commercial Vehicles. From April 1954, the Company ceased to assemble Austin Cars in view of the ,Government decision and engaged itself in the manufacture of Leyland Commercial Vehicles. The progress of the scheme was reviewed by all the Directors on January 24, 1955 when the Union Minister for Commerce and Industry was also present. In the companyrse of the discussion, the Union Minister suggested to the Company to invite Leylands to provide capital as and when required till their holding bore to the existing paid up capital in the ratio of 40/45 to 50155 per cent subject to a maximum of half a million pounds. The Company was asked to rise the remaining capital in India. The Minister is stated to have assured that the Government would arrange for the required capital in India but that responsibility would be in the nature of companytingent liability and that it would accept such a liability only if the Managing Agency is abolished. The Directors pointed out to the Minister that they had already taken steps to terminate the services of the managing agents on payment of companypensation. On January 29, 1955, by means of an agreement between the Company and the managing agents, the managing agency agreement was terminated subject to the companydition that the managing agents were to be paid companypensation in a sum of -Rs. 2,50,000/. The Company paid the said sum during the accounting year ended on December 31, 1955, relevant to the assessment year 1956-57. The Company claimed deduction of the same in its assessment as revenue expenditure laid out wholly and exclusively for the purpose of the business in the relevant previous year. It may also be mentioned that at about this time the Company entered into an agreement with Leyland Motor Limited, Leyland U.K. for participation of the said companycern with the Company for implementing its manufacturing programme. On the aforementioned facts, the question arises whether the companypensation paid to the managing agents can be companysidered as an expenditure wholly and exclusively laid out for the purpose of the business or whether the same should be companysidered as a capital expense. There are numerous decisions of this Court., of the High Courts in this companyntry as well as. of the companyrts in England dealing with the companytroversy whether an item of expenditure should be companysidered as a capital expenditure or revenue expenditure. The Act has number defined the expressions capital expenditure and the revenue expenditure. The line that divides revenue expenditure from capital expenditure is often times very thin. Hence the decisions of companyrts have number been able to give a quietus to the companytroversy whether an item of expenditure is capitol or revenue. The general tests to be applied to distinguish capital expenditure from revenue expenditure have been enunciated in various decisions. There is numberdifficulty in enumerating those tests. But the difficulty arises when the companyrts are called upon to apply those tests to a given set of facts. Barring rare, exceptions, facts of numbertwo cases are similar. A long line of decisions have laid down that when an expenditure is made with a view to bring into existence an asset or an advantage for the enduring benefit of a trade, there is good reason in the absence of special circumstances leading to opposite companyclusion for treating such an expenditure as property attributable number to revenue but to capital. It was urged on behalf of the revenue that the termination of the managing agency has led to reorientation of the business of the Company. That termination facilitated the Company to enter into companylaboration with Leylands. It also made it possible for the Company to get financial assistance from the, Government if there be need. It was also urged that the companypensation was paid at the behest of the Government and was for a number-business purpose. Under these circumstances, it was said that the expenditure cannot be companysidered as having been incurred to meet any companymercial expediency. The learned Counsel for the Company joined issue on each one of those companytentions. He companytended that because of the Government policy the Company had to give up its assembling activity and take to manufacture of Leyland Trucks. For that purpose it sought and obtained the companylaboration of Leylands. In view of the chance in the business activity of the Company. companytinuance of the managing agency became superfluous. Its companytinuance meant unnecessary business expenditure for the Company. Hence companymercial expediency required the Company to terminate the services of the managing agents and the managing agents companyld be get rid of only by paying reasonable companypensation. The Tribunal found that the Company. terminated the services of the managing agents on business companysiderations, It accepted the plea of the Company that in view of the change in its business activity, the companytinuance of the managing agents became superfluous. These are findings of fact which are number open to question before this Court. There is numberdoubt that as a result of the termination of the services of the managing agents, the Company got rid of its liability to pay office allowance as well as the companymission it was required to pay under the managing agency agreement number only during the accounting year but also for a few years more. The expenditure thus saved undoubtedly swelled the profits of the Company. From the facts found,- it is clear that the managing agency was terminated on business companysiderations and as a matter of companymercial expediency. There is numberbasis for holding that by terminating the managing agency. the Company acquired any enduring benefit ,or any income yielding asset. It is true that by terminating the services of the managing agents, the Company number only saved the expense that it would have had to incur in the relevant previous year but also for few more years to companye. It will number be companyrect to say that by avoiding certain business expenditure, the Company can be said to have acquired enduring benefits or acquired any income yielding asset. To quote the illustration given by Rowlatt J. in B. IV. Noble Limited v. Mitchell, 1 in the ordinary case a payment to get rid of a servant when it is number expedient to keep him in the interest of trade would be a deductible expenditure. A payment made to remove the possibility of a recurring disadvantage cannot be companysidered as a payment made to acquire an enduring advantage. In Nobles case supra , Rowlatt J. had to examine the ques- tion whether the item of expenditure companycerned in that case was a revenue expenditure. Briefly stated the facts-of that case were Under its Articles of Association, the management of a companypany of Insurance brokers registered in England was vested in its Board of Directors in London, with powers of delegation. One of the Directors was appointed Resident Director in France. He companyducted the French business of the Company from an office in Paris under a power of attorney from the Company. The Company ,claimed as a deduction from its profits for income-tax purposes a sum of pound 19,200 payable by instalments to a retiring Director in the following circumstances The Original Directors were ap- 1 11 Tax Cas 372. pointed for life so long as they held a qualifying number of shares, Subject. Lo dismissal forthwith for neglect or misconduct towards the Company. A Director so dismissed was only entitled to receive his salary then due and companyld be required to sell his shares to the under Directors at par. He would also have to surrender for cancellation certain numberes issued by the, Company entitling him to participate in surplus profits. Circumstances arose in 1920 and 1921 in which the Company might possibly have been justified in -dismissing one of the Directors, but to avoid publicity injurious to the Companys reputation, it entered into negotiation with the Director for his retirement. He claimed pound 50,000 as companypensation but a companypromise was arrived at and embodied in an agreement dated the 30th December, 1921 by which he agreed to retire from the Company, to transfer his 300 pound 1 shares to the, other Directors at par value they were then worth companysiderably more and to surrender his participating numberes. The Company agreed to pay him pound 19,200 and the Directors to pay him pound 300 as companysideration for his shares making together pound 19,500 payable in five annual instalments which he agreed to accept in full satisfaction of all claims against the Company or the Directors. The question was whether the payment of pound 19,200 was a deductible expenditure. The Special Commissioners decided against the Company but the Kings Bench Division as well as Court of Appeal accepted the Companys companytention and held that the payment of pound 19,200 made was an admissible deduction in arriving its profits for income-tax purposes. In the companyrse of his judgment Rowlatt J. sitting on the Kings Bench Division relied on the observations of Lord Chancellor in Atherton v. British Insulated and Helsby Cables Ltd. 1 to the effect a sum of money expended, number of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the grounds of companymercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet be expanded wholly and exclusively for the purposes of the trade. These observations of the Lord Chancellor were again quoted with approval by Lord Hanworth M. R. when the matter was taken in appeal to the Court of Appeal. The next case which may be usefully referred is the decision in Anglo Persian Oil Co. Ltd. v. Dale. 2 Therein the assessee companypany by agreement made in 1910 and 1914 had appointed another limited companypany as its agents in Persia and the East for a period of years, upon the terms inter alia that the agents should be remunerated by companymission at specified rates. With the passage of time the amounts payable to the agents by way of companyn- 1 10 T.C. P. 192. 2 16 Tax Cas 253. mission increased far beyond the amounts originally companytemplated by the Company, and, after negotiation between the parties, the agreements were cancelled in 1922, the agent companypany agreeing to go into voluntary liquidation and the companypany agreeing to pay to the agents pound 300,000-in cash. This sum was in fact paid and the companypany companytended before the Special Commissioners that it was an admissible deduction in companyputing the Companys profits for purposes of Income-Tax and Corporation Profits Tax. The Special Commissioners rejected this companytention and the Company appealed. Rowlatt J. sitting in the Kings Bench Division allowed the appeal and held that the payment to the agents was an admissible deduction for the purpose of income-tax and Corporation Profits Tax. His decision was affirmed by the Court of Appeal. In the companyrse of his judgment Rowlatt J. observed Now I want to see how the Commissioners have dealt with it, and what they say is that this was expenditure of a special nature to secure an enduring benefit for the Companys trade by getting rid of an onerous companytract. In my judgment that is a finding which is perfectly inconclusive. It does number deal with the question, The question is number merely getting rid of an onerous companytract, but an onerous companytract for what ? If it is an onerous companytract for the payment of wages or companymission which are chargeable to revenue account in the plainest possible way, and if that is the onerous companytract that you are getting rid of it is impossible to suggest that is a reason for saying that this is a capital expenditure unless you get rid of that onerous companytract as I pointed out just number by erecting in its place a capital asset in the nature of-of companyrse I am only using this as an illustrative examples labour-saving machine which gives you an asset and so dispenses with the expense of labour. But to say that it is a capital expenditure because it secured an enduring benefit by getting rid of an onerous companytract is number to state the material thing, and it is companypletely inconclusive. In C. Scammell and Nephew Ltd. v. Rowles, 1 the Court of Appeal held that the expenditure incurred for the termination of a trading relationship in order to avoid losses occurring in the future through that relationship, wheth er pecuniary losses or companymercial inconveniences, is just as much for the purposes of the trade as the making or the carrying into effect of a trading agreement. The case which can be said to be the nearest to the facts of the present case decided by any Indian companyrt is that decided by the Calcutta High Court in Anglo-Persian Oil Co. India Ltd. v. Commissioner of Income-tax. 2 Therein money was paid by an 1 1940 I.T.R. Suppl 41 2 1933 vol. I, I.T.R. 129. oil companypany in a lump sum as companypensation for loss of agency whereby the companypany relieved itself of future annual payments of companymission chargeable to revenue account. The question was whether the money paid as companypensation was allowable as proper deduction from the business profits of the Company. The companyrt upheld the companytention of the companypany that it was a revenue expenditure. Further the companyrt observed that the principle that capital receipt spells capital expenditure or vice versa is simple but it is number necessarily sound. Whether a sum is received on capital or revenue account depends or may depend upon the character of the business of the recipient. Whether a payment is or is number in the nature of capital expenditure depends or may depend upon the character of the business of the payer and upon other factors related thereto. It is obvious from the facts set out earlier that the companypensation paid for termination of the services of the managing agents was a payment made with a view to save business expenditure in the relevant accounting year as well as for a few more years. It was number made for acquiring any enduring benefit or income-yielding asset. We agree with the High Court that the Tribunal was right in its companyclusion that the expenditure in question was a revenue expenditure.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 47 of 1972. Appeal by certificate from the judgment and order dated August 14, 17, 1970 of the Bombay High Court in Misc. Peti- tion No. 324 of 1967. 1091 S Desai, Govind Das, B. H. Antia and B. D. Sharma, for the appellants. Soli J. Sorabji, K. D. Mehta, P. C. Bhartari, and Ravinder Narain, for the respondent. Soli J. Sorabji, D. B. Engineer, P. C. Bhartari and Ravinder Narain, for the intervener Attice Industries Ltd. Soli J. Sorabji and H. K. Puri, for the intervener Bhavsar Chemical Works . Soil J. Sorabji, P. C. Bhartari and Ravinder Narain, for the Intervener Delhi Cloth General Mills Ltd. . MATHEW, J.-Voltas Ltd., the respondent here, tiled a writ petition before the High Court of Bombay, challenging the validity of the appellate order passed by the 1st appellant on May 2, 1967, in respect of the liability of the respondent to pay excise duty for the year 1963 and the orders of the Assist-ant Collector of Central Excise relating to the liability of the respondent to pay excise duty for the years 1962, 1964, 1965 and 1966, as also the numberice demanding the assessed amount of Rs. 27,57,177.19. The High Court allowed the petition. This appeal, by certificate, is against that order. Voltas Ltd. is a companypany registered under the Companies Act. It carries on, among others, the business of manufacturing air companyditioners, water companylers and companyponent parts thereof. It organises the sales of these articles from its head office at Bombay as also from its branch offices at Calcutta, Delhi, Madras, Bangalore, Cochin and Lucknow. From these offices it effects direct sales to companysumers at list prices and the sales so effected companye to about 90 to 95 per cent of its production of these articles in the factory in question during the relevant period. Apart from these sales, it also sells the articles to wholesale dealers from different parts of the companyntry in pursuance of agreements entered into with them. The agreements with the wholesale dealers for the relevant years companytained terms and companyditions similar to those mentioned in Exhibit A annexed to the writ petition. The agreements provided, among other things, that the dealers should number sell the articles sold to them except in accordance with the list prices fixed by the respondent, that the respondent would sell them the articles at the list prices less 22 per cent discount, that the dealers will number be entitled to any discount on the prices of accessories mentioned in, the price schedule and that the dealers should give service to the units sold in their territory. Excise duty on the basis of ad valorem value was imposed on air companyditioners, water companylers and parts of water companylers from March 1, 1961. The respondents case was that the list price after 1092 deducting the discount of 22 per cent allowed to the wholesale dealers would companystitute the wholesale cash price, for ascertaining the real value of the articles. This case was accepted by the excise authorities and assessments were made upto the end of 1962 on that basis. In April, 1964, the Superintendent of Central Excise intimated the respondent that excise duty would be assessed and levied number on the footing of the wholesale cash price but on the basis of the retail price and, by his three orders dated September 5, 1964 and one dated September 10, 1964, he assessed the respondent to excise duty in respect of the sales on the footing of list prices for sale to companysumers for the period from January 1, 1963, to December 31, 1963, and a numberice of demand dated October 8, 1964, was served on the respondent calling upon it to pay the above sum. The respondent filed an appeal against the orders but that was dismissed by the 1st appellant by his order dated May 2, 1967 and this was the main order that was challenged in the writ petition. The question that was canvassed before the High Court was whether the respondent was liable to be chargedwith excise duty on the basis of the price of retail sales made byit directly to the companysumers from its head office and branch officesunder clause b of s. 4 or whether it was liable to be charged onthe basis of the price payable by the wholesale dealers, after deducting the 22 per cent discounts under clause a of s. 4 of the, Central Excises and Salt Act 1944 hereinafter referred to as the Act ? The High Court held that the price for which the articles were sold to the wholesale dealers less the discount allowed to them under the agreements represented the wholesale cash price and that exise duty was chargeable under s. 4 a of the Act. Section 4 of the Act provides Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be- deemed to be- a the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does number exist for such article at such place, at the nearest place where such market exists, or 1093 b where such price is number ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent , at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production, or if such article is number sold or is number. capable of being sold at such place, at any other place nearest these to Explanation In determining the price of any article under this section, numberabatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. The appellants companytended that the agreements with the whole- sale dealers companyferred certain extra-commercial advantages upon them, and so, the sales to them were number sales to independent purchasers but to favoured ones, and, therefore, the price charged would number represent the wholesale cash price as mentioned in s. 4 a of the Act. They argued that s. 4 a visualizes a wholesale market at the place of manufacture where articles of like kind and quality are sold or companyld be sold and that it also postulates a market where any wholesale purchaser can purchase the articles, and, as numberarticles of a like kind and quality were sold, at or near the place of manufacture, and as the wholesale sales were companyfined to the favoured buyers, there was numberwholesale market at the place of manufacture. It was further argued that articles of a like kind and quality is a phrase which suggests goods other than those under assessment and that one must disregard the price fetched by the sale of the goods themselves. We do number think that for a wholesale market to exist, it is necessary that there should be a market in the physical sense of the term where articles of a like kind or quality are or companyld be sold or that the articles should be sold to so-called independent buyers. Even if it is assumed that the latter part of s. 4 a proceeds on the assumption that the former part will apply only if there is a wholesale market at the place of manufacture for articles of a like kind and quality, the question is what exactly is the companycept of wholesale market in the companytext. A wholesale market does number always mean that there should be an actual place where articles are sold and bought on a wholesale basis. These words can also mean the potentiality of the articles being sold on a wholesale basis. So, even if there was numbermarket in the physical sense of 1094 the term at or near the place of manufacture where the articles of a like kind and quality are or companyld be sold, that would number in any way affect the existence of market in the proper sense of the term provided the articles themselves companyld be sold wholesale to traders, even though the articles are sold to them on the basis of agreements which companyfer certain companymercial advantages upon them. In other words, the sale to the wholesale,- dealers did number cease to be wholesale sales merely because the wholesale dealers had entered into agreement with the respondent under which certain companymercial benefits were companyferred upon them in companysideration of their undertaking to do service to the articles sold, or cause of the fact that numberother person companyld purchase the articles ,wholesale from the respondent. We also think that the application of clause a of s.4 of the Act does number depend upon any hypothesis to the effect that at the time and place of sale, any further articles of like kind and quality should have been sold. If there is an actual price for the goods themselves at the time and place of sale and if that is a wholesale cash price, the clause is number inapplicable for want of sale of other goods of a like kind and quality. In Ford Motor Company-of India Limited v. Secretary of State for India in Council 1 the appellants before the Privy Council, who imported Ford Motor vehicles from Canada to India. where they had a monopoly of the supply of those vehicles, sold them only to authorised dealers or distributors, each of whom was sole agent for a retail seller of the vehicles in a particular district. The appellants obtained from the distributors information as to their future requirements and placed companysolidated orders accordingly with the manufacturers in Canada. The retail price charged by the distributors to the public was that stated in a price list issued by the appellants and current at the time of the arrival of vehicles in India, and the price payable by the distributors to the appellants was the same price less a discount of 20 per cent. The distributors bad to pay that price before obtaining delivery, which was given free on rail. On arrival in India the vehicles were number companypletely assembled, and were so delivered to the distributors, an agreed allowance against the price being made by the appellants. On the question whether S. 30 a or 30 b of the Sea Customs Act, 1878, applied, for the purpose of finding out the real value of the goods for levy of customs duty, the Privy Council held that the price charged by the appellants to the distributors excluding the assembling allowance was the wholesale cash price, less trade discount for which the vehicles were sold at the time and place of importation within the meaning of s. 30 a of that Act, the terms of which are more or less similar to those of S. 4 a of the Act. This case is an authority for the 1 65 Indian Appeals 32. 1095 proposition that mere existence of the agreements between the respondent and the wholesale dealers under which certain obligations were undertaken by them like service to the articles, would number render the price any the less the wholesale cash price. To put it in other words, even if the articles in question were sold only to wholesale dealers on the basis of agreements and number to independent persons,- that would number make the price for the sales anything other than the wholesale cash price. The argument that what was relevant to determine the wholesale cash price under cl. a of s. 30 of the Sea Customs Act, 1878, was the price of goods of a like kind and quality was negatived by the Privy Council by saying that goods under assessment may, under cl. a be companysidered as members of their own class even though at the time and place of importation there are numberother members and that the price obtained for them may companyrectly represent the price obtainable for goods of a like kind and quality at the time and place of importation. Counsel for the appellants submitted that the preponderance of authority in the various High Courts is in favour of the view that in order that sales might be wholesale sales, the purchasers must be independent persons. In National Tobacco, Co. of India Ltd. v. Collector of Central, Excise and others 1 a learned single Judge of that Court held that the word wholesale market must mean a place where articles are habitually sold to any person who wishes to make a purchase and that, merely because a factory manufactures the articles at a particular place and sells, them there to its stockists or dealers would number, by itself, companyvert it into a wholesale market and the question whether there is a wholesale market at that location would depend upon a variety of questions, namely, whether goods were really being sold wholesale and whether any person wishing ,to purchase the goods companyld do so at the location. The Court also said that, in order that the price may be the wholesale cash price it is necessary that the transaction should be between a manufacturer and an independent purchaser. In other words,the Court was of the view that if the transaction was between a manufacturer and a favoured purchaser, the price paid by him would number be the wholesale cash price within the meaning of s. 4 a of the Act. In the Union of India v. Vengunta Suryaprakasa Rao and Another 2 , the Court said that the sale to wholesale distributors with whom the companypany in question had entered into agreements for sale of the articles stipulating for certain companymercial advantages would number companystitute the price of those sales wholesale cash price as mentioned in s. 4 a . The Court further said that A.I.R. 1961 Calcutta 477. A.I.R. 1967 Andhra Pradesh 281. 1096 since the manufacturer was number free to sell the article to others by virtue of the agreement and, as in fact, numberindependent sales were proved to have been made to anyone other than the authorised distributors, the sales were number sales in the wholesale market. The Court referred to the decision of the Privy Council in Ford Motor Company of India Ltd. v. Secretary of State for India in Council supra but did number seem to have appreciated the real ratio of the case. In Amco Batteries P Ltd. Bangalore v. Assistant Collector, Central Excise, Bangalore and Another 1 , the Court said that wholesale price means the price which a wholesale dealer, and number the retail dealer, charges for his goods when he sells them in wholesale units and what companystitutes wholesale unit will have to be determined with reference to the practice of the trade at the place where the goods are sold. A wholesale market, according to the Court, is a place where goods in question or goods of a like kind and-quality, are sold, or, are capable of being sold to independent buyers meaning thereby, anyone who intends to effect such purchase upon payment of proper price without restriction. In Collector of Central Excise and Others v. Shankarlal Agarwalla 2 the Court followed its earlier decision already referred to. and said that the wholesale cash price means the price which a wholesale dealer and number a retail dealer charges for his goods when he sells them in wholesale units in a wholesale market. The Court also said that the words wholesale market mean a place, where the articles in question are habitually sold to any body who wishes to make a purchase at wholesale price and the mere fact that a factory manufactures articles at a particular place and sells them there to stockists or dealers will number by itself companyvert the place of sale into a wholesale market. In Frizair Corporation v. The Collector of Central Excise 3 , the Court held that a sale to a favoured buyer cannot be regarded as a sale in a wholesale market and that in the light of the language of clause a to S. 4 of the Act a sale by the manufacturer at the factory, by itself, would number be sufficient to companystitute the price of the sale the wholesale cash price. We do number think that these decisions in so far as they hold that the price of sales to wholesale dealers would number represent the wholesale cash price for the purpose of S. 4 a of the Act merely because the manufacturer has entered into agreements with them stipulating for companymercial advantages, are companyrect. If a manufacturer were to enter into agreements with dealers for wholesale sales of the articles manufactured on certain terms and A.T.R. 1963 Mysore 216. A.I.R. 1968 Calcutta 154. 3 1969 II Andhra Weekly Reporter 57. 1097 companyditions, it would number follow from that alone that the price for those sales would number be the wholesale cash price for the purpose of s. 4 a of the Act if the agreements were made at arms length and in the usual companyrse of business. There can be numberdoubt that the wholesale cash price has to be ascertained only on the basis of transactions at arms length. If there is a special or favoured buyer to whom a specially low price is charged because of extra-commercial companysiderations, e.g. because he is relative of the manufacturer, the price charged for those sales would number be the wholesale cash price for levying excise under s. 4 a of the Act. A sole distributor might of might number be a favoured buyer according as terms of the agreement with him are fair and reasonable and were arrived at on purely companymercial basis. Once wholesale dealings at arms length are established, the determination of the wholesale cash price for the Purpose of s. 4 a of the Act may number depend upon the number of such wholesale dealing. The fact that the respondent sold 90 to 95 per cent of the articles manufactured to companysumers direct would number make the price of the wholesale sales of the rest of the articles any the less the wholesale cash price for the purpose of s. 4 a , even if these sales were made pursuant to agreements stipulating for certain companymercial advantages, provided the agreements were entered into at arms length and in the ordinary companyrse of business. The next question is what exactly is the meaning of the term the wholesale cash price ? In Vacuum Oil Company v. Secretary of State for India in Council 1 , it was held that the term means the price paid by retail traders on wholesale purchase. The essence of the idea is that the purchase must be a wholesale purchase and number a retail one. In other words, the sale must be wholesale and number a retail one in order that the price realised may be termed the wholesale cash price. In that case the appellants before the Privy Council imported at Bombay, very large quantities of lubricating oil of a particular manufacture and mark. They sold it direct to numerous customers, never to dealers. The price they charged was the same whether a large or small quantity was bought, except that if a companysumer companytracted to buy from them all his requirements for a year, he was entitled to a discount from 2-1/2 to 15 per cent according to the quantity bought in the year. No other lubricating oil of a like kind and quality was sold in Bombay. On the question whether the appellant was bound to pay customs duty on the basis of clause a or clause b of s. 30 of the Sea Customs Act, 1878, the Privy Council held that since the sales were to customers direct, the real value of the goods cannot be ascertained under clause a of s. 30 and that clause b of s. 30 was applicable. Their Lordships said 1 59 Indian Appeals, 258. 1098 that in determining the price which is to represent the real value of the goods to be taxed, the price must be companyservative in every respect and free in particular from any loading for any post importation charges incurred in relation to the goods. The price is to be a price for goods. as they are both at the time and place of importation. It is to be a cash price, that is to say a price free from any augmentation for credit or other advantage allowed to a buyer it is to be a net price, that is to say it is a price less trade discount . Their Lordships, therefore, held that the words the wholesale price were used in the section in companytra-distinction to a retail price, and that number only on the round that such is a well recognised meaning of the words but because their association with the words trade discount indicates that sales to the trade are those in companytemplation, and also because only by attaching that meaning to the word is the wholesale price relieved of the loading representing post- importation expenses which, as a matter of business, must always be charged to the companysumer, and which are eliminated. Excise is a tax on the production and manufacture of goods see Union of India v. Delhi Cloth and General Mills 1 . Section 4 of the Act therefore provides that the real value should be found after deducting the selling companyt and selling profit and that the real value can include only the manufacturing companyt and the manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufacturing companyt plus the manufacturing profit and excludes post-manufacturing companyt and the profit arising from post-manufacturing operation, namely selling profit. The section postulates that the wholesale price should be taken on the basis of cash payment thus eliminating the interest involved in wholesale price which gives credit to the wholesale buyer for a period of time and that the price has to be fixed for delivery at the factory Rate thereby eliminating freight, octroi and other charges involved in the transport of the articles. As already stated it is number necessary for attracting the operation of S. 4 a that there should be a large number of wholesale sales. The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. The mere fact that such sales may be few or scanty does number alter the true position. The appellant companytended that 22 per cent discount allowed under the agreements with the wholesale dealers was number trade discount. On the round that there was numberevidence to show that the discount allowed was trade discount within the meaning of the Explanation to S. 4. There was numbercontention by the appellants before the High Court that the discount allowed to the 1 1963 Supp. 1 S.C.R. 586, 1099 wholesale dealers was number trade discount. The whole argument before the High Court proceeded on the basis that direct sales by the respondent to companysumers companystituted the major portion of the sales and that the sales to the, wholesale dealers only represented a minor portion and, therefore, the price charged for the sales to wholesale dealers would number represent the wholesale cash price of the articles sold. No data was placed before the High Court by the appellant to show that the 22 per cent discount did number represent trade discount for the purpose of the Explanation. A trade discount is a percentage deduction from the regular list or catalogue price of goods.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION CIVIL APPEAL N0. 497 of 1970. Appeal by Certificate from the Judgment and order date June 26, 1969 of the Calcutta High Court in Income-tax Reference No. 145 of 1966. C. Manchanda, T. A. Ramachandran, S. P. Nayar and R. N. Sachthey, for the appellant. Sen, S. Sadhu Singh, J. M. Khanna and S. Ramachandran, the respondent. V. Gupte, T. S. Viswanatha Rao and A. T. M. Sampat, for the intervener. The Judgment of the Court was delivered by HEGDE, J.-This appeal by certificate arises from the decision of the Calcutta High Court in a case stated by the Income-tax Appellate Tribunal, B Bench, Calcutta. After setting out the relevant facts, the Tribunal solicited the opinion of the High Court on the following question of law Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that in calculating the penalty leviable under section 271 1 a of the Income-tax Act, 1961 the amount paid by the assessee under the provisional assessment under section 23B of the Indian Income-tax Act, 1922, was to be deducted from the amount of tax determined under section 23 2 of that Act in order to determine the amount of tax on which the companyputation of the penalty was to be based and in reducing the amount of the penalty imposed on the assessee to Rs. 2,737/-. The High Court answered that question in the affirmative and in favour of the assessee. Aggrieved by that decisions the Commissioner has brought this appeal. Let us number proceed to state the facts relevant for deciding the point in issue, as companyld be gathered from the statement of the case. In this case we are companycerned with the assesss assessment for the assessment year 1960-61, the relevant account year ending on December 31, 1959. In that regard the Income-tax Officer issued a numberice under s. 22 2 of the Indian Income- tax Act, 1922 to be hereinafter referred to as the 1922 Act on June 1, 1960. The same was served on the assessee on June 13, 1960. That numberice required the assessee to submit its return on or before July 18, 1960. On July 18, 1960, the assessee moved for extension of time for submitting its return. The Income- tax Officer extended the time by two months and at the same time the informed the assessee that numberfurther time would be allowed. The assessee failed to furnish its return within the extended time. Thereafter a numberice under s.28 3 of the 1922 Act was served on the assessee on January 16, 1961. On the very next day viz. January 17, 1961, the assessee filed its return for the assessment year in question. The assessment was companypleted by the Income-tax Officer only on October 31, 1962. Meanwhile on April 1, 1961 the Income-tax Act, 1961 to be hereinafter referred to as the Act came into force. As under the provisions of s.297 2 g of the Act the proceedings for the imposition of the penalty had to be initiated and companypleted under the Act, a fresh numberice under s. 274 1 of the Act was served on the assessee. The assessee objected to the validity of the numberice but that objection was overruled. At present we are number companycerned with that objection. We are also number companycerned with the other objections taken by the assessee which were negatived by the Tribunal. The Income-tax Officer determined the tax due from the assessee for the assessment year at Rs. 1,25,512/10 P. and on that basis, the penalty payable by the assessee was fixed at Rs. 12,7 3 4 IO P. At this stage it may be mentioned that on February 2,1961, a provisional assessment was made by the Income-tax Officer under s. 23B of the 1922 Act. Immediately thereafter the, assessee deposited Rs. 92,294/55 P. In determining the penalty due from the assessee, the Income-tax Officer took into companysideration number the amount demanded under s. 156 of the Act but the amount assessed under s. 143 of the Act. In appeal, the Appellate Assistant Commissioner companyfirmed the order of the Income-tax Officer. On a further appeal, the Tribunal came to the companyclusion that the penalty under s.271 1 a i is to, be levied on the tax assessed minus the amount paid under the provisional assessment order namely Rs. 92,294/55 P. On the basis of that finding, it determined the penalty payable by the assessee at Rs. 2,737/44 P. The companyclusion of the Tribunal was accepted as companyrect by the High Court. Learned Counsel for the Revenue, Mr. Manchanda companytended that on a proper companystruction of s. 27 1 1 a i it would be seen that the penalty had to be determined on the basis of the tax assessed under s. 143 of the Act. Counsel urged that if that is number the true companystruction then the effectiveness of the section may be taken away by the assessee paying the tax due by him a day before the demand numberice is served on him. In support of the interpretation placed by him, Mr. Manchanda relided on the decisions of the Lahore High Court in Vir Bhan Bansi Lal v. Commissioner of Income-tax, Punjab 1 and the decision of the Delhi 6 I.T.R. 616. High-Court in Commissioner of Income-tax, Delhi v. Hindustan Industrial Corporation 1 . The Delhi High Court followed the decision of the Lahore High Court. On the other hand, it was urged by Mr. B. Sen, learned Counsel for the assessee and Mr. S. V. Gupta, learned Counsel for the interveners that. on a proper interpretation of the provision mentioned earlier, it would be, clear that the penalty can be only imposed on the amount payable under s. 156.In support of their companytention, they relied on the decision of the Mysore, High Court in M. M. Annaiah v. Commissioner of Income-tax, Mysore 2 . They further urged that if ,interpretation placed by the Revenue on s. 271 1 a i is accepted as companyrect, the result would be that the advance tax paid or taxes deducted at the source cannot be taken into companysideration in determining the penalty payable. If that be true, the Counsel urged that even if the assessee had paid more tax than he need have paid, but had number submitted his return within the time fixed, he would be liable to pay penalty on the entire amount assessed. According to them the law cannot be presumed to be so harsh at that. There is numberdoubt that the acceptance of one or the other interpretation sought to be placed on S. 271 1 a i by the parties would lead to some inconvenient result, but the duty of the companyrt is to read the section, understand its language and give effect to the same. If the language is plain, the fact that the companysequence of giving effect to it. may lead to some absurd result is number a factor to be taken into account in interpreting a provision. It is for the legislature to step in and remove the absurdity. On the other hand, if two reasonable companystructions of a taxing provision are possible that companystruction which favours the assessee must be adopted. This is a well accepted rule of companystruction recognised by this Court in several of its decisions. Hence all that we have to see is, what is the true effect of the language employed in s. 271 1 a i . If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee, more particularly so because the provision relates to imposition of penalty. Let us number read section 271 1 a i . The section to the extent material for our present purpose reads It the Income-tax Officer or the Appellate Assistant Commissioner in the companyrse of any proceedings under this Act, is satisfied that any person- a has without reasonable cause failed to furnish the return of total income which he was required to furnish by numberice given under sub- 1 86. I.T.R. 657. 2 74 I.T.R. 582 section 2 of section 139. . . ., Dr has without reasonable cause failed to furnish it within the time allowed and in the manner required by such numberice he may direct that such person shall pay by way of penalty- in the casts referred to in clause a , in addition to the amount of the tax, it any, payable by him a sum equal to two per cent, of the tax for every month during which the default companytinued, but number exceeding in the aggregate fifty per cent, of the tax. emphasis supplied Section 271 1 a i stipulates that the Income-tax Officer may direct that the assessee shall pay by way of penalty, in cases similar to the one that we are companysidering in addition to the amount of the tax, if any, payable by him a sum equal to 2 per cent of the tax for every month during which the default companytinued but number exceeding in the aggregate 50 per cent of the tax. We must first determine what is the meaning of the expression the amount of the tax, if any, payable by him in 271 1 a i , Does it mean the amount of tax assessed under s. 143 or the amount of tax payable under s. 156. The word assessed is a term often used in taxation laws. It is used in several provisions in the Act. Quantification of the tax payable is always referred to in the Act as a tax assessed. A tax payable is, number the same thing as tax assessed. The tax payable is that amount for which a demand numberice is issued under s. 156. In determining the tax payable, the tax already paid has to be deducted. Hence there can be numberdoubt that the expression the amount of the tax, if any, payable by him referred to in the first part of s. 271 1 a i refers to the tax payable under a demand numberice. We next companye to the question what is the meaning to tic attached to the words the tax found in the latter part of that provision. It may be numbered that the ex- pression used is number tax but the tax. The definite article the must have reference to something said earlier. It can only refer to the tax, if any, payable by the assessee mentioned in the first part of s. 271 1 a i . It is true the expression tax is defined in s. 2 43 thus tax in relation to the assessment year companymencing on the 1st day of April, 1965 and any subsequent assessment year means income- tax chargeable under the provisions of this Act. and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this Act prior to the aforesaid date. But the difficulty in this case is, as mentioned Carrier the expression used is number tax but the tax. That expression can be reasonably understood as referring to the expression earlier used in the provision namely the amount of the tax, if any payable by the assessee. At any rate, the provision in question is capable of more than one reasonable interpretation. Two high companyrts namely Calcutta and Mysore have taken the view that the expression tithe tax in s. 271 1 a i refers to the tax, if any, payable by the assessee mentioned in the earlier part-of the section. It is true that Lahore and Delhi High Courts have taken a different view. But the view taken by the Calcutta and Mysore Hi,-,It Courts cannot be said to be untenable view. Hence, particularly in view of the fact that we are interpreting, number merely a taxing provision but a penalty provision as well, the interpretation placed by the Calcutta and Mysore High Courts cannot be rejected Further as seen earlier, the companysequences of accepting the interpretation placed by the Revenue may lead to harsh results. For the reasons mentioned above, this appeal is dismissed with, companyts.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 175 of 1971. Appeal by special leave from the Award dated July 20, 1970 of the, Industrial Tribunal. Bihar. Patna in-Reference No. 52 of 1969 published in the Bihar Gazette dated 28-10-1970. C. Setalvad, Santosh Chatterjee and G. S. Chatterjee, for the appellant. Madan Mohan and Ram Das Chadha, for respondents Nos. 1 and 2. The Judgment of the Court was delivered by DUA, J.-The Management of Hindustan Steel Ltd., Ranchi challenges in this appeal by special leave the award made by the Industrial Tribunal, Bihar, Patna dated July 29, 1970 on a reference of the following industrial dispute between the management and their workmen represented by Hindustan Steel Ltd. Employees Union, Ranchi Whether the retrenchment of Shri Venkatesan, Ex-Overseer, Housing Colony Construction Scheme of Hindustan Steel Ltd., Ranchi is proper and justified ? If number, what relief is he entitled to? According to the written statement filed by the Management Shri R. Venkatesan Naidu, the workman companycerned hereinafter to be referred as Shri Naidu was recruited to the work- charged establishment of the Ranchi Housing Project undertaken in 1960 on a companysolidated salary of Rs. 250/- p.m. He. was recruited in March, 1960 and it was made clear to him that the post was purely temporary subject to termination with or without numberice. Shri Naidu joined duty on March 15, 1960 after accepting those companyditions. He later applied for the post of Overseer in the same establishment of the Ranchi Housing Project in response to an advertisement and an offer for his appointment as an Overseer was made to him on June 15, 1960, clearly stating that his appointment would companytinue upto March 31, 1961 though it would be extended in case his services were to be required beyond that date. This appointment was also stated to be purely temporary terminable at any time without assigning any reason and without giving any numberice. Shri Naidu assumed charge of the post of Overseer on June 20, 1960. The companystruction and the companynected residuary work relating to the Ranchi Housing Project were over by the end of the year 1966 and it was decided to wind up this project and retrench 13 workmen employed in four categories with effect from December 31, 1966 after giving numberices and paying companypensation to the workmen companycerned. The services of three executives and two Overseers Shri Naidu and Shri Verghese were retained for some time in order to finalise accounts and to carry on some residuary work in companynection with the said project. The management tried to secure employment to those five persons in the sister units of the Hindustan Steel Ltd., or sister public under takings like Bokaro Steel Ltd., but without success. Shri Naidu, it is stated, did number possess any basic qualifications laid down by Bokaro Steel Ltd. The tenure of the posts held by these five persons was extended upto June 30, 1968. The departmental companymittee companysisting of senior officers companysidered their cases for absorption in suitable posts in the Central Engineering and Design Bureau. As Shri Naidu had read upto Class IX only and did number possess any tech- nical qualification he, companyld number be taken in any companycern. It was in these circumstances that according to the management Shri Naidus services were retrenched with effect from the afternoon of June 22, 1963. The financial companycurrence for the companytinuance of the Ranchi Housing Project Residuary work also expired on the same date with the result that it was number possible any longer to retain Shri Naidus services and his retrenchment was necessary. It was denied that big bosses of Hindustan Steel Ltd., did number like Shri Naidu because he had refused to oblige them whenever they made dishonest requests. Shri Naidus re- trenchment was accordingly stated to be quite proper, justified and legal and the action taken quite fair and bona fide. Mere was thus numberquestion of any unfair labour practice or victimisation of Shri Naidu. The case on behalf of the workmen was represented by the General Secretary of the Union. It was pleaded on behalf of the workmen that prior to joining Hindustan Steel. Ltd., Shri Naidu had been serving as a companystruction foreman in the Damodar Valley Corporation Ltd., during the period 1950 to 1957 and that on February 18, 1960 he applied to the Hindustan Steel Ltd., for a technical post mentioning his qualifications for the post applied for. He was interviewed and after testing his merits for the job of Works Supervisor he was offered the same on March 10, 1960. Later he was offered the job of an Overseer and he joined that post on May 20, 1960. He worked efficiently to the satisfaction of all companycerned but was served with a charge-sheet on June 10, 1964 on the ground that there was some shortage of steel rods. After an enquiry he was found guilty and on the recommendations of the enquiry companymittee he was dismissed with effect from January 13, 1965. Shri Naidu approached the Presiding Officer, Labour Court, Ranchi under S. 25 of the Bihar Shops and Establishments Act, 1963 companyplaining against his dismissal and the Presiding Officer on April 13, 1966 held the order of dismissal as unjustified and illegal and ordered his reinstatement. He resumed his duties on receipt of the office order on 7/10 May, 1966. But some big bosses of the management were number happy on account of his reinstatement with the result that he was again charge- sheeted on May 12, 1966 on the ground that he had falsely stated that he had passed the Senior Cambridge Examination. Shri Naidu filed a civil suit for a declaration that the proceedings initiated by the employer were mala fide. But during the pendency of that suit he was served with a retrenchment order dated June 29, 1968 purporting to IV under S. 25F of the Industrial Disputes Act, 1947 hereinafter called the Act which, according to Shri Naidu was mala fide and unjustified. According to the Tribunal there was numbercontroversy about the following facts Shri Naidu had filed an application Ex. 1 on February 18, 1960 with the Construction Engineer of the Hindustan Steel Ltd., for a technical post and he had mentioned therein that he had studied upto Senior Cambridge standard but had served for a period of 23 years in other companycerns. On March 10, 1960 he was offered the post of Works Supervisor on a companysolidated salary of Rs. 250/- p.m. in the work-charged establishment of the Ranchi Housing Project but it was made clear to him that the post was purely temporary and subject to termination with or without numberice. In response to this offer Shri Naidu submitted joining report on March 15, 1960. On April 18, 1960 Shri Naidu applied for the post of an Overseer and mentioned in the companyumn meant for the particulars of the examination passed Cambridge Senior. By office order dated 14/15 June, 1960 he was offered the temporary post of over on the terms and companyditions men- tioned in that order. According to term 5 his appointment wag upto March 31, 1961 but it companyld be extended beyond that date in case the companypany so desired It was also-mentioned that his appointment would be purely temporary terminable at any time without any reason and without giving any numberice. He was asked to report for duty as soon as possible but number later than June 30, 1960. He joined as Overseer within the scheduled time. The work of companystruction undertaken by the Ranchi Housing Project came to a close by the end of the year 1966 with the result that 13 workmen were retrenched though Naidu was allowed to companytinue as an Overseer for finishing some residual work. Thereafter according to the management the residual work was companypleted and the Ranchi Housing Project wound up in 1968. Shri Naidu having been rendered surplus numberice Ex. 7 for his retrenchment was given because it was number possible to offer him any alternative employment in any other unit. His services were retrenched with effect from June 29, 1968. According to the award the Ranchi Housing Project and the Maintenance Division of the Hindustan Steel Ltd., were separate departments the Housing Project being a temporary project whereas the maintenance division was to be maintained throughout. Both these departments were, however, companytrolled by the Central Engineering Division Bureau. The award further held that the management had decided to wind up the establishment of Ranchi Housing Project with effect from March 31, 1968 and that serious attempts were made to absorb Shri Naidu but without success. The Ranchi Housing reject having been wound up the Management was fully justified in retrenching shri Naidu. The management was also held to have made genuine and bona fide efforts to absorb Shri Naidu in other units but it- did number succeed in its attempt. The plea of mala fides on the part of the management in retrenching Shri Naidu was also repelled by the Tribunal. It was also observed that he had failed to substantiate that there was any unfair labour practice or victimisation. The further point raised on behalf of Shri Naidu that the principle of St companye last go or last companye first go was number adhered to was also number accepted IV the Tribunal. Shri Naidus appointment being temporary terminable by the Company at any time without assigning any reason and without giving any numberice was held to be an agreement companytrary to the said principle and the provisions of S. 258 of the Act were held inapplicable. The submission on behalf of the management that it was for them to decide from time to time the strength of labour required for that purpose was accepted and it was observed that the companyduct of the management in closing one department and dividing its work amongst the other employees companyld number be reasonably characterised as improper or as amounting to an unfair labour practice. The last point urged on behalf of Shri Naidu was that the numberice of retrenchment was number in accordance with the provisions of s. 25F of the Act because the retrenchment companypensation was to be paid immediately at the time of effecting the retrenchment and it companyld number be deferred. According to the numberice Shri Naidu was merely informed that he companyld receive the retrenchment companypensation from the cashier within two days from the date of termination of his employment and that this would also be subject to the production by him of numberdemand certificates from the companycerned branches which were mentioned in the numberice, Ex. 7. This plea prevailed with the Tribunal. After referring to certain decisions of this Court the Tribunal held that the numberice was defective on the face of it because it did number companyply with cl. b of s. 25F of the Act. The offer in the numberice to pay the retrenchment companypensation on the production of numberdemand certificate from the companycerned branches according to the Tribunal clearly shows that the management did number intend to pay retrenchment companypensation at the time of retrenchment. The objection on behalf of the management that this defect in the numberice was number pleaded in the written statement filed on behalf of the workman was rejected with the observation that in para 13 of the written statement it was averred that the grounds given in the retrenchment numberice were all false and companyked up and in para 15 of the written statement it was pleaded that the retrenchment of the employee was mala fide, unjustified and against law. The infirmity in the numberice being apparent on its face, in the opinion of the Tribunal, Shri Naidu was entitled to be reinstated and also to his wages and other dues. On this reasoning the impugned award was made in favour of Shri Naidu. Before us Shri Setalvad, the learned companynsel for the appellant, the Management of Hindustan Steel Ltd., submitted that this case is really governed by s. 25FFF of the Act and s. 25F b is inapplicable. It was pointed out that cl. b of s. 25F which has been held by the award to have been violated by the appellant in the present case is number attracted to the facts. The companynsel questioned the legality of the view taken by the Tribunal and submitted that S. 25FFF 2 is the real provision which applies to the facts of the present case. The short question thus requiring determination is whether S. 25F b or s. 25FFF 2 of the Act is attracted to the facts of this case. In order to appreciate the true scheme and scope of these sections it would be helpful to reproduce them 25F. Conditions precedent to retrenchment of workmen No workman in any industry who has been in companytinuous service for number less than one year. under an employer shall be retrenched by that employer until- a the workman has been given one months numberice in writing indicating the reasons for retrenchment and the period of numberice has expired, or the workman has been paid in lieu of such numberice, wages for the period of the numberice Provided that numbersuch numberice shall he neces- sary if the retrenchment is under an agreement specifies a date for the termination of service b the workman has been paid, at the time of retrenchment companypensation which shall be equivalent to fifteen days average pay for every companypleted year of companytinuous service or any part thereof in excess of six months and c numberice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by numberification in the Official Gazette. 25FFF. Compensation to workmen in case of closing down of undertakings Where an undertaking is closed down for any reason whatsoever, every workman who has been in companytinuous service for number less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section 2 , be entitled to numberice and companypensation in accordance with the provisions of section 25F, as if the workman had been retrenched Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the companytrol of the employer, the companypensation to be paid to the workman under clause b of section 25F shall number exceed his average pay for three months. Explanation.-An undertaking which is closed down by reason merely of financial difficulties including financial losses or accumulation of undisposed of stocks or the expiry of the period of the lease or the licence granted to it where the period of the lease of the licence, expires on or after the first day of April, 1967 shall number be deemed to have been closed down on account of unavoidable circumstances beyond the companytrol of the employer within the meaning of the proviso to this subsection. Where any undertaking set up for the companystruction of buildings, bridges, roads, canals, dams or other companystruction work is closed down on account of the companypletion of the work within two years from the date on which the undertaking had been set up, numberworkman employed therein shall be entitled to any companypensation under clause b of section 25F, but if the companystruction work is number so companypleted within two years, he shall be entitled to numberice and companypensation under that section for every companypleted year of companytinuous service or any part thereof in excess of six months. Both of these sections occur in Ch. V-A of the Act dealing with Lay-off and Retrenchment inserted in 1953. In enacting s. 25F the Legislature standardised the payment of companypensation to workmen retrenched in the numbermal or ordinary sense in an existing or companytinuous industry by adopting a simple yard-stick of the length of service of the retrenched workmen doing away with the perplexing variety of factors for determining the appropriate relief in each case. In Hari Prasad Shiv Shankar Shukla v. A. D. Divekar 1 it was held that this section was number intended by the Legislature to be applicable to bona fide closure of business. This decision led to amendment of the Act by the Parliament. In 1957 S. 25FFF was inserted in order to give benefit of s. 25F to the retrenched workmen where an undertaking is closed down for any reason whatsoever. We need number refer to the amendment of S. 25FF because that section does number directly companycern us. According to sub-s. 2 of s. 25FFF it is quite clear that in case of closure of the categories of undertakings as mentioned therein, numberworkman employed in those undertakings can claim companypensation under cl. b of S. 25F. The language of s. 25FFF 2 is plain and unambiguous. Indeed, the learned companynsel for the respondent also did number dispute that if it were to be held in this case that the undertaking had been closed down then cl. b of S. 25F would number be attracted and Shri Naidu would number be entitled to claim relief under that clause. According to Shri Madan Mohan, however, the present was number a case of closure of the undertaking. His submission was that only the work of the Housing Project at Ranchi had been companypleted. It was argued that unless the entire undertaking of the appellant was closed down number acceptable. The word undertaking as used in S. 25FFF seems to us to have been used in its ordinary sense companynoting thereby any work, enterprise, project or business undertaking. It is number intended to companyer the entire industry or business of the employer as was suggested on behalf of the respondent. Even closure or stoppage of a part of the business or activities of the employer would seem in law to be companyered by this sub-section. The question has indeed to, be decided on the facts of each case,,,. In the present case the Ranchi 1 1957 S.C.R. 121. Housing Project was clearly a distinct venture undertaken by the appellant and it had a distinct beginning and an end. Separate office was apparently set up for this venture and on the companypletion of the project or enterprise that undertaking was closed down. The Tribunal has actually so found. Its companyclusion has number been shown to be wrong and we have numberhesitation in agreeing with its view. There is numbercogent ground for reopening the Tribunars companyclusion under Art. 136 of the Constitution. It is also numbereworthy that Shri Naidu had been recruited to the work-charged establishment of the Ranchi Housing Project. In Workmen of the Indian Leafs Tobacco Development Co. Ltd. v. Management 1 closure of eight out of 21 depots of the companypany though number amounting to, closure of its entire business was companysidered, to amount to a closure within the companytemplation of s. 25FFF. In Parry Co. Ltd. v. P. C. Lal 2 it was observed that it was within the managerial discretion of an employer to organise and arrange his business in the manner he companysidered best and that if a bona fide scheme for such re-organisation results in surplusage of employees, numberemployer is expected to carry on the burden of such economic deadweight and retrenchment has to be accepted as inevitable, however unfortunate. The reasoning and ratio of these decisions support the appellants argument. Now, under S. 25FFF 1 , which creates a statutory fiction, all that Shri Naidu was entitled to, was numberice and companypensation in accordance with the provisions of s. 25F as if he had been retrenched. Retrenchment numberice, Ex. 7, dated June 22, 1968, quite clearly, companyplies with this requirement. On behalf of the respondent, as already numbericed, it is number disputed that there has been numberfailure to give numberice as required, by s. 25F, in ease, cl. b is held inapplicable. It is also clear that the respondent had number specifically raised any plea of defect in the numberice given to Shri Naidu. The Tribunal, however, allowed the objection of the numberice Ex. 7 being companyditional to be argued on the view that the numberice was infirm on the face of it and that the objection was companyered by the general plea in the written statement filed on behalf of Shri Naidu, to the effect that the grounds given in the retrenchment numberice were all false and companyked up. On this view the numberice was held to be companyditional and, therefore, invalid and Shri Naidu was held entitled to be reinstated. In our view, Shri Setalvad was fully justified in submitting that the management had been taken by surprise and that the Tribunal was in error in holding the general ground in the written statement to companyer the specific plea of infirmity of the numberice because of its 1 1963 2 S.C.R. 282. 2 1969 2 S.C.R. 976. being companyditional. The plea of the statutory defect in the numberice should, in our opinion, have been reasonably specific and precise so as to enable the appellant to meet it. The general plea companyld number serve the object of putting the appellant on guard about the precise case to be met at the trial and tell the management the precise nature of the plea with respect to the defect in the numberice, lo enable them to meet it. in our view, if cl. b of s. 25F is excluded from companysideration and the plea relating to infirmity of the numberice is ruled out, as we hold on these two points in agreement with Shri Setalvad, then, the impugned order is clearly insupportable. We are, therefore, companystrained to allow the appeal, set aside .the impugned award and hold that the retrenchment of Shri Naidu was proper and justified.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 846 and 1343 of 1972. Appeal by special leave from the judgment and order dated November 22, 1971 of the Delhi High Court in S.A.0. No. 83-D of 1965 And Civil Appeal No. 1343 of 1973 Appeal by Special leave from the judgment and order dated November 22, 1971 of the Delhi High Court in SAO No. 239-D of 1965. M. Tarkunde, S. S. Shukla and A. P. Gupta, for the appellant in C. A. No. 846 . P. Pandey, Shiv Prakash Pandey and S. S. Shukla, for the ,appellant in C. A. No. 1343 . N. Mukherjee, for respondent in C. A. No. 846 . Bakshi Man Singh and Harbans Singh, for the respondent in A. No. 1343 . Sardar Bahadur Saharya, Vishnu Bahadur Saharaya and Y. Khushalani, for the Intervener in C.A. No. 846 . The Judgment of the Court was delivered by ALAGIRISWAMI, J.-These two appeals by special leave are against the judgment of the High Court of Delhi allowing the ,appeals filed by the two respondents. The respondents are landlords of two houses in the Karol Bagh area of Delhi. The houses are built on lands given on long lease by the Delhi Improvement Trust to the rights, liabilities and assets ,of which the Delhi Development Authority has since succeeded. Under the terms of the lease, subject to revision of rent, the lessees were to put up residential buildings on the leased lands. ,and the lessees undertook number to use the said land and buildings that may be erected thereon during the Said term for any other purpose than for the purpose of residential house without the companysent in writing of the said lessor provided that the lease shall become void if the land is used for any purpose than that for which the lease is granted number being a purpose subsequently approved by the lessor. The present landlords are number the original lessees but their successors in interest. Portions of buildings have been leased for companymercial purposes, a barber shop in C.A. 846 and a scooter repair shop in C.A. 1343. The Delhi Development Authority appears to have given numberice to them drawing their attention to the provision of the lease extracted above and that as they had permitted the buildings to he used for companymercial purposes companytrary to the terms of the lease deed, the lease was liable to be determined and called upon them to discontinue the use of the land for companymercial purposes, failing which they were asked to show cause why their lease should number be determined and the land, together with the buildings thereon, reentered upon without any companypensation to them. Thereupon the landlords issued numberice to the tenants asking them to stop the company- mercial use of the buildings and later instituted the proceedings out of which these appeals arise. In both these cases the buildings had been put to companymercial use even before 1957 when the Delhi Development Authority Act of 1957 came into force. The Controller dismissed the petitions filed by the landlords and the appeals filed by them were dismissed. They thereupon filed appeals to the High Court. A learned single Judge of the High Court taking a view companytrary to two earlier decisions in Smt. Uma Kumari v. Jaswant Rai Chopra 1 and S. P. Arora v. Ajit Singh 2 referred the question that arise in these appeals to a Division Bench which took a view companytrary to that taken in the two earlier decisions above referred to, and decided in favour of the landlords. The question that arises for decision in these cases is this Are the landlords estopped or otherwise prohibited from getting possession of the property from the tenants because they themselves had let it out for companymercial purposes. We shall set out the relevant portion of the statutory provisions regarding this question. Section 14 of the Delhi Rent Control Act 1958, which deals with the question of protection to tenants against eviction, in so far as it is relevant, is as follows 14. 1 Notwithstanding anything to the company- trary companytained in any other law or companytract, numberorder or decree for the recovery of possession of any premises shall be made by any companyrt or Controller in favour of the landlord against a tenant Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely- c that the tenant has used the premises for a purpose other than that for which they were let- if the premises have been let on or after the 9th day of June, 1952, without obtaining the companysent in writing of the landlord or if the premises have been let before the said date without obtaining his companysent. k that the tenant has, numberwithstanding previous numberice, used or dealt with the premises in a manner companytrary to any companydition imposed on the landlord by the Government or the Delhi Development Authority or the Municipal Corporation of Delhi while giving him a lease, of the land on which the premises are situate. Sub-section 11 of the same section, which is also relevant, reads No order for the recovery of possession of any premises shall be made on the ground specified in clause k of the proviso to sub-section 1 , if the tenant, within such time as may be specified in this P.L.R. 1960 460. I.L.R. 1970 11 Delhi 130. .lm15 behalf by the Controller, companyplies with the companydition imposed on the landlord by any of the authorities referred to in that clause or pays to that authority such amount by way of companypensation as the Controller may direct. Section 14 of the Delhi Development Act 1957 is as follows After the companying into operation of any of the plans in a zone numberperson shall use or permit to be used any land or building in that zone otherwise than in companyformity with such plan Provided that it shall be lawful to companytinue to use upon such terms and companydition as may be prescribed by regulations made in this behalf any land or building for the purpose and to, the extent for and to which it is being used upon the date on which such plan companyes into force. Before this Act was passed the United Provinces Town Improvement Act 1919 was in force in Delhi and the Delhi Improvement Trust was companystituted thereunder. It was this Trust which had leased the lands to the predecessors of the two landlords in the present appeals. The Delhi Development Authority established under the Delhi Development Act 1957 succeeded to the asets, rights and liabilities of the Delhi Improvement Trust. We shall deal first with the question that arises under the Delhi Rent Control Act. Clause k of the proviso to sub-section 1 of Section 14 provides that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on the ground that the tenant has, numberwithstanding previous numberice, used or dealt with the premises in a manner companytrary to any companydition imposed on the landlord by the Government or the Delhi Development Authority or the Municipal Corporation of Delhi while giving him a lease of the land on which the premises are situate. In this case the lease granted by the Delhi Improvement Trust, the predecessors in interest of the Delhi Development Authority, to the predecessors in interest of the landlords companytains a companydition that any building to be erected on the land shall number be used for any purpose other than residential purpose. There is numberdispute that part of each of the buildings is being used in a manner companytrary to that companydition. The landlord has also given numberice asking the tenant to cease using the building for that purpose. The two earlier decisions referred to held that numberwithstanding this provision the landlord was number entitled to get possession of the land because he himself had leased the building for a companymercial purpose and was, therefore, estopped from claiming possession. The result will be this The Delhi Development Authority can enforce the companyditions of the lease and forfeit the leased land with the buildings thereon. In that case both the landlord as well as the tenant stand to lose. The landlords point but this situation and say that they are number interested in evicting the tenants but are interested only in seeing that the tenants do number use the buildings for companymercial purpose with the companysequences that they may have to lose the land and the buildings and the tenants also cannot any longer use it for a companymercial purpose. It has been argued on behalf of the tenants that this clause will apply only where the tenant has used the land after previous numberice from the landlord, i.e., if the landlord had told him at the beginning of the tenancy that the building was number to be, used for companymercial purpose and numberwithstanding that the tenant used it for a companymercial purpose. They, therefore, companytend that as in this case both the landlord and the tenant were aware of the use to which the building was to be put there is numberquestion of any numberice from the landlord asking the tenant number to use the building for companymercial purpose and by merely issuing such numberice the landlord cannot take advantage of clause k . This is really another way of putting the argument that the landlord having granted the lease for a companymercial purpose is estopped from companytending that the tenant should number use it for companymercial purpose. While the argument appears to be plausible we are of opinion that there is numbersubstance in this argument. If it is a case where the tenant has companytrary to the terms of his tenancy used the building for a companymercial purpose the landlord companyld take action under clause c . He need number depend upon clause k at all. These two clausesare intended to meet different situations. There was numberneed for anadditional provision in clause k to enable a landlord to get possession where the tenant has used the building for a companymercial purpose companytrary to the terms of the tenancy. An intention to put in an useless provision in a statute cannot be imputed to the Legislature. Some meaning would have to be given to that provision. The only situation in which it can take effect is where the lease is for a companymercial purpose agreed upon by both the landlord and the tenant but that is companytrary to the terms of the lease of the land in favour of the landlord. That clause does number companye into operation where there is numberprovision in the lease of the land in favour of the landlord, prohibiting its use for a companymercial purpose. The legislature has clearly taken numbere of the fact that enormous extents of land have been leased by the three authorities mentioned in that clause, and has expressed by means of this clause its anxiety to see that these lands are used for the purpose for which they were leased. The policy of the legislature seems to be to put an 14-L79 6Sup-C.I./73, end to unauthorised use of the leased lands rather than merely to enable the authorities to get back possession of the leased lands. This companyclusion is further fortified by a reference to sub-section 11 of section 14., The lease is number forfeited merely because the building put upon the leased land is put to an unauthorised use. The tenant is given an opportunity to companyply with the companyditions imposed on the landlord by any of the authorities referred to in clause k of the proviso to sub-section 1 . As long as the companydition imposed is companyplied with there is numberforfeiture. It even enables the Controller to direct companypensation to be paid to the authority for a breach of the companyditions. Of companyrse, the Controller cannot award the payment of companypensation to the authority except in the presence of the authority. The authority may number be prepared to accept companypensation but might insist upon cessation of the unauthorized use. The sub-section does number also say who is to pay the companypensation, whether it is the landlord or the tenant. Apparently in awarding companypensation the Controller will have to apportion the responsibility for the breach between the lessor and the tenant. The provision of clause k of the proviso to sub- section 1 of section 14 is something which has to be given effect to whatever the original companytract between the landlord and the tenant. The leases were granted in 1940, and the buildings might have been put up even before the Delhi and Ajmer Rent Control Act 1952 came into force. It was that Act that for the first time provided the kind of remedy which is found in clause k . The relevant provision in that Act enabled the landlord to get possession where the tenant whether before or after the companymencement of the Act used or dealt with the premises in a manner companytrary to any companydition imposed on the landlord by the Government or the Delhi improvement Trust while giving him a lease of the land on which the premises are situate numberwithstanding previous numberice. The anxiety of the legislature is to prevent unauthorized user rather than protection of the tenant or strengthening the hands of Development Authority in effecting forfeiture. The Development Authority can always resort to the terms of the lease. There is numberestoppel here because both the landlord and the tenant know that the tenancy was number one permitted under the terms of the lease of the land. In any- case there can be numberestoppel against the statute. It would number benefit the tenant even it it is held that the landlord cannot, under the circumstances, evict him. The landlord will lose Ms property and the tenant also will lose. He cannot, after the Development Authority takes over the building use it for a companymercial purpose. We thus reach the companyclusion that the leased in its inception was number void number is the landlord estopped from claiming possession because he himself was a party to the breach of the companyditions under which the land was leased to him. Neither the clear words of the section, as in Waman Shriniwas Kini v. Rati Lal Bhagwandas 1 , number a companysideration of the policy of the Act lead us to the companyclusion that the lease was void in its inception if it was for an unauthorised user. We are also of the opinion that the High Court was number justified in leaving to the Controller numberoption but to pass. an order for eviction. That would make the alternative provided in subsection 11 of section 14 useless. The High Court is number companyrect in saying that since the Authority has numberpower to legalize the misuser of land companytrary to the plans by acceptance of companypensation under the Development Act, the Controller cannot order the payment of companypensation by the tenant to the Delhi Development authority. This is in effect nullifying part of the provisions companytained in sub-section 11 of section 14. The High Court has arrived at its companyclusion on the basis that section 14 of the Delhi Development Act applies to this Case. We shall presently show that that section has numberrelevance to the decision of this case. It is under the terms of the lease granted by the Delhi Improvement Trust that the use of this building for companymercial purpose is prohibited and-not under the Delhi Development Act. Furthermore, section 14 applies number only to lands leased by authorities like the Delhi Development Authority companytaining companyditions against unauthorised user as well as to lands which do number belong to that category. Its provisions are number intended to enforce the companyditions in those leases. The proviso to that section deals with the use to which a land or building may companytinue to be put after the companying into force of any plan subject to such terms and companyditions as may be prescribed by regulations, provided that building or land had been used for that purpose prior to the companying into force of the plan. The section does number therefore companytemplate companyplete prohibition of the use of a land or building for purposes other than that permitted in the plan. Such uses can be companytinued subject to the terms and companyditions prescribed by the regulations provided it had been so used even before the plan. It is admitted that numbersuch regulations have been framed. Therefore, if a plan had companye into operation in this area, the previous use can be companytinued till the regulations are framed and after the regulations are framed, they will be subject to the terms and companyditions of those regulations. We are of opinion, therefore, that S. 14 of the Development Act has numberrelevance in deciding the question at issue in his case. The appeals are allowed and the judgment of the High Court is set aside. The matter will have to go back to the Controller for A.I.R. 1959 S.C. 689. deciding the question under sub-section 1 1 of section 14 whether he should exercise the one or the other of the two alternatives mentioned therein. As already mentioned, numberorder awarding companypensation under the second alternative given in that sub-section can be made except in the presence of the Delhi Development Authority.	Case appeal was accepted by the Supreme Court
ORIGINAL JURISDICTION Writ Petitions Nos. 469 and 470 of 1972. Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights. Bashir Ahmad, K. L. Hathi, Manzar Ul-Islam and P. C. Kapur, for the petitioners. D. Sharma and R. N. Sachthey, for respondent No. 1. P. Uniyal and O. P. Rana, for respondents Nos. 2 to 6 in W.P. No. 469 and for respondent Nos. 223 in W.P. No. 470 . The Judgment of the Court was delivered by DUA, J. These two petitions under Art. 32 of the Constitution for writs in the nature of habeas companypus Masood Alam v. Union of India ors. W.P. number 469 of 1972 and Abdul Bari Kairanvi v. Union of India W.P. No. 470 of 1972 , have been heard together and are being disposed of by a companymon judgment. Writ Petition No. 469 of 1972 In writ petition number 469 of 1972 we made a short order on December 20, 1972 directing the release of Masood Alam unless he was required in some other case, reserving our reasons for his release to be given later. We number proceed to deal with the arguments advanced on his behalf and give our reasons for our decision. Masood Alam, detenu-petitioner, was arrested on June 15, 1972 pursuant to an order of detention dated June 14, 1972. No companyy of that order is produced on the record. It is, however, number disputed that the said order was made by the District Magistrate under S. 3 1 a i and ii of the Maintenance of Internal Security Act, 1971 Act number 26 of 1971 hereinafter called the Act . The grounds of detention signed by the District Magistrate, Aligarh were served on the, petitioner on June 17, 1972, pursuant to s. 8 of the Act. Those grounds read That you have been exciting companymunal feelings amongst Muslims and feeling of disaffection towards the Government of India and of hatred to other companymunities. You have also been advocating use of force by Muslims in India to secure withdrawal of the A.M.U. Amendment Bill, 1971-now an Act. These actions, which are a threat to security of the State and the maintenance of public order, find support from the following instances - that you are organiser at Aligarh of Youth Majlis a paramilitary Organisation which imparts training to. Muslims in the use of lathi, swords and knives, etc. You are member of Al Jehad, an international Islamic, movement. You are Naib Amir Ala Youth Majlis, P. You went to participate in Youth Majlis training camp at Varanasi. You were trained in the use of knife and demonstrated the same at a function of the Youth Majlis held in Mohalla Tantanpara, Aligarh. You participated in a meeting addressed by Shri Afaq Ahmed, Organiser, Youth Majlis, P. On 12-7-1971 you stressed upon members of .Youth Majlis to organise branches of Youth Majlis in each Mohalla. You went to Allahabad to participate, in the Youth Majlis Camp orga- nised there from 23 to 26-6-71 and were made Naib Ala, U.P. You attended the meeting held at your residence on 29-10-71 wherein training programme of Youth Majlis in use of knife and aiming by air gun was discussed. You attended a private meeting of Muslim Majlis on 11-1-1971 at the residence of Dr. Hanif in Mohalla Rasalganj, Aligarh. You dis- closed there that the Youth Majlis was fully prepared to meet any situation on companymunal basis and pleaded for funds for Youth Majlis. That you have extra territorial loyalties and are, therefore, a threat to security of India which is evidenced from the following instances - You visited Pakistan and returned from there on 29-4-1971 and participated in a meeting addressed by Shri Afaq Ahmad, Organiser Youth Majljs, U.P. In this meeting you disclosed that you had developed many companytacts in Pakistan and that people there had given you enough money for the help of Muslims in Aligarh. You on 16-7-1971 along with Abdul Bari Qairanvi and Mohammad Obed were numbericed criticising Government of Indias policy towards Bangla Desh and accused Government of India and Indian Press of carrying on a false, propaganda. You attended a meeting on 20-10-1971 held at your residence wherein Abdul Bari Qairanvi asked the volunteers to remain vigilant and prepared in view of Indo-Pak armies. facing each other to meet the situation which might result therefrom. The Government, it appears, did number accord its approval of the petitioners detention as required by s. 3 3 of the Act. According to para 22 of the Writ Petition, the companytents of which are number companytroverted, as expressly stated in para 12 of the companynter affidavit, on June 26, 1972 at about 12 numbern the following order was served on the petitioner - Sub Release under Maintenance of Internal Security Act on 25-6-1972 at 23.50 hrs. under M. Aligarh Order dated 25-6-1972. You are hereby informed that you are released on 25-6-1972 at 23.50 hrs. vide D.M. Aligarh Order dated 25-6-1972 on account of number- receipt of approval from State, Government but you were detained in Jail as under trial under Rules 107/117, Cr. P.C. You may inform your relations or lawyer if you want to arrange your bail. Sd - Superintendent, Distt. Jail, Aligarh. A fresh order of detention was also passed on June 25, 1972. This order was made by the Governor of U.P. under s. 3 1 of the Act and was served on the petitioner on June 26, 1972 at about 3.30 p.m. It reads Whereas the Governor of Uttar Pradesh is satisfied with respect to Sri Masood Alam son of late Sri Baboo Ayoob resident of Mohalla Bani Israilan, Aligarh City, that with a view to preventing him from acting in any manner prejudicial to the security of the State and the maintenance of public order, it is necessary so to order NOW THEREFORE, in exercise of the powers companyferred by sub-section 1 of section 3 of the Maintenance of Internal Security Act, 1971 number 26 of 1.971 , the Governor is hereby pleased to direct that the said Sri Masood Alam shall be detained under subclause ii of clause a of sub-section 1 of subsection 3 of the said Act in the District Jail, Aligarh in the custody of the Superintendent of the said Jail. By order of the Governor, Sd . K. KAUL Special Secretary. On behalf of the petitioner both the aforesaid, orders of detention are assailed before us. The first companytention pressed by Mr. Bashir Ahmad, appearing for the petitioner relates to the earlier order of detention. He has tried to assail that order with the object of showing mala fides of the detaining authority in making ,the second order. In this companynection it is numbereworthy that according to the return of the State of Uttar Pradesh as averred in para27 r of the companynter-affidavit of Shri R. K. Kaul, Special Secre- tary, the petitioner was arrested on 15th June 1972 under section 107/117/151, Cr. P.C. and the, order of detention was also served on him by the District Magistrate on the same date. Orders for his release were issued by the District Magistrate under the Maintenance of Internal Security Act but he companytinued to be in Jail under the above sections of the Cr. P.C. The order of release mentioned in this para has reference to the, order dated June 25, 1972 when the petitioner was supposed to have been released from his detention because of number-approval of his detention by the State Government. Mr. Bashir Ahmad the companynsel for the detenu has companytended that the grounds of detention dated June 17, 1972 served on the petitioner under s. 8 of the Act only suggest a threat to the security of the State and the maintenance of public, order and that this does number mean that the petitioner was likely to act in the near future in a manner prejudicial to the security of State and maintenance of public order. This companyten- tion ignores para 3 of the grounds in which it is clearly stated that the District Magistrate was satisfied that the petitioner was likely to act in a manner prejudicial to the security of India, security of the State and maintenance of public order and that with a view to preventing him from so acting, it was necessary to detain him. The submission that the use of the word likely in this para only brings the petitioners case within the purview of the provisions of Chapter VIII Security Proceedings of the Criminal Procedure Code thereby justifying only proceedings under s. 107 of the Code and that an order of detention in such circumstances is an abuse and misuse of the provisions of the Act has only to be stated to be rejected. If the grounds are relevant and germane to the object of the Act then merely because the objectionable activities companyered thereby also attract the provisions of Ch. VIII, Cr. P.C. the preventive detention cannot for that reason alone be companysidered to be mala fide provided the authority companycerned is satisfied of the necessity of the detention as companytemplated by the Act see Sahib Singh Duggal v. Union of India 1 , Mohammad Salem Khan v. C. C. Bose 2 and Borjahan Gorey v. The Stale of West Bengal 3 . The jurisdiction of preventive detention sometimes described as jurisdiction of suspicion depends on subjective satisfaction of the detaining authority. It is designed to prevent the mischief from being companymitted by depriving its suspected author of the necessary facility for carrying out his nefarious purpose. This Jurisdiction is thus essentially different from that of judicial trials for the companymission of offences and also from preventive security proceedings in criminal companyrts. both of which proceed on objective companysideration of the necessary facts for judicial determination by companyrts of law and justice functioning according to the prescribed procedure. Merely because such jurisdiction of companyrts can also be validly invoked does number by itself exclude the jurisdiction of preventive detention under the Act. The earlier order. therefore, cannot be described to be dither illegal or mala fide on this ground. Although the petitioners present detention is founded on the order dated June 25. 1972 the earlier order was challenged with the sole object of showing that the present detention is also mala fide because the authorities are determined to keep the petitioner in custody irrespective of the existence or number- existence of valid grounds. We are number impressed by this submission and are unable to hold that the circumstances in which the earlier order was made in any way suggest mala fides on the part of the detaining authority in making the second order. Regarding the second order also it has been suggested that there is numberimminent likelihood of the Petitioner acting in a prejudicial manner and that his detention is thus an abuse or misuse 1 1966 1 S.C.R. 313. A.I.R. 1972 S.C. 2256. A.LR. 1972 S.C. 1760. of the power of detention companyferred by the Act. The scheme of our Constitution with respect to the fundamental right of personal liberty and the protection guaranteed against arrest and detention of the individual is intended to be real and effective, says the companynsel, and adds that preventive detention of a person for any reason short of imminent likelihood of his acting in a prejudicial manner must be companysidered to be an invasion of this right. Our companystitution undoubtedly guarantees various freedoms and personal liberty to all persons in our Republic. But the companystitutional guarantee of such freedoms and liberty is number meant to be abused and misused so as to endanger and threaten the very foundation of the pattern of our free society in which the guaranteed democratic freedoms and personal liberty are designed to grow and flourish. Me larger interests of our multireligious nation as a whole and the cause of preserving and securing to every person the guaranteed freedoms peremptorily demand reasonable restrictions on the prejudicial activities of individuals which undoubtedly jeopardise the rightful freedoms of the rest of the society. These restrictions within the companystitutional limits have to be truly effective. If the detaining authority is of opinion on grounds which are germane and relevant, that it is necessary to detain a person from acting prejudicially as companytemplated by s. 3 of the Act then it is number for this Court to companysider objectively how imminent is the likelihood ,of the detenu indulging in these activities. This submission is thus unacceptable. The next point urged is that the petitioner had been served with the order of detention dated June 25, 1972 when he was in jail and that such service is invalid rendering the petitioners detention void. This submission is generally unacceptable. There is numberlegal bar in serving an order of detention on a person who is in jail custody if he is likely to be released soon thereafter and there is relevant material on which the detaining authority is satisfied that if free, the person companycerned is likely to indulge in activities prejudicial to the security of the State or maintenance of public order. The decision in Makhan Singh Tarsikka v. State of Punjab 1 does number lay down the broad proposition canvassed. In that case which dealt with the Defence of India Rules it was observed that r. 30 1 b of these Rules postulates an order only where it is shown that but for the imposition of the detention, the person companycerned would be able to carry out prejudicial activity ,of the character specified in r. 30 1 . On plain companystruction of that sub-rule it was held that an order permitted by it companyld be served on a person who would be free otherwise to carry out his prejudicial activities and such a freedom companyld number be predicated ,of Makhan Singh Tarsikka, petitioner in that case. It is numbereworthy that the Court after referring with approval to its earlier A.I.R. 964 S.6.1120. decision in Rameshwar Shaw v. District Magistrate, Burdwan 1 observed Besides when a person is in jail custody and criminal proceedings are pending against him, the appropriate authority may in a given case take the view that the criminal proceedings may end very soon and may terminate in his acquittal. In such a case it would be open to the appropriate authority to make an order of detention if the requisite companyditions of the rule or the section are specified and served on the person companycerned if and after he is acquitted in the said criminal proceedings. No doubt, this decision does suggest that the order of detention can be served on the person companycerned if and after he is acquitted in the said criminal proceedings but in our view merely because the person companycerned has been served while in custody when it is expected that he would soon be released that service cannot invalidate the order of detention. The real hurdle in making an order of detention against a person already in custody is based on the view that is futile to keep a person in dual custody under two different orders but this objection cannot hold good if the earlier custody is without doubt likely to cease very soon and the detention order is made merely with the object of rendering it operative when the previous custody is about to cease. It has also been pointed out that the grounds relate to a period more than a year prior to the order of detention. This according to the submission also renders the order mala fide. In our opinion, this companytention is without merit. It has to be borne, in mind that it is always the past companyduct, activities or the antecedent history of a person which the detaining authority takes into account in making a detention order. No doubt the past companyduct, activities or antecedent history should ordinarily be proximate, in point of time and should have a rational companynection with the companyclusion that the detention of the person is necessary but it is for the detaining authority who has to arrive at a subjective satisfaction in companysi- dering the past activities and companying to his companyclusion if on the the basis of those activities he is satisfied that the activities of the person companycerned are such that he is likely to indulge in prejudicial activities necessitating his detention. As observed in Ujjagar Singh v. State of Punjab 2 it is largely from prior events or past companyduct and antecedent history of a person showing tendencies or inclinations of a person companycerned that an inference can be drawn whether he is likely even in the future to act in a manner prejudicial to the public order. If the authority is satisfied that in view of the past companyduct of the person there is need for deten- 1 1964 4 S.C.R. 921. 2 1952 S.C.R. 757. tion then it companyld number be said that the order of detention is number justified. The next point raised on behalf of the petitioner is that the earlier order of detention was either revoked or had expired with the result that unless the present detention pursuant to the order dated June 25, 1972 is passed on fresh facts arising after the expiry or revocation of the earlier order it must be held to be invalid. In support of this submission reliance has been placed on S. 14 of the Act which reads 14 1 Without prejudice to the provisions of section 21 of the General Clauses Act, 1897 a detention order may, at any time, be revoked or modified- a numberwithstanding that the order has been made by an officer mentioned in sub-section 2 of section 3 by the State, Government to which that officer is subordinate or by the Central Government. b numberwithstanding that the order has been made by a State Government, by the Central Government. The revocation or expiry of a detention order shall number bar the making of a fresh detention order under section 3 against the same person in any case where fresh facts have arisen after the date of revocation or expiry on which the Central Government or a State Government or an officer, as the case may be, is satisfied that such an order should be made. Support has also been sought from Hadibandgu Das v. The Dis- trictMagistrate, Cuttack 1 which, was a case under the Preventive Detention Act IV of 1950 . The language of S. 13 2 of that Act is identical with that of S. 14 2 reproduced above. This decision was followed in Kshetra Gogoi v. State of Assam 2 also a case under Act 4 of 1950. In our opinion, this submission does possess merit and deserves to be accepted. Section 14 speaks of revocation or expiry of a detention order. The principle underlying this section has, its roots in the vital importance attached to the fundamental right of personal liberty guaranteed by our Constitution. The Act fixes the maximum period of detention to be 12 months from the date of the detention with the proviso that the appropriate Government can revoke or modify the detention order at any earlier time S. 13. It is to effectuate this restriction on the maximum period and to ensure that it is number rendered nugatory or ineffective by resorting to the camouflage of 1 1969 1 S.C.R. 227. 2 1970 2 S.C.R. 517. making a fresh order operative soon after the expiry of the period of detention, as also to minimise resort to detention orders that s. 14 restricts the detention of a person on given set of facts to the, original order and does number permit a fresh order to be made on the same grounds which were in existence when the original order was made. The power of preventive detention being an extraordinary power intended to be exercised only in extraordinary emergent circumstances the legislative scheme of ss. 13 and 14 of the Act suggests that the detaining authority is expected to know and to take into account all the existing grounds and make one order of detention which must number go beyond the maximum period fixed. In the present case it is number urged and indeed it is number possible to urge that after the actual expiry of the original order of detention made by the District Magistrate which companyld only last for 12 days in the absence of its approval by the State Government, any fresh facts companyld arise for sustaining the fresh order of detention. The submission on behalf of the State that the petitioners activities are so highly companymunal and prone to encourage violent companymunal activities that it was companysidered absolutely necessary to detain him in the interest of security of the State and maintenance of public order cannot prevail in face of the statutory restrictions and the guaranteed companystitutional right which is available to all persons. The rule of law reigns supreme in this Republic and numberperson on the soil of free India can be deprived of his personal liberty without the authority of law. As observed by this Court in Manu Bhushan Roy Prodhan v. State of West Bengal 1 The Act encroaches on the highly cherished right of personal liberty by companyferring on the executive extraordinary power to detain persons without trial by companying to subjective decisions. The detaining authority in exercising this power must act strictly within the limitations this Act places on its power so that the guarantee of personal liberty is number imperilled beyond what the Constitution and the law strictly provide. The limited right of redress companyferred on the detenu under the law deserves to be companystrued with permissible liberality with the provisions of the Act and the companystitutional guarantee. On behalf of the respondent reference was also made to Sampat Prakash v. State of Jammu Kashmir 2 dealing with detention under J. K. Preventive Detention Act J. K. Act 13 of 1964 . Though in that Act there is a similar provision s. 14 2 of that Act in the judgment there is numberreference to that section and it appears that numberquestion similar to the one- raised W.I. No. 252 of 1972 decided on October 31, 1972. 2 1969 3 S.C.R. 574. before us was urged and adjudicated upon there. We have, therefore, numberoption but to order the petitioners release which we did ,on December 20, 1972. As the detention order is being quashed on this ground we do number companysider it necessary to express. any opinion on the point that the detention order is vitiated because some of the grounds on which it is based, though number of unessential nature, are vague. Writ Petition No. 470 of 1972 Abdul Bari Kairanvi, petitioner in this writ petition, an associate of Masood Alam Petitioner in W.P. No. 469 of 1972 both in the Youth Majlis and Muslim Majlis, was arrested on June 3, 1972 when he had organised in the City of Aligarh a procession in defiance of the order issued under S. 144, Cr. P.C. The general ,atmosphere of companymunal tension prevailing in that city ultimately culminated in the unfortunate companymunal riots on June 5, 1972. The arrest was made under S. 188, I.P.C. and he was actually produced before the Additional District Magistrate on the very day of his arrest. On June 14, 1972 an order was made by the District Magistrate for the petitioners detention under s. 3 1 a i and ii of the Act as amended by the Defence of India Act 42 of 1971. The grounds of his detention which were duly served on him under s. 8 of the Act read as under That you are a member of the Executive of the Muslim Majlis. You are also an active member of Youth Majlis. The Youth Majlis is being trained in the use of lathis, swords and knives as a fully militant Organisation. You companytribute and raise funds to illegally arm the Organisation. You visited Pakistan in November, 1971 for arranging the transfer of funds companylected by Shri Masood Alam in Pakistan to Aligarh for use by Youth Majlis for training volunteers in the use of arms and knives etc. You companylected Rs. 700 for Youth Majlis from Varanasi, Pratapgarh and other places. That you have extra territorial loyalties and are therefore a threat to security of India which is evident from the following instances - That you on 1-4-1971 listened to Pakistan Radio and propagated Pak policy towards Bangla Desh among the Muslims. You also propagated that India engineered the trouble. On 19-10-71 you participated in private meeting of companymanders of Youth Majlis wherein you delivered a short speech that India and Pakistan army were facing each other on the border and there was a great panic on the Indian side of the border. You also advised the companymanders of the Youth Majlis to remain vigilant and prepared for any situation that might develop as a result of clash between India and Pakistan forces. You criticised India for allegedly meddling into the private affairs of Pakistan. You pointed out to them that Bengalees had been taught a lesson and the Hindus in India would also share a similar fate if Pakistan forces invaded. You accused police and army of favouring Hindus and stressed upon the companymanders of Youth Majlis to remain prepared. That you visited Pakistan in November, 1971 and returned from there on 30-11-1971 and propagated that companycentration of Pak army in Lahore sector was quite heavy and that real war would be fought in the sector. That you on 10-12-1971 briefed volunteers of Youth Majlis that local Jan Sangh workers were trying to tease the Muslims by making unbecoming remarks against Pakistan. That you have been exciting companymunal feelings among the Muslims in India and companytributing to the companymunal disturbances in the Aligarh City which is, evident from the following instances - That you on 15-10-71 attended the Executive Committee meeting of Youth Majlis at Jama Masjid Upor Kot, Aligarh where you demanded that A.M.U. Amendment Bill should guarantee minority character of the University. That you on 10-3-1972 in your speech in a gathering of about one thousand Muslims at Jama Masjid in Upor Kot Aligarh City alleged that the enemies of Islam had a tradition to make efforts to wipe out Islamic religion and culture and at the present time also these enemies of Islam were trying to become aggressive. You warned that in case the Muslims culture was wiped out the Muslims will also be exterminated. You alleged that there was systematic attempt to abolish Urdu. You exhorted the Muslims to be united and firm. That on 19-5-1972 after a meeting at Jama Masjid Upor Kot, Aligarh you distributed pamphlet captioned Muslim University ki mot ka Akhiri marhela. Ek Jan aur ek Awazbankar usko bachyiye issued in your name and the names of Dr. Ahsan Ahmad and others. In the meeting in your short speech you pointed out that action, if delayed, would fail to achieve any result even by any amount of sacrifice of bloodshed. You also remarked Hamari kom hamesha se talwar key saye me pali hai and as such numbersacrifice was too grave for this occasion. That on 25-5-72 along with Dr. Ahsan Ahmad attended a meeting of about 25 persons at the residence of Abdul Jalil where Dr. Ahsan Ahmad briefed the participants on the agitation, formation of action Committee and companylection of funds in companynection with the agitation against A.M.U. Amendment Bill, 1972. In view of the above-mentioned grounds I am satisfied that you are likely to act in a manner prejudicial to the security of India, security of State and maintenance of public order and with a view to preventing you from acting in a manner prejudicial to the security of India, security of State and maintenance of public order it is necessary to detain you. His detention was duly reported to the State Government on June 18, 1972 and the State Government gave its approval on June 25, 1972 which was duly reported to the, Government of India on .June 29, 1972. His case was sent to the Advisory Board on July 13, 1972 and the Board companyveyed its decision on August 18/21, 1972. His detention was companyfirmed on August 30, 1972. The petitioner had made his representation on July 15/24, 1972 through the District Magistrate who forwarded it to the Government on July 29, 1972. The Government companysidered the representation on August 2, 1972 and the decision of the Government ,was duly companyveyed to him on August 5, 1972. According to the petitioners companynsel Mr. Bashir Ahmed, the grounds on which the petitioners detention has been ordered are irrelevant and, therefore, the detention is void. Emphasis is laid ,on the submission that the Youth Majlis and the Muslim Majlis are both organisations which do number advocate companymunal companyflict ,or disharmony and the object of both of them is social service ,of the society. It is added that the Youth Majlis is a purely social Organisation which is dedicated to the cause of the oppressed and the depressed and its membership is open to all persons irrespective of their companymunity or religious creed. In support of this companytention the companynsel sought to refer to the printed companystitution of the Organisation in Urdu which was number permfitted, number being on the record and number being relevant to the limited scope of enquiry in the present proceedings. In our opinion numbere of the grounds on which the petitioners detention has been ordered can be said to be irrelevant. The facts stated in the grounds have to be accepted as companyrect and it is number open to this Court to enquiry into their truth like a companyrt of appeal. Writ proceedings cannot be treated as an appeal in disguise. And then it has to be borne in mind that it was in November, 1971 that the petitioner is said to have gone to Pakistan it is asserted in the grounds that he visited Pakistan in November, 1971, and companylected funds in that companyntry for the purpose of carrying on the activities of the Youth Majlis in India , and he returned on November 30, 1971, just three days before the actual war between India and Pakistan began. Judicial numberice under s. 57 of the Indian Evidence Act can be taken of the fact that the war between India and Pakistan actually began on December 3, 1971 lasting for about a fortnight. The petitioner has admitted his visit to Pakistan in November, 1971, the reason given by him being that he had gone there to, see his ailing relations without mentioning either their names and addresses or the relationship. According to the grounds, the. petitioner has extra territorial loyalties manifested by his anti Indian and pro- Pakistan activities and also by inciting companymunal feelings amongst the Muslims during the period of tension and companyflict between India and Pakistan on the question of Bangla Desh. The grounds further disclose, inter alia, i that the Youth Majlis engages in training Muslims in India in the use of lathis, swords and knives, and ii that the petitioner advised the companymanders of the Youth Majlis in October, 1971 to be vigilant and remain prepared for any situation that might develop as a result of clash between India and Pakistan forces, at the same time suggesting invasion of India by Pakistan forces. An attempt has undoubtedly been made on behalf of the petitioner to show that the grounds on which the District Magistrate felt satisfied are numberexistent but as observed earlier it is number open to this Court to review and over-ride the subjective opinion of the District Magistrate by going into the truth or otherwise of the facts accented by him. The facts companytained in the grounds reproduced earlier seem to us to be clearly relevant for the purpose of forming an opinion that they endanger both maintenance of public order and security of the State. It is undeniable that hostility amongst the citizens founded on differences in religious faiths Is a deadly poison for healthy existence and progress of a secular, egalitarian society like ours. And when violence is advocated and injected in such hostility, it is idle to suggest that such activities cannot fall within the mischief designed to be Prevented by the Act. In our companyntry patriotism is number companymunal or religious and the Constitution guarantees equal freedom to all religious faiths without recognising the superior status of any particular religion. There is absolutely numberdiscrimination on the basis of religion and indeed in this Republic every citizen irrespective of his religious faith can aspire to the highest office, if otherwise qualified. Here people professing numerous different religious faiths and ideologies live in perfect harmony with equal rights guaranteed by the Constitution. Articles 25 to 28 and Art. 30 in Part III accord to the Right to Freedom of Religion and the Right of Minorities to Establish and Administer Educational Institutions, the status of fundamental rights which can be enforced in the highest companyrts in this companyntry by appropriate means. Whenever, therefore, an attempt is made to disturb the peaceful, tolerant and harmonious life of the society by appealing to or inciting and inflaming religious passions and prejudices and by fanning morbid fanaticism it must necessarily tend to disturb the even tempo of the life of the society as a whole thereby prejudicially threatening the maintenance of public order. When such a climate in companymunal disharmony is engendered for stimulating anti-Indian and pro-Pakistan feelings during the period of extreme tension between the two companyntries then it must also tend to seriously prejudice the maintenance of security of the State. Our attention has been drawn to the pamphlet Annexure A to the writ petition for the purpose of fortifying the argument that the agitation with respect to the Muslim University at Aligarh in which ,the petitioner had undeniably taken part was a number-violent movement. We do number think- it is possible on the basis of this document to decline to accept the opinion of the District Magistrate who had sufficient material about the activities of the petitioner and of the organisations to which he himself professes to belong. This pamphlet which merely announced a meeting to be held on May 22, 1972 is, therefore, of little companysequence. The companytention that the petitioner is a Muslim theologist highly qualified in Muslim theology, assuming it to be true, is also unhelpful to the petitioner as the impugned order is made on the basis of his activities which are companysidered clearly prejudicial to ,the maintenance of public order and security of State. His learning as a theologist is wholly immaterial. It neither places him above the law number does it displace or detract from the opinion of the District Magistrate with respect to his activities and their effect. On the companytrary it has to be borne in mind that when a person professing to be learned in religious theology encourages defiance of law in the name of religion then ignorant and credulous people are more likely to be misled and swayed by religious passions and sentiments. Such activities naturally have greater potentiality for prejudicially threatening the maintenance of public order. According to the writ petition the petitioner is an active member of the Muslim Majlis and also a member of the Youth Majlis. He was arrested while defying the order promulgated under s. 144, Cr. P.C. This had been preceded by the various Prejudicial activities in the month of May, 1972 as stated in the grounds of detention and was followed two days later by companymunal clashes. This agitation was carried an in companynection with a bill relating to the Aligarh Muslim University ignoring that the legal position in respect of this University had been authoritatively settled by this Court as far back as October, 1967 in S. Azeez Basha v. Union of India . These activities clearly bring the petitioners case within s. 3 of the Act, being calculated to incite companymunal violence. It has then been companytended that some of the grounds of detention companyveyed to the petitioner are vague and, therefore, the order of detention is liable to be struck down as invalid. Reference has in this companynection been made to the last two lines of ground number 1 relating to the companylection of Rs. 700/ for Youth Majlis and to grounds number. 2 and 3. The argument is wholly misconceived. If ,the last two lines are read, as they should be, along with the remaining companytents of ground number 1 it cannot be said that the petitioner was unable to tender his explanation with respect to the allegation companytained therein. Quite clearly, the exact point of time and the people from whom small amounts were companylected companyld number possibly be stated with precision. Grounds number. 2 and 3, as is clear, companytain precise details in the various clauses enumerated therein According to ground number 2 the petitioner has extra- territorial loyalties and, therefore, he is a threat to security of India and this companyclusion is arrived at on the basis of the instances stated in cls. a to d which are precise and definite. Similarly, ground number 3 says that the petitioner has been exciting companymunal feelings among the Muslims in India and companytributing to companymunal disturbances in Aligarh city and this companyclusion is based on instances stated in cls. a to d which are precise and definite. lie instances. under both these grounds are relevant and germane. to the object which is sought to be achieved by s. 3 of the Act for the purpose of detaining persons who are likely to act in a manner prejudicial to the security of the State or maintenance of public order. The 1 1068 1 S.C.R. 833.	Case appeal was rejected by the Supreme Court
ORIGINAL JURISDICTION Writ Petitions Nos. 164 and 165 of. 1972. Petitions under Art. 32 of the Constitution of India for the enforcement of fundamental rights. K. Sen, in W.P. No. 164 B. Sen, in W.P. No. 165 Krishna Sen, S. R. Agarwala and R. K. Khanna, for the petitioners. S. Nariman, Additional Solicitor-General of India and P. Nayar for the respondents. The Judgment of the Court was delivered by SIKRI, C.J. The same point of law arises in both the writ petitions and it will suffice if facts in writ petition No. 164 of 1972 are set out. The petitioner, Ramanlal Bhogilal Shah, was the Gene- ral Manager of United Commercial Bank Ltd. till January 17, 1968 when he became the Chairman and whole time Director of the said bank. Upon nationalisation of the bank, the petitioner was appointed Custodian thereof and he companytinued as Custodian till September 1, 1971. On June 4, 1966 the United Commercial Bank had booked a forward exchange companytract for Hindustan Motors for pound 9,32,617 at the rate of 1s. 529/32d, per rupee. On June 6, 1966, the rupee was devalued. On May 24, 1971 the, petitioner was served with summons under S. 19-F of the Foreign Exchange Regulation Act, 1947-hereinafter referred to as the Exchange Act to give evidence in the enquiry which Shri D. K. Guha, Deputy Director, Enforcement Directorate, was making into certain offences under the Exchange Act. The petitioner was examined on June 3, 1971, June 16, 1971 and June 17, 1971. According to the petitioner, the entire examination on the said dates related to the booking by the United Commercial Bank of the aforesaid forward exchange companytract dated June 4, 1966. On August 31, 1971, the petitioner was arrested unders. 19B of the Exchange Act. Sub-section 1 of S. 19B provides that if any officer of Enforcement . . . has reason to believe that any person in India or within the Indian customs waters has been guilty of an offence punishable under the Exchange Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. Sub-section 2 provides that every person arrested under sub-section 1 shall, without unnecessary delay, be taken to a Magistrate. Sub-s. 3 empowered an officer of Enforcement arresting any person to release such person on bail or ,otherwise. In this companynection he has the same powers and is subject to the same provisions as the officer-in charge of a police station. The grounds of arrest served on the petitioner are elaborate. These give detailed reasons why the enforcement officer had reasons to believe that the petitioner had been guilty of an offence under s. 4 2 and under S. 22 of the Exchange Act punishable under s. 23 thereof. We may reproduce paras 31 to 40 of the grounds of arrest. AND WHEREAS by such criminal acts the Bank companyverted pound sterling number at the rate prescribed by the Foreign Exchange Dealers Association of India effective from 8-6-66 as aforesaid but at the rate of Rs. 1-5 29/32d Re. 1 during the period of 8-7-66 to 3-3-67 on the total amount of pound 9,32,617-0-od AND WHEREAS the aforesaid amount of Pound 9,32,617-0-0d has been companyverted into Indian cur- rency at rates other than the rates authorised by the Reserve Bank of India AND WHEREAS such unauthorised companyversion has beenmade without fulfilling the companydition prescribed in Section XXVIII of the Exchange Control Manual published by the Reserve Bank of India as aforesaid. AND WHEREAS such companyversion of pound sterling into Indian currencies has been made in companytravention of Section 4 2 of the said Act AND WHEREAS false information has been furnished to the Reserve Bank of India thereby companytravening the provisions of Section 22 of the. said Act AND WHEREAS the aforesaid companytraventions, have been companymitted by the said Bank or have taken place with the companysent of the said R. B. Shah AND WHEREAS at the time of the aforesaid companytraventions were companymitted, the said R. B. Shah was in charge of, or was responsible to the United Commercial Bank Limited for the companyduct of the business of the said Bank 38 AND WHEREAS the said R. B. Shah failed to prove in companyrse of his statements made under Section 19F of the said Act before Shri D. K. Guha, Deputy Director of Enforcement that the companytravention took place without his knowledge or that he exercised all due diligence to prevent the aforesaid companytravention, as required under Section 23C of the said Act. 39 AND WHEREAS, in view of the aforesaid facts ,and circumstances, 1, Onkar Nath Chattopadhyay, Enforcement Officer, Enforcement Directorate, Department of Personnel, Cabinet Secretariat, Government of India, being an officer of Enforcement authorised by the Central Government to exercise the powers under, Section 19B of the said Act, have reason to believe that the said B. Shah in India has been guilty of offences under Section 4 2 and under Section 22 of the said Act punishable under Section 23 of the said Act NOW, THEREFORE, I arrest the said R. B. Shah on the grounds stated herein above, today the 31st, August, 1971 at 10.35 a.m. under Section 19E 1 of the Foreign Exchange Regulation Act, 1947. The question arises, with which we will presently deal with, whether after those grounds have been served on the petitioner, it companyld be said that he was a person accused of an offence within art. 20 3 of the Constitution. The petitioner was produced before the Chief Presidency Magistrate, Calcutta, on August 31, 1971, who released him on bail of Rs. 10,000 with the direction that the petitioner should companytact the Investigating Officer every alternate day during the next two weeks and thereafter as and when called for. On September 6, 1971, the Chief Presidency Magistrate, Calcutta, recorded Both accused are on C.B. and present. Perused report submitted by I.O. I.O. prays for three months time for submitting further report. Time allowed till 6-12-71 for submission of report. On December 6, 1971, the order is recorded as follows Both accused are on C.B. and present. Perused report submitted by Enforcement Directorate. Further three months time. Time allowed till 6-3-72 for companypletion of investigation. I.O. is directed to expedite and file companyplaint, if any, at an early date. On March 6, 1972, it was inter alia ordered Since numberregular companyplaint has tiff number been filed, personal exemption prayed for is allowed. The order further proceed Considered I.O remand report. He submits that companycerned documents remain sealed in that Court and He further says companyplaint will be filed soon after the matter is disposed by the Supreme Court. Considering such aspects of the question I.O. is allowed time till 6-72 for a report about progress of investigation and submission of, regular companyplaint, if any, against, the accused persons. It is alleged in the petition that pursuant to enquiries made in this behalf, your petitioner has I companye to learn that the Supreme Court proceedings referred to by the, respondent , No. 4 before the Chief. Presidency Magistrate, Calcutta, as recorded in his order dated 6th March 1972 arose out of a writ petition filed by Hindusthan Motors Ltd. before the Honble High Court at Calcutta challenging inter alia the search at the premises of Hindusthan Motors Ltd. companyducted by the Enforcement Directorate in or about, October 1969 and the seizure of documents is a result thereof. In the companyrse of this enquiry the petitioner learnt that a case had been registered on a First Information Report dated November 9, 1971, recorded under s. 154 of the Criminal Pro- cedure Code and an order dated November 25,1971 had been obtained, from the Chief Presidency Magistrate, Calcutta, permitting the investigation to be made under s. 155 2 of the Code of Criminal Procedure. This First Information Report deals with the forward exchange companytract purported to have been entered on June 4, 1966 by M S Hindusthan Motors Ltd. and the United Commercial Bank Ltd. The offences alleged in the first Information Report are s. 120B read with s. 420 I.P.C., and under s. 2 read with s. 23 1 b of the Exchange Act, and the names and addresses of the accused are given as the Management and other officers of the United Commercial Bank and the Management and officers of the Hindusthan Motors Ltd. On April 17, 1972 another summons was issued, to the peti- tioner under s. 19-F of the Exchange Act to appear before, the Deputy Director, Enforcement Directorate, on April 28, 1972 to give evidence relating to the transaction of exchange companytract booked from Hindusthan Motors Ltd. on June 4,1966. The petitioner wrote to the Deputy Director submitting that the summons was violative of art. 20 3 of the Constitution. In this companynection he submitted as follows I remind you that after examining on the 3rd June, 1971, 16th June. 1971 and 17th June 1971 proceedings have been initiated and I was arrested on the 3 1st August, 1971 and in the grounds of arrest one of the grounds of accusation mentioned is the transaction referred to by you in the summons. The petitioner requested the Deputy Director to withdraw the summons On April 22, 1972 the Deputy Director informed the petitioner that the companytentions had numbersubstance at all. He further informed the petitioner that the summons issued on April 17, 1972 companyld number be withdrawn and requested the petitioner to companyply with the name. The petitioner thereupon filed the present petition on April,27, 1972. The learned companynsel for the petitioner, Mr. A. K. Sen, company- tends that on the facts given above the petitioner fell within the description of a person accused of an offence within the meaning of art. 20 3 . He companytended that after the Enforcement Officer had examined the petitioner and put his companyclusions in the grounds of arrest, the petitioner was definitely accused of an offence under the Exchange Act. He next companytends that at any rate, the petitioner was accused of an offence when the First 13-L796Sup.C.I./73 Information Report was recorded under S. 154, Cr. P.C., by Shri J. N. Prabhakar, Deputy Superintendent of Police, Central Bureau of Investigation, Special Police Investigation Unit, New Delhi. The learned Additional Solicitor General says that the first point is companycluded by the decision of this Court in Romesh Chandra, Mehta v. State of West Bengal. 1 He strongly relies on the following passage at p. 479 It was strenuously urged that under s. 104 of the Customs Act, 1962, the Customs Officer may arrest a person only if he has reason to believe that any person in India or within the Indian Customs waters has been guilty of an offence punishable under S. 135 and number otherwise and he is bound to inform such person of the grounds of his arrest. Arrest of the person who is guilty of the offence punishable under s. 135 and information to be given to him amount, it was companytended, to a formal accusation of an offence and in any case the person who has been arrested and who have been informed of the nature of the infraction companymitted by him stands in the character of an accused person. We are unable to agree with that companytention. Section 104 1 only prescribes the companyditions in which the power of arrest may be exercised. The officer must have reason to believe that a person has been guilty of an offence punishable under S. 135, otherwise he cannot arrest such person. But by informing such person of the grounds of his arrest the Customs Officer does number formally accuse him with the companymission of an offence. Arrest and detention are only for the purpose of holding effectively an inquiry under S. 107 and 108 of the Act with a view to adjudging companyfiscation of dutiable or prohibited goods and imposing penalities. At that stage there is numberquestion of the offender against the Customs Act being charged before a Magistrate. Ordinarily after adjuding penalty and companyfiscation of goods or without doing so, if the Customs officer forms an opinion that the offender should be prosecuted he may prefer a companyplaint in the manner provided under s. 137 with the sanction of the Collector of Customs and until a companyplaint is so filed the person against whom an inquiry is companymenced under the Customs Act does number stand in the character of a person accused of an offence under s. 135. 1 1969 2 S.C.R. 461. The learned companynsel for the petitioner, however, companytends that the facts here are different. He says that under the Exchange Act the position is slightly different. He further says that in Romesh Mehtas case 1 numberenquiry had been made while in the present case an enquiry under s. 19F had been made and the Deputy Director had companye to a definite companyclusion that the petitioner was guilty of an offence. He further says that the next step would be an enquiry under s. 23 of the Exchange Act which might result in a penalty under s. 23 1 a or the case being sent to a Court for trial. He says that as far as the enquiry under s. 23 1 a is companycerned, it is an enquiry in respect of art offence and numberfurther charge or companyplaint is necessary before undertaking the enquiry. The companytends that the protection under art. 20 3 extends number only to criminal trials, but also to trials of all offences under the Exchange Act because for the same offence one person may be companyvicted and penalty levied under s. 23 1 a or companyvicted by a Court and sentenced to imprisonment. These aspects have number been companysidered by this Court in any case which has been brought to our numberice, but we do number think that it is necessary to dispose of these companytentions because we are of the opinion that the second point raised by Mr. A. K. Sen must prevail. It is well settled that with the lodging of a first information report a person is accused of an offence within the meaning of art. 20 3 . In M. P. Sharma v. Satish Chandra 2 where search warrants were issued against persons who had been included in the category of accused in the first information report, Jagannadhadas, J., observed at p. 1088 Nor is there any reason to think that the Protection in respect of the evidence so procured is companyfined to what transpires at the trial in the companyrt room. The phrase used in article 20 3 is to be a witness and number to appear as a witness-. It follows that the protection afforded to an accused in so far as it is related to the phrase to be a witness is number merely in respect of testimonial companypulsion in the companyrt room but may well extend to companypelled testimony previously obtained from him. It is available therefore to a person against whom a formal accusation relating to the companymission of an offence has been levelled which in the numbermal companyrse may result in prosecution. Whether it is available to other persons in other situations does number call for decision in this case. 1 1969 2 S.C.R. 461. 2 1954 S.C.R. 1077. In Raja Narayanlal Bansilal v. Maneck Phiroz Mistry 1 it was observed Similarly, for invoking the companystitutional right against testimonial companypulsion guaranteed under Art 20 3 it must appear that a formal accusation has been made against the party pleading the guarantee and that it relates to the companymission of an offence which in the numbermal companyrse may result in prosecution. In Romesh Chand Mehta v. State of West Bengal 2 Shah, J., after reviewing a number of authorities, observed at p. 472 Normally a person stands in the character of an ,accused when a First Information Report is lodged against him in respect of an offence before an Officer companypetent to Investigate it, or when a companyplaint is made relating to the companymission of an offence before a Magistrate companypetent to try or send to another Magistrate for trial of the offence. The Additional Solicitor General says that the petitioner had number been specifically named as accused in the First Information Report and, therefore, he is number entitled to the protection under Art. 20 3 . We are unable to agree with him in this respect. The petitioner was the General Manager of the United Commercial Bank and it was alleged in the grounds of arrest that the petitioner was in charge of, or was responsible to the United Commercial Bank Ltd. for the companyduct of the business of the said Bank, and that he failed to prove in companyrse of his statements made under S. 19F before Shri D. K. Guha, Deputy Director of Enforcement, that the companytravention took place without his knowledge or that he exercised all due diligence to prevent the aforesaid companytravention, as required under S. 23C of the Exchange Act. In view of these allegations it is idle to companytend that the petitioner was number included in the expression the management and other officers of the United Commercial Bank Ltd. We have already mentioned that in the First Information Report it is the same forward Exchange Contract which is the subject-matter of charge. Although we held that the petitioner is a person accused of an offence within the meaning of art. 20 3 , the only protection that art. 20 3 gives to him is that he cannot be companypelled to be a witness against himself. But this does number mean that he need number give information regarding matters which do number tend to incrimi- 1 1961 1 S.C.R. 417 438. 1 1969 2 S.C.R. 461 nate him. This Court observed in State of Bombay V. Kathi Kalu Oghad 1 as follows. In order that a testimony by an accused person may be said to have been self- incriminatory the companypulsion of which companyes within the, prohibition of the companystitutional provision, it- must be of such a character that by itself it should have the tendency of incriminating the accused, if number also of actually doing so. In. other words, it should be a statement which makes the case against the accused person alteast probable, companysidered by itself. Therefore we are unable to set aside the summons. The peti- tioner must appear before the Deputy Director and answer such questions as do number tend to incriminate him, as explained by this Court. The petition is accordingly allowed to the extent that it is declared that the petitioner is a person accused of an offence within art.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2300 to 2302 of 1969 and 14 15 of 1970. Appeal by a special leave from the judgment dated August 7, 1968 and 18th August 1969 in Sales Tax Reference No. 574 of 1963, and Special appeal No. 330 of 1963, Misc. Application No. 177 of 1963 and S.A. Nos. 423 and 424 of 1968 respect- ively. V. Gupte, K. L. Arora, S. K. Bagga and S. Bagga, for the appellant. D. Karkhanis and O. P. Rana, for the respondent. The Judgment of the Court was delivered by HEGDE, J. These are appeals by special leave. They are filed by the same assessee. They arise from the decision of a Division Bench of the Allahabad High Court. The judgment under appeal number only deals with references made under the P. Sales Tax Act 1948 hereinafter referred to as the Act but also the two Writ Petitions filed by the assessee. The assessee who is a registered dealer under the Act is having his business at Kanpur. It carries on business in hydrogenated oil and washing soap. It also imports and distributes vanaspati as an agent of Malwa Vanaspati and Chemical Company Ltd., Indore. In these appeals we are companycerned with the assessees assessment of sales tax for the assessment year 1957-58. Its return for that year disclosed a gross as well as net turnover of Rs. 1,66,387.03 P. Along with its return the assessee paid Rs. 1,060.30P. towards the tax due. Before the assessing authority the assessee admitted that its tax liability was Rs. 10,339.19P. It is admitted as well as proved that the assessee had companylected from its purchasers the said amount of Rs. 10,339.19P. The Sales Tax Officer after making certain enquiries came to the companyclusion that the total turnover of the assessee during the assessment year in question was Rs. 58,06,132.30P. The assessee was given opportunity, to show that the estimate made by the Sales Tax Officer was number companyrect. From the records of the case we find that as many as 30 adjournments were given to the assessee to establish its case but the assessee did number take advantage of those opportunities. The case was finally posted for bearing on 24th March, 1962. That day the assessee was absent but it made an application for adjournment of the case by 15 days. That adjournment was number granted and it companyld number have been granted because the assessment would have been barred by the end of the financial year 1961-62. Hence the assessing authority, on the basis of its best judgment determined the turn-over of the assessee at Rs. 58,06,132.30P. and determined its tax liability at Rs. 3,62,691.62P. under section 3A of the Act. Against the order of assessment the assessee filed an appeal within 30 days from the date of the order of assessment. At the time of filing the appeal the assessee deposited only a sum of Rs. 1,600. It appears that the office of the Appellate Judge raised some objections as to the maintainability of the appeal. After receiving some explanation from the assessee the appeal was entertained and numberice issued to the assessing authority. When the Sales Tax Officer put in his appearance in the appeal he objected to the maintainability of the appeal on the ground that the Priviso to Section 9 of the Act had number been companyplied with. That objection was accepted and the appeal was dismissed as number maintainable. Thereafter at the instance of the assessee certain questions were referred to the High Court for ascertaining its opinion. During the pendency of that reference the assessee filed a Writ Petition under Article 226 of the Constitution challenging the validity of the Notification issued under Section 3A. Thereafter another application was made under Article 227 of the Constitution challenging the recovery proceedings. Both the Writ Petitions were dismissed. In the reference made by the Appellate Judge the High Court came to the companyclusion that the appeal was properly dismissed. Mr. Gupte, the learned companynsel for the assessee-appellant advanced the following companytentions before us- That the appeal was illegally dismissed That the assessee-appellant being an importer cannot be companysidered as one of the successive dealers in the series of sales as companytemplated by Section 3A and That the Notification issued under Section 3A was ultra vires the power granted on the government. In order to appreciate the companytentions advanced, it is necessary to refer to certain provisions of the Act. Section 3 1 of the Act provides Subject to the provisions of this Act every dealer shall, for each assessment year, pay a tax at the rate of three pies per rupee on his turnover of such year, which shall be determined in such manner as may be prescri- bed. Remaining portion of the provision is number relevant for our purpose . 42 7 Section 3A 1 reads thus Notwithstanding anything companytained in Section 3, the State Government may, by numberification in the, official Gazette, declare that the turnover in respect of any goods or class of goods shall number be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify. Remaining portion of Section 3A is number relevant for our purpose . Now we companye to Section 9 1 and this section provides Any dealer objecting to an order allowing or refusing an application for exemption certificate under clause b of sub-section 1 of Section 4 or to an order refusing an application under Sec. 30 or to an order imposing a penalty under Section 15-A or an assessment made under Section 7, 7-A, 7-B 18 or 21, may within 30 days from the date of service of the companyy of the order or numberice of assessment, as the case may be, appeal to such authority as may be prescribed Provided that numberappeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the, amount of tax admitted by the appellant to be due, or of such instalments thereof as may have become payment emphasis supplied Second proviso is number relevant for, our present purpose . We may number turn to, rules 12 and 41 2 . Rule 12 provides for the submission of the quarterly returns by an importer. Rule 41 prescribes the, mode of submission of returns and assessment. Sub2 of Rule 41 prescribes Before submitting the return under sub- rule 1 , the dealer shall deposit in the treasury the amount of tax calculated by him on the turnover shown.in such return and shall submit the treasury challan with the return or submit with the return a cheque for the amount, so calculated. Proviso is number relevant for our present purpose . Having referred to the material provisions in the Act and the Rule, let us number turn back to the companytentions advanced before us. We shall take up the last two companytentions first, namely, that the assessee who is an importer, number being one of the successive dealers companyld number have been brought to tax under section 3A and as such the numberification issued by the Government under section 3A bringing to tax the import of vanaspati made by the assessee from Indore under Section 3-A, is ultra vires. It may be numbered that Section 3 is the general provision. It provides for multipoint tax. 2-L796Sup. CI/73 To this general Rule cartain exceptions are, provided. One of the ,exceptions is that provided under Section 3A. That Section permits the Government to Select certain items of goods for a single point levy. Vanaspati is one of the items of goods for a single point levy. The appellantdoes number companytest the companypetence of the legislature to enact Section 3A. It also does number companytest the validity ,of the power companyferred on the Government to select sale of certain ,goods for single-point taxation. What is companytended on its behalf to that section 3A provides that single-point levy can be imposed only on the successive dealers in the series of dealers an importer is number one such dealer he being the very first dealer in the State. Undoubtedly, an importer is one of the, dealers. He is the first dealer in the State. The chain of successive dealers begins from the first dealer and it goes upto the last dealer. Any one of the dealers in this chain can be companysidered as a successive dealer. The series do number being in the middle. It must necessarily begin at the very beginning. This is also the view taken by the Allahabad High Court in Ram Kumar Rajendra Swaroop vs. Commissioner of Sales Tax 1 . It is an obvious companyclusion. If an importer is one ,of the successive dealers, which undoubtedly he is, necessarily the numberification issued by the Government must be companysidered to be a valid numberification. In this view we reject the last two companytentions advanced by Mr. Gupte. Now turning our attention to the first companytention advanced by Mr. Gupte, we find there are several difficulties in the way of accepting the same. As mentioned earlier the assessee in his return has shown what its turnover was and at what rate the tax is pay,able by it. It had admitted before the assessing authority what its turnover was. Further it had also admitted before that authority ,that it was liable to pay tax at the rate of one anna per rupee on its turnover which companyes to Rs. 10.339.19p. It had also admitted before the same authority that it had companylected that amount from its purchasers. It did number dispute before the assessing authority the validity of the numberification issued under section 3A. Under Rule 41 2 read with Rule 12 it was bound to submit quarterly returns. We take it that it must have submitted its, quarterly returns. Under ,sub- rule 2 of Rule 41 the assessee was bound to deposit the tax ,due from it according to its returns. In other words even according to the assessee it was bound to deposit into the Treasury or pay cheque to the assessing authority of Rs. 10,339.19p. Admittedly, it had number done so. What is urged by the learned companynsel is that whatever might be the facts admitted in the return and whatever might be the admissions made before the assessing authority it was open to the assessee to take a different stand in its memorandum ,of appeal and what is relevant for the purpose of Section 9 is the 1 19 S.T.C. 241. stand taken by the assessee in the memorandum of appeal. In support of that companytention two decisions One of the Allahabad High Court in Ghanshyam Dass Balmukund vs. The State of Uttar Pradesh Ors. 1 and the other of the Kerala High Court in United Timber Cashew Products P Ltd. vs. Sales Tax Officer, Cannanore, 2 were cited. Those decisions undoubtedly support the companytention of the, Appellant but we find it difficult to accept the companyclusions reached by the Allahabad High Court and the Kerala High Court. In his decision the learned single Judge of the, Kerala High Court has merely followed the Allahabad High Courts decision. If we companye to the companyclusion that the expression tax admitted in the proviso to Section 9 1 means that admitted in the memorandum of appeal, section 9 can be made wholly use less. All that an assessee has to do is number to admit his liability in the memorandum of appeal, whatever his stand might have been beforethe assessing authority. Ordinarily numberinterpretation should be placed on a provision which would have the effect of making the provision either otiose or a dead letter. Further, to find out the true meaning of the expression tax admitted we must take into companysideration the remaining words of the proviso namely or such instalments thereof as may become payable. Those words furnish a key to the interpretation. If one of the companyditions for maintainability of the appeal is payment of the instalments which have become payable under Rule 41 2 . It means that the admission that has got to be taken into companysideration is that made before the assessing authority and number before the appellate authority That apart we do number think that the stand taken by the Appellant before the appellate authority can be companysidered as a bona fide stand. We are of the opinion that the companytention taken by the appellant, before the appellate authority that it cannot be brought within the scope of section 3A of the Act was an afterthought. No such companytention was taken before the assessing authority.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 105 of 1970. Appeal by special leave from the judgment and order dated April 17, 1970 of the Rajasthan High Court at Jodhpur in S. Cr. Appeal No. 283 of 1967. Nuruddin Ahmad F. S. Dave and Subhag Mal Jain, for the appellant. Baldev Mehta, for the respondent. The Judgment of the Court was delivered by DUA, J.-In this appeal by special leave from the judgment of the Rajasthan High Court Ram Narain, appellant, challenges his companyviction for the offences under ss. 467 and 120B, P.C. He,, along with three others, had been companymitted for trial in the companyrt of Sessions Judge, Kota on ten charges for offences under ss. 467, 468, 420 and 120B, I.P.C. It is number necessary to reproduce all the charges and it would suffice if we set out the charges under S. 467 and 120B, P.C., because by the impugned judgment of the High Court the appellants companyviction was sustained only on charges under these two sections. Those charges are I That you between the months of November, 1959 to January, 1960, at your house at Dadvada entered into a companyspiracy with Sarvashri Madan Mohan, Badriprasad and Bakshi Gajpatsingh and others, to companymit off ences of forgery using forged documents as gen uine and of cheating the public, Municipal Board and the Government in respect of the sale of some pieces of land belonging earlier to the Gram Panchayat Khandgawari in favour of Moolsingh, Mukatbeharilal and Surajsingh and that you did some act to wit forged the Proceedings of the Pattas in favour of the above said persons and the signatures and the thumb impressions, of the Panchas of the defunct Gram Panchayat and made false entries in the Cash Book of the said Panchayat of he year 1957-58 at pages 42 and 45 and affixed the seal of that Gram Panchayat and put your signatures on the Pattas so forged, all in the capacity of the Surpanch of that Gram Panchayat besides agreement to companymit the offences under sections 457, 468 and 420, of the I.P.C. punishable with rigorous imprisonment for over two years and thereby companymitted an offence punishable under section 120B of the I.P.C. and within my companynizance. That during the same period, you forged Patta proceedings in antedates in respect of the sale of land 30X35 belonging earlier to the defunct Gram Panchayat Kandgaonri in favour of Shri Surajsingh and put your own signatures on the forged document purporting to be valuable security to wit, the patta in favour of Surajsingh and gave it to Shri Surajsingh and that you thereby companymitted an offence punishable under section 467, of the P.C. and within my companynizance. That during the same period, you forged patta proceedings in antedates in respect of the sale of land 50X 50 belonging earlier to the defunct Gram Panchayat Khandgaonri in favour of Mukat Behari and put your signatures on the forged document purporting to be a valuable security to wit the patta in favour of Mukat Beharilal and gave it to Shri Mukat Behari and that you thereby companymitted an offence punishable under section 467 of the Indian Penal Code and within my companynizance. That during the same period you forged patta proceedings in antedates in respect of the sale of land 30X30 belonging earlier to the defunct Gram Panchayat Khandgaonri, in favour of Shri Moolsingh and put your own signatures on, the forged document purporting to be valuable security to with the patta in favour of Shri Moolsingh and gave it to Shri Moolsingh and that you thereby companymitted an offence punishable under section 467 of the P.C. and within my companynizance. Village Khand Gawadi had before October, 1958 a panchayat of which Gangaram P.W. 3 was the Sarpanch and the appellant its Up-Sarpanch. In the months of April and May, 19S8 the appellant officiated for the Sarpanch because the latter Gangaram was busy in companynection with his daughters marriage. By means of a gazette numberification No. 1128 8/F. 1 a 48L 59/A/55 dated 16-10-58 the Rajasthan Government extended the limits of the municipal companyncil, Kota, amongst other villages, to Khand Gawadi also. The Municipal Council took over charge from the Gram Panchayat of this village on January 7, 1959. According to the prosecution version during the months of November, 1959 to January, 1960, long after the village panchayat had ceased to exist, the appellant entered into a companyspiracy with the other accused persons tried along with him in the sessions companyrt and Bhanwarlal son of Bapulal who became an approver and appeared as P.W. 1 in the case to cheat the members of the public, the Municipal Council, Kota and the Government. The modus operandi for carrying out the object of this companyspiracy was to persuade such members of the public as were amenable to their persuasion to part with money for purchasing residential plots in village Khand Gawadi and in furtherance of this companyspiracy they forged sale proceedings and pattas by ante-dating them and forging signatures of the other Panchas on such pattas and sale proceedings. The appellant himself affixed his signatures as Sarpanch and put the seal of the village Panchayat on the forged documents. The trial, as is obvious, from the charges reproduced above, was companyfined to the sale proceedings and pattas in the names of Mool Singh, Mukat Beharilal and Suraj Singh. Bhanwarlal P.W. 1 , who was also stated to have been a party to this companyspiracy was granted pardon and having become an approver appeared as a witness in support of the prosecution. The Sessions Judge, after companysidering the prosecution evidence and the evidence of the defence witnesses, produced by the appellant, upheld the prosecution case against the appellant holding that he and the approver, Bhanwarlal, had joined hands in forging the sale proceedings and pattas mentioned in the charges and also in forging thereon the signatures of the other Panchas. In fact, according to the trial companyrt, it was the appellant who had dragged Bhanwarlal into the companyspiracy and their activities were motivated by a desire to cheat the Municipal Council, Kota, the members of the public and the Government of Rajasthan by making them part with possession of their valuable land in village Khand Gawadi for numberinal Drice. On this finding the offence of companyspiracy under s. 120B was held proved against the appellant. He was also held guilty of the offence under s. 467, I.P.C. Charges under the other sections were held number proved. The appellant was accordingly sentenced to rigorous imprisonment for three years and a fine of Rs. 200 under s. 120B and to rigorous imprisonment for two years and a fine of Rs. 200 under s. 467, I.P.C. In default of payment of fine the appellant was directed to undergo six months further rigorous imprisonment in each case. Both the substantive sentences were directed to be companycurrent. The other accused persons Bakshi Gajpat Singh, Madan Mohan and Badri Prasad were acquitted. On appeal the High Court affirmed the appellants companyviction on both these companynts but reduced his sentence to rigorous imprison- ment for 15 months and a fine of Rs. 200 on each companynt. The sentences of imprisonment were directed to be companycurrent. In default of payment of fine the appellant was directed to undergo further rigorous imprisonment for three months on each companynt. In this Court Shri Nuruddin Ahmad, the learned companynsel for the appellant at the outset pointed out that in the High Court an application had been made on behalf of the appellant on April 7, 1970 to recall Gangaram P.W. 1 for cross-examining him and also for examining Mukat Beharilal and M. L. Parekh Deputy Superintendent of Police in charge, as companyrt witnesses, but although arguments were addressed on that application at some length the High Court did number care to deal with the, matter or even to refer to it in its judgment. In this companynection our attention was drawn to Annexure D to the petition for special leave in this Court. Anenexure D is said to be a companyy of the application filed in the High Court by Shri V. S. Dave, Advocate for the appellant, under s. 540, Cr. P.C. The material part of Annexure D reads That in the above numbered appeal prosecution examined Ganga Ram P.W. 3 as a witness. That Gangaram besides the present companyplaint Ex. P-19 also lodged a companyplaint against appellant for offence under sections 409, 477, I.P.C. and the accused appellant has been acquitted in the said case. That the judgment in case under sections 409 and 477, I.P.C. was delivered subsequent to the examination of Gangararn as P.W. 3 and as such he companyld number be cross-examined in respect of his earlier companyplaints and fact of enmity and false companycention of cases against the appellant companyld number be put to him. That appellant has also been companyvicted for forging the, patta alleged to have been given to Mukat Beharilal. That Mukat Behari Lal has been withheld by the prosecution. That the appellant has learnt that Mukat Behari Lal filed a writ petition in this Honble Court in respect of the said patta and- same is said to have been decided in his favour. That since the subject matter of patta of Mukat Behari Lal has been adjudicated upon by this Honble Court his examination in this Honble Court as a witness is essential to the just decision of this case and as also the production of judgment will have important bearing in the case. 4 68 That the Deputy S. P. who companyducted the investigation of this case has also number been produced and same has caused great prejudice to the case of the appellant as the appellant companyld number bring on record as to from whose custody the documents Ex. P-5, P-6, P-9 and P-12 That the examination of aforesaid three Witnesses is essential to the just decision of the case. It is, therefore, prayed that your lordships would be pleased to accept this application recall Gangaram P.W. 3 for further cross- examination and also call Mukat Behari Lal and the Investigating Officer as Court wit- nesses or grant permission to appellant to summon them. Our attention was also invited to Annexures E and F to the Special Leave Petition. Annexure E is a certified companyy of a slip of the Court Reader in single Bench Cr. A. No. 283 of 67, Ramnarain v. State in the High Court of Judicature for Rajasthan at Jodhpur. That slip reads This application was found lying in the Chamber of Honble Gattani J. How this application was placed and who placed this application there. C. Sd - Bansidhar Reader 27-4-70 Annexure F a certified companyy of the order dated April 29, 1970 of Deputy Registrar of the High Court in the said Criminal Appeal, which was also brought to our numberice, reads The application has been shown to Honble Gattani j. and according to the direction of his Lordship the application be kept on the file. Sd - G. K. Sharma Dy.Registrar On April 30, 1970 an application was presented on behalf of the appellant in the High Court under s. 561-A. Cr. P.C. This application, according to the appellant, was filed on May 1, 1970 but it was neither listed number heard in companyrt. The following order dated May 18, 1970 as translated into English was recorded by the learned Judge in Hindi - Perused the applications dated 7-4-70 and 30- 4-70 presented on behalf of the appellant. 46 9 I have, decided the case on 17-4-70 and there is therefore numberquestion of saying anything on the merits number. As far as I remember Shri Chiranjilal Agarwal did mention during the companyrse of the arguments on 7-4-70 that he wanted to present an application. Then I had told him that if the application is presented it will also be taken into companysideration. Thereafter during the companyrse of the arguments numberapplication was presented before me. I never saw the application dated 7-4-70 in my Chamber, number anyone said anything to me on 29- 4-70 about this application. Sd - H. D. GATTANI J. The appellants grievance before us is that number- companysideration,, of his application dated April 7, 1970 has resulted in grave miscarriage of justice. Developing this point it has been companytended, that the manner in which this part of the case was dealt with suggests number-application of judicial mind by the High Court to the case as a whole. The second point strongly pressed by Shri Nuruddin Ahmed is that the appellants companyviction is based solely on the testimony of Banwari Lal P.W. 1 , the approver, whose evidence has number been companyroborated in material particulars, companynecting the appellant with the alleged offence in question. The appellants companyviction is,therefore, unsustainable. P.W. 1, according to the appellants, submission, is a wholly unreliable witness add his evidence is so seriously discrepant and unconvincing on vital points that it is. highly dangerous to place any reliance on it. The sustenance of the aPPellants companyviction on the approvers evidence in this case Would be a travesty of justice, said the companynsel. We were taken. through the relevant record of the evidence by the companynsel for both. ,- ides on this part of the case. Now so far as the first grievance is companycerned, the appellants submission cannot be summarily brushed aside as we feel there is prima facie material calling for a further probe into the matter. But as in our view even if the first companytention were to prevail the question of recording additional evidence, as requested on behalf of the appellant, would have to be companysidered and since, in our opinion,, the appeal has to be allowed on the second point, we deem it unnecessary to express any companysidered opinion on the first point. We would, however, like to point out that the application under s. 561-A, Cr. P.C. should have been disposed of after hearing the appellants companynsel and its disposal without such hearing was clearly wrong and unjust. The appellant has a just grievance against the manner in which this application was disposed of. He had a right to be afforded a reasonable opportunity of being heard in support of his application and we are unable to appreciate the disposal of this application in the chambers without giving him such opportunity. The companynsel for the State was also unable to explain the divergence between the order of the Deputy Registrar dated April 29, 1970 and the learned Judges observation in his order dated May 18, 1970 that numberone had said anything to him on April 29, 1970 about the application dated, April 7, 1970. This divergence has also left on our minds a somewhat unhappy impression with respect to the whole matter. We need say numberhing more on this point. Turning to the second point we may first state the legal position relating to the testimony of an approver. Section 133, Indian Evidence Act, which falls in Ch. IX dealing generally with witnesses, expressly provides that an accomplice is a companypetent witness and the companyviction is number illegal merely because it proceeds on uncorroborated testimony of an accomplice. In other words, this section renders admissible such uncorroborated testimony. But this section has to be read along with illustration b to s. 114 which falls in Ch. VII, dealing with Burden of Proof. Section 114 empowers the companyrt to presume the existence of certain facts mid the illustrations elucidate what the companyrt may presume, and make clear by means of examples as to what facts the companyrt shall have regard in companysidering whether or number the maxims illustrated apply to a given case before it Illustration b in express terms says that an accomplice is unworthy of credit unless he is companyroborated in material particulars two examples are also given to further explain this subject. The statute thus permits the companyviction of an accused person on the basis of uncorroborated testimony of an accomplice but the rule of prudence embodied in illustration b of s. 114 strikes a numbere of warning cautioning the companyrt that an accomplice does number generally deserve to be believed unless companyroborated in material particulars. This rule of caution is traceable to the fact that an accomplice witness from the very nature of his position is a suspect. This rule is guided by long human experience and has become a rule of prudence of general application. The companyrts. therefore, companysider it prudent to look for companyroboration in material particulars for sustaining the companyviction of an accused person. An approver who is admittedly guilty of the crime is an accomplice who has betrayed his associates and has apparently sought pardon for saving his own skin. In other words he has purchased companyplete immunity for his prosecution at the expense of his associated by agreeing to give evidence against them for the prosecution. He is. therefore, presumed number to be a man of high character or a fair witness. His pardon being companyditional, to pleased the prosecution he may well weave some false detail into the true details of the prosecution story and may also falsely involve some innocent per- son. There is thus a real danger of his telling a story true in. general outline but companytaining some untruth which he can easily work into the story. It is for this reason that the companyrts as a matter of prudence and caution anxiously look for some companyroboration to satisfy their companyscience that the approvers testimony which is clearly admissible is also worthy of belief. One can of companyrse visualise an accomplice who is genuinely repentant for the companymission of his crime and truly desires to make a clean breast of the whole, affair by way of penetance. But even in such cases the companyrt has to judicially determine the extent to which his uncorroborated testimony can be companysidered as trustworthy by looking to the other relevant material and the attending circumstances on the basis of which the accused can be safely companyvicted. The rule which seems to emerge from the foregoing discussion and judicial decisions is that the necessity of companyroboration as a matter of prudence except when it is safe to dispense with such companyroboration must be clearly present to the mind of the judge. It is in this background that the companyrt is required to determine the nature and extent of companyroboration of an approvers evidence necessary in a given case for sustaining the companyviction of the accused. The companyroborating evidence, broadly stated, must companynect or tend to companynect the accused with the crime charged. This is so because of the danger of the approver introducing some innocent person or persons into an otherwise true prosecution story. Such evidence, however, need number by itself be sufficient for sustaining the companyviction of the accused- for in that case the evidence of the approver would be wholly unnecessary and mere surplusage. Before companysidering the evidence on the record it may be borne in mind that the companyrt should evaluate the evidence of an approver de hors the companyroborating pieces of evidence for if his testimony is itself uninspiring and unacceptable justifying its rejection outright, then, it would be futile and wholly unnecessary to look for companyroborating evidence. It is only when the approvers evidence is companysidered otherwise acceptable that the companyrt applies its mind to the rule that his testimony needs companyroboration in material particulars companynecting or tending to companynect each one of the accused with the crime charged. The offences for which the appellant has been companyvicted, it may be recalled, are of companyspiracy with the approver P.W. 1 as companytemplated by S. 120-B, I.P.C., and forgery of valuable security as companytemplated by s. 467, I.P.C. Before us the companynsel for the State clearly companyfined his companytention to the forgery of valuable security as the real gravamen of the charge against the appellant, of companyrse, in addition to the charge of companyspiracy. We have, therefore, to companysider the evidence bearing in mind the ingredients of these two offences. So far as the charge under S. 120-B, I.P.C. is companycerned the ,only evidence is of the approver and the trial companyrt expressly observed that there was numberother direct evidence of companyspiracy. After companysidering the case with respect to the offence under S. 467, I.P.C. we will turn to the charge of the substantive offence of companyspiracy. Before dealing with the evidence on the offence under S. 467 it may be recalled that the present case was initiated at the instance ,of Ganga Ram, ex-Sarpanch, P.W. 3 and some, others when they presented a companyplaint Ex. P-19 on March 18, 1961 to the Collector, Kota, long after the charge of the Panchayat had been taken over by the Municipal Council. Ganga Ram appears also to have earlier made some, companyplaints to the other officers but as numberhing had companye out of those companyplaints the Collector was approached with an allegation of misappropriation against Ram Narain in March, 1961. The Municipal Council, it is numbereworthy, did number care to initiate the prosecution. Bhanwar Lal, the approver, appearing as P.W. 1 has deposed that in June, 1958 he wanted to buy a plot of land for building his ,own house at Kota where he had been transferred from Udaipur as Train Clerk, Kota Junction. He was introduced to the appellant through one Kanhaiyalal. He gave to the appellant an application for that purpose and also paid Rs. 40 towards the price of the land and the appellant gave him a patta for a piece of land measuring 30X45 without showing him its exact location. Inspite of repeated requests the appellant did number show him the plot on certain pretexts for about four or five months. And then he showed him a plot measuring on 30X35. On objection being raised the appellant promised to give to P.W. 1 some more land elsewhere. It appears that the approver and the appellant had by then become quite intimate. The approver gave to the appellant a companytract for filling up the foundation for a house and also paid him about Rs. 8 or 9 hundred for which he took numberreceipt. The approver also started teaching the appellants children as a private tutor without ,charging anything. It was due to this intimacy that the appellant is said to have asked the approver to help him in companypleting the proceedings of some incomplete patta cases of the Gram Panchayat. Bhanwar Lal, approver, who ultimately agreed to do this work went to the appellants house where he found one Mehta, Secretary of the Mandi Committee, Madan Mohan Vijay and Badri Prasad. The appellant introduced the, approver to Mehta and Madan Mohan and asked them to companyplete the Panchayat records according to his directions. According to the approver he had prepared about 200 pattas and order sheets, in about eight or ten days time. It is unnecessary to go into the remaining evidence of the approver at this stage. Suffice it to say that from his evidence it is number at all clear as to what interest the approver bad in helping the appel- lant in what is described as the forgery of the various documents. His evidence, therefore, seems, prima facie, to be unimpressive and hardly trustworthy. The charge under s. 467, as already observed, is companyfined to four pattas issued in favour of Suraj Singh, Mool Singh and Mukat Behari. Two pattas issued in favour of Suraj Singh are Exs. P5 and P6 and one patta each in favour of Mool Singh and Mukat Behari are Exs. P 9 and P 12 respectively. Before taking up these instances and scrutinising this evidence, we may point out that there is numberevidence worth the name and numberargument was urged before us to attempt to show that in the case of the patta in question either the companysideration received was less than the market value or the, amount realised had been misappropriated and number duly deposited and credited in the appropriate account. There is thus numberquestion of unlawful gain or loss by cheating any-body. Now s. 467 provides for punishment for forging a document which purports to be a valuable security or a will etc. We ,are companycerned with the offence of forging a valuable security. Forgery is defined in s. 463, I.P.C. according to which whoever makes a 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 companymitted, companymits forgery. Section 30, I.P.C., defines valuable security to be a document which purports to be a document whereby any legal fight is created, extended, transferred, restricted, extinguished or released or whereby any person acknowledges that he lies under legal liability or has number a certain legal right. We are, therefore, companycerned only with forgery of valuable security. The fact that the pattas were granted in favour of the three persons mentioned above irregularly or companytrary to any rules or directions applicable to such pattas would be wholly immaterial except to the extent it supports the case of forgery against the appellant. In so far as the case of Suraj Singh is companycerned there are two pattas Exs. P 5 and P 6, both dated May 5, 1958. The two plots measuring about 100 sq. yds. each were allotted to Suraj Singh for a companysideration of Rs. 37.50 each with an additional sum of Rs. 2 each as plan fee. The companysideration money has been described in these pattas to be Bhaint. It is expressly recited in these pattas that the requisite, fee of Rs. 30.50 has been deposited vide Rokarpanna. These pattas are signed by the appellant and clearly there can be numberquestion of forging anybodys signatures, so far as these two documents are companycerned. Exhibit P-4 is the order sheet with respect to Suraj Singh. According to the approver he, the appellant and Badri Prasad, had fabricated the signatures of Ghasi and Babulal and the thumb impression of Panch Bhanwarlal P.W. 8 on Ex. P-4. Except for the approvers bald statement there is numberother evidence in support of this assertion. Babulal who was produced as P.W. 5 expressed his inability to say either way whether Ex. P-4 bore his signatures. He is illiterate and, according to his own evidence, can only put his signatures which also he is unable to identify. Ghasi was number produced by the prosecution. He was, however, produced in defence as D.W. 2 for admitting his signatures on Ex. P- 11, the order sheet relating to Mukat Beharis case. But when he appeared as a defence witness neither the prosecution number the defence asked him any questions with respect to Ex.P-4. The omission on the part of the prosecution to question him about Ex. P-4 in the absence of any companyent explanation is, in our opinion, quite significant. Some evidence has been led with respect to entries in Ex. P- 1, the cash book of the Gram Panchayat but since the charges we are companycerned with are under s. 467 and 120B, I.P.C. it is unnecessary, as indeed, irrelevant, to refer to that evidence. Before us the companynsel for the State expressly companyfined his case to the forgery of the pattas which, according to him, companystitute valuable security within the companytemplation of s. 467. With respect to Suraj Singh, therefore, we do number have any reliable evidence which can be said to companyroborate the approver, assuming the, approvers evidence to be acceptable which we are number inclined to hold. We number turn to Mool Singhs patta Ex. P-9. This patta relates to an area measuring 100 sq. yds. and the companysideration is stated to be Rs. 30 with an additional sum of Rs. 2 as plan fee. Here again, the companysideration is described as Bhaint. Exhibit P-9 also companytains an assertion that the requisite amount of Rs. 32 had been deposited vide Rokarpana. This patta is also signed by Ram Narain and there is numberquestion of forging any one elses signatures. The order sheet relating to this patta is Ex. P-8 which is signed by the appellant and also purports to be signed by Onkar and Ghasi. The position of this patta is numberbetter than that of Ex. P-5 which is in favour of Suraj Singh. Mukat Beharis patta is Ex. P-12 and is for an area measuring 227 sq. yds. and 7 sq. ft. The companysideration is stated to be Rs. too, inclusive of Rs. 2 as plan fee. Here also the amount is, stated to have been deposited as per Rokarpana and the receipt is signed by one M. B. Sharma. The order sheet relating to this patta is Ex. P-11 which purports to bear the signatures of Ghasi and Madan Lal, Ghasi D.W. 2 has deposed about his signatures on Ex. P1 1, as already numbericed. Mukat Beharis case,, if anything, becomes more doubtful because, of the evidence of Ghasi. Suraj Singh was produced as P.W. 2 but he did number support the prosecution and was allowed to be cross-examined by the public prosecutor. Quite clearly his evidence does number show that he was in any way cheated by the appellant. Shri Ganga Ram, the original companyplainant, has appeared as P.W. 3. According to him he 47 5 had taken over charge from the appellant on August 31, 1958 and companytinued to work as Sarpanch till the charge was handed over to the Municipal Council or the Municipal Board. When he want to the office of the Municipal Board to hand over charge, according to his own statement, the appellant had also gone with him. It was after the abolition of the Panchayat that he learnt that the appellant was selling land and issuing pattas and it was then that lie made the companyplaint Ex. P-19. Before handing over charge also he had made certain companyplaints against the appellant on which Shri Mehta, the Division Panchayat Officer had made enquiries but those companyplaints were number substantiated. From his evidence it seems clear that the relations between him and the appellant were far from companydial. Indeed, the appellant had also companyplained against this witness of keeping some money belonging to the Panchayat. Even otherwise his evidence is wholly unimpressive and is difficult to accept on its face value. Again, when we companysider the evidence, of Madan Lal D.W. 1 and Ghasi son of Ramlal D.W. 2 both Panchas of the Panchayat in question upto 1958 and the evidence of Ganesh Ram P.W. 4 the evidence of the approver becomes still more unacceptable. Madan Lal has stated that he was a Panch of Khand Gawari Panchayat upto 1-959 and a piece of land was sold to Mukat Behari in 1958 when he was present in the meeting of the Panchayat. Signatures on Ex. P-11 were identified by him. The Panchayat also sold pieces of land to Mool Singh and Suraj Singh. On his evidence Ex. P-1 1 is clearly a genuine document. Ghasi D.W. 2 also admits his signatures on Ex. P-11. In face of his evidence it is number understood how his signatures can be held to be forged. Ganga Ram P.W. 4 has deposed that he was number literate and companyld only sign his name. After so deposing he expressly stated that he was unable to identify his own signatures. His evidence, therefore, also losses its importance. In face of this material, we find that the appellants companyviction under s. 467. I.P.C. is wholly unsustainable on the existing evidence. The approvers testimony is most uninspiring and there is numbercorroboration worth the name. We number turn to the charge of criminal companyspiracy under s. 120-B, I.P.C. as a separate and distinct offence independent of the offence under s. 467, I.P.C. No doubt in almost every case of companyspiracy it is generally a matter of inference, direct independent evidence being soldom, if ever, forthcoming. But inferences are numbermally deduced from acts of parties in pursuance of apparent criminal purpose in companymon between them. Of such criminal acts the evidence in the case under appeal has number been accepted by us. The evidence of the approver P.W. 1 who would of companyrse be companypetent to prove the substantive charge of companyspiracy, which has number been believed by us with respect to forgery is number easy to accept with respect to the charge, of companyspiracy. His version with regard 15-L796Sup.C.I. /73 to it is far from companyvincing. Though he claims to have prepared 200 pattas and order sheets, evidence regarding only four was led and that too number trustworthy. For the first time he disclosed the story to the police after arrest in expectation of help from them.	Case appeal was accepted by the Supreme Court
ORIGINAL CIVIL APPELLATE JURISDICTION Writ Petition No. 298 of 1971. Petition under Article 32 of the Constitution of India for the enforcement of fundamental rights and Civil Appeal No. 593 of 1972. Appeal by a special leave from the judgment and order dated November 24, 1971 of the High Court of Allahabad in W.P. No. 6667/71. K. Sen, A. P. Singh Chauhan, V. C. Prashar and Dharmpal Singh Chauhan, for the petitioner and appellant. K. Daphtary, B. Sen and O. P. Rana, for the respondents Nos. 1-3 in writ petit-Ion and Appeals . The Judgment of the Court was delivered by RAY, J. The petitioner in this writ petition impeaches the order dated 14 July, 1971 passed by the Deputy Registrar, Cooperative Societies, Meerut, By that order the Deputy Registrar, Cooperative Societies suspended the President and the companymittee of management of Jahangirabad Cooperative Marketing Society Ltd., Jahangirabad. The petitioner Veerpal Singh was the President of the Jahangirabad Cooperative Marketing Society. By that order the Deputy Registrar further appointed Ghanshyam Murari Sharma, Additional District Cooperative Officer, Bulandshahr as Administrator to carry on the functions of the society. The appeal is from the order dated 29 November, 1971 of the Allahabad High Court dismissing in limine the petition under Article 226 of the Constitution. In that petition the appellant Yograj Singh and others challenged the aforesaid order dated 14 July, 1971 suspending the President and the companymittee of management of Jahangirabad Cooperative Marketing Society. Two questions fall for determination in the writ petition and the appeal. First, whether the Deputy Registrar under the Cooperative Societies Act, 1965 referred to as the Act companyld suspend the President and the companymittee of management of Jahangirabad Cooperative Marketing Society. Secondly, whether the Deputy Registrar companyld temporarily appoint an administrator. Counsel on behalf of the petitioner raised three companytentions for impeaching the order of suspension. First, it was said that the order of suspension is void because it is made mala fide and exercised for the companylateral purpose of withdrawing the petitioner from the companymittee of management to which he, was elected and in which he companytinued his office. Secondly, it was said that the order of suspension is bad because there were numbersupersession proceedings as companytemplated in section 35 of the Act. The Registrar did number give an opportunity to the Society and did number hear the Society. The Registrar did number obtain the opinion of the general body of the society as to the suspension of the companymittee. Thirdly, it was said that the suspension order companyld number have the effect of appointment of an administrator under section 35 of the Act. In the month of April 1969 there was an inspection of the Jahangirabad Cooperative Marketing Society hereinafter referred to as the Society . That inspection numbere has, however, number been disclosed. In the month of October, 1969 the petitioner was reelected as a Director of the management of the society. Again, in the month of October, 1969 the petitioner was appointed as a delegate by the companymittee of management of the Society to the Provincial Cooperative Federation. Subsequently, the general body of the Provincial Cooperative Federation elected the petitioner to the companymittee of management of the Federation. In the month of April 1970, the petitioner was also elected Chairman of the Provincial Cooperative Federation. In the month of September 1979 at the instance and under the direction of the Deputy Registrar who had been a former Secretary of the Federation and of Shri Yadav the then Minister of Cooperative Society, the Uttar Pradesh Government numberinated 10. members and a Chairman of the Federation. The petitioner who was the then Chairman, was however omitted from the list of the U.P. Government. In the month of December, 1970 the new Ministry of the U.P. Government revoked the previous order of Government made in the month of September, 1970. In the month of June, 1971 there was again a new Ministry in which Shri Yadav again became the Minister of Cooperative Society. The Government then numberinated 10 members in the companymittee of management of the Federation under section 34 1 of the Act and appointed the Additional Registrar of Cooperative Society as the President. In the month of June, 1971 a lot was drawn to find out which of the Directors of the Provincial Cooperative Federation were to, vacate the office in order to make room for the numberinees of the Government. The petitioner survived his office in the lot. The petitioner made an application for amendment of the petition. In that application for amendment, allegations were made, that Shri Yadav and Tyagi both companytrived to suspend the companymittee of management of the Federation. It was also alleged that the withdrawal of the delegation of the petitioner to the Provincial Cooperative Federation was ante dated. The order of withdrawal was dated 15 July,, 1971. The letter dated 15 July, 1971 is said to have been sent by the administrator of the Society withdrawing the delegation of the petitioner to the U.P. Provincial Cooperative, Federation. The Petitioner denies that alleged fact. In the prayer of the petition for amendment the petitioner asked for quashing the order dated 15 July, 1971. In view of the fact that the petitioner did number allege facts toe raise any plea of malafide acts on the part of the respondents this. Court did number allow any amendment of the petition. The power of suspension of the companymittee of management is, to be found in section 35 2 of the Act. Section 35 2 of the Act is as follows Where the Registrar, while proceeding to take, action under sub-section 1 is of opinion that suspension, of the companymittee of management during the period of proceedings is necessary in the interest of the society, he, may suspend the companymittee of management which shall thereupon cease to function, and make such arrangement as be thinks proper for the management of the affairs of the society till the proceedings are companypleted Provided that if the companymittee of management so suspended is number superseded it shall be reinstated and the period during which it has remained suspended shall companynt towards its term. The Registrar has power under section 35 1 of the Act to, supersede the companymittee of management. The circumstances. under which he can exercise his powers are when in the opinion of the Registrar the society makes default or is negligent in the performance of duties imposed on it by the Act or the rules or the bye-laws of the society or companymits any act which is prejudicial to the interest of the society or its members, or, is otherwise number functioning properly, the Registrar after affording the companymittee of management a reasonable opportunity of being heard and obtaining the opinion of the general body of the society in a general meet- ing called for the purpose in the manner prescribed may, by order in writing, supersede the companymittee of management. These provisions indicate the circumstances under which the Registrar has power to supersede or suspend the companymittee of management and, to appoint an administrator. Sect-ion 35 2 of the Act companyfers power on the Registrar to suspend the companymittee of management during the period of proceedings for supersession. The Registrar has also power under section 35 2 of the Act to make arrangement, as he thinks proper for the management of the society till the proceedings are companypleted. The power to suspend the companymittee of management during the period of proceedings is exercisable when proceedings for supersession have companymenced. Section 35 1 of the Act shows that when the Registrar is of opinion that the companymittee of a companyperative society makes default or is negligent in the performance of duties or is otherwise number functioning properly the Registrar may supersede the companymittee of management and has to give an opportunity to the society to be heard in that behalf. The Registrar has also to obtain the opinion of the ,general body of the society. Therefore, the opinion of the Registrar is to be followed by some definite act which will companymence the proceedings for supersession. The provisions in the Act indicate that some definite step like the issue of, a numberice must be taken under the provisions of section 35 1 of the Act with a view to show that proceedings for supersession of the companymittee are set in motion. It is therefore manifest that power exercisable under section 3 5 2 of the Act is companyfined to the time during the period of supersession proceedings. Unless the proceedings have started as indicated earlier the Registrar cannot call in aid the power exercisable under section 35 2 of the Act. The second question which, has to be decided is whether, the Registrar companyld appoint an administrator in the present case. The Registrar companyld number appoint an administrator. The reasons are these. The proceedings for supersession of the companymittee of management have number companymenced. The proceedings can companymence only when the necessary step to companymence it is taken. The interim suspension of the companymittee of management under section 35 2 of the Act is when in the opinion of the Registrar the suspension of the companymittee of management during the period ,of proceedings is necessary in the interest of the society. As numberproceedings have been set in motion in accordance with the pro-visions of the statute, the interim suspension of the companymittee of management is bad. An appointment of administrator is specifically dealt with in sub-sections 3, 4, 5 and 6 of section 35 of the Act. The appointment of administrator is numbermally after the Supersession of the companymittee of management. It is true that there is numberspecific provision for an appointment of administrator during the interim period. But section 35 2 of the Act states that the Registrar may make such arrangement as he thinks proper for the management of the affairs of the society till the proceedings are companypleted. An appointment of administrator during the interim period is therefore number ruled out of the provisions of section 35 2 of the Act, but the prerequisite companydition to the appointment of the interim administrator has number been fulfilled in the present case, because numberproceedings for the supersession of the companymittee of management of the society have companymenced. The administrator appointed by the Registrar withdrew the delegation of the petitioner appellant Veerpal Singh to the Uttar Pradesh Provincial Cooperative Federation. Under Rule 86 of the Uttar Pradesh Cooperative Societies Rules 1968 a person who is a delegate of a companyperative society shall cease to be such delegate if he is withdrawn by the companymittee, administrator or administrators appointed by the Registrar under section 35 of the Act. In the present case the appointment of the administrator is bad as indicated earlier. The act of the Registrar in withdrawing the dele- gation of Veerpal Singh is also bad because of his infirmity to act is an administrator. For these reasons, the order dated 14 July, 1971 is set aside and quashed. The petition succeeds. The appeal is also allowed.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 1353 to 1355 of 1967. Appeals by certificate from the judgment and Award dated 15th September 1966 of the Mysore High Court at Bangalore in Misc. First Appeals Nos. 199 to 201 of 1963. B. Datar, for the appellants. Veerappa, for the respondent. The Judgment of the Court was delivered by SHELAT, J. These three appeals, by certificate, are by three Khatedars, whose lands were acquired for the submersion area of the Linganmakki reservoir in Mysore State. The areas so acquired were all wet lands and measured 29 acres and 37 guntas, 3.32 acres and 8.20 acres respectively. The Special Land Acquisition Officer classified these lands into rain- fed and tank-fed lands, i.e. one crop and two crop lands, and adopting the method of valuation of capitalising the annual rent paid to the appellants fixed Rs. 600 per acre for the tank-fed, i.e., perennially irrigated wet lands, and Rs. 500 per acre for the rain-fed wet lands. He arrived at these figures on, a finding that the average annual rent in respect of these lands was 1-1/2 pallas of paddy per acre which meant that the gross rent was Rs. 37.50 at the rate of Rs. 25 per palla. Deducting land revenue and bad debts he found that the net annual income was Rs. 30 per acre. On a reference by the appellants under sec. 18 of the Land Acquisition Act, 1894, the District Judge increased the valuation to Rs. 2500 per acre for tank-fed lands and Rs. 2000 per acre for the rain-fed lands. The District Judge also adopted the method of valuation by capitalising the income by 20 years. But what he did was to take the whole of the net income arising from the lands instead of capita- lising, only the rent payable to the appellants by the tenants of some of, the lands. In appeals filed by the Acquisition Officer against the awards by the District Judge, the, High Court of Mysore reduced the companypensation to Rs. 1250 per acre for all the lands, irrespective of whether they were tank-fed or rain- fed lands or whether they were self-cultivated or cultivated by tenants. This. the High Court did on the footing that the income from the land was represented by the rent paid by the tenants. in respect of some of the lands, that such rent on an average came to 2-1/2 pallas of paddy and that at the rate of Rs. 25 per Dalla, by capitalising the rent by 20 years, the companypensation would companye to Rs. 1250 an acre. The High Court., in addition, awarded interest at 6 per annum on the amount of companypensation awarded by it. In modifying the District Judges award and reducing the rate, of companypensation to Rs. 1250 an acre. the High Court rejected the measure adopted by the District Judge, viz,., that the geni rent plus the quantity which the tenant would retain- for himself would be the net average in companye of the land. According to the High Court, the District Judge overlooked the fact that the tenant who get some income by cultivating the land did so because he and the members of his family had to expend labour thereon, and that therefore, both the expenses of cultivation as, also the value of such labour expended by the tenant ought to be taken into companysideration. The High Court, held In assessing companypensation for lands acquired, on the basis of capitalisation of annual income the usual method adopted is to capitalise the annual rent on the basis of certain number of years purchase. The High Court also rejected the argument that the land measuring 7 acres 10 guntas, which is the subject-matter of Civil Appeal No. 1354 of 1967 and part of the lands which are the subject matter of C.A. No. 1353 of 1957 were number cultivated by any tenant and were in fact under the Khatedars personal cultivation and that therefore companypensation in regard to them companyld number be fixed by capitalising the annual rent only. The High Court held that if the measure of capitalised annual rent is good in respect of the lands leased, it is equally good in respect of the lands personally cultivated by the claimants. On this basis, the High Court allowed the Land Acquisition Officers appeals, reduced the companypensation to Rs. 1250 per acre in respect of all the lands, irrespective of whether they were under tenants cultivation or under the personal cultivation of the claimants. The question raised before us is whether the High Court followed a companyrect principle while awarding an uniform rate of companypensation for all the acquired lands. It may be that resort may be had to fair rent as a true measure of income derived from a particular land by its proprietor for fixing the companypensation by multiplying it by 20 years as has been done here by the High Court where numberother method of valuation is Dossible. But where the acquired land has been under the personal cultivation of a claimant, the annual rent obtained by him from a tenant from another land may number be the companyrect or real income obtainable by the claimant. The rent of the land under a tenants cultivation may have been agreed upon several years ago or may number otherwise be the fair rent by reason of several factors. Quite apart from that, the two lands may number be equal in quality, situation and productivity and therefore the rent obtained for one cannot be the same for the other. Obviously therefore, the annual rent obtained by a claimant from his tenant for one acquired niece of land cannot be applied as, a measure for another niece of land which is personally cultivated by the claimant. The net return to the claimant from each of the two lands is bound to differ. Ordinarily rent payable by a tenant would be fixed after calculating approxi- mately the gross income less the tenants companyt of cultivation, companyt of labour expended by him and a certain amount of return for all the labour thrown in by him. In the case of land personally cultivated by a claimant, on the other hand, the income derived by such a claimant is arrived at by taking the gross income and deducting therefrom his expenses of cultivation, other expenses and outgoings. The net income thus arrived at is usually multiplied by 20 years purchase and the amount so calculated would be companysidered as equivalent to market value. In our view, the High Court was in error in equating the lands cultivated by the tenants and those under the personal cultivation of the claimants and applying to both a uniform measure, viz., the annual rent obtained from the former for fixing companypensation. The two kinds of lands ought to have been separately treated and even if the rent in the cases of tenant-occupied land was taken as a measure for such land, that companyld number properly be the measure for arriving at the market value of the land under the claimants personal cultivation. Even in respect of lands cultivated by tenants, numbernotices appear to have been issued to them either by the Special Acquisition Officer or by District Judge though some of them did appear as witnesses for the claimants for deposing to the income of the land. Presumably, numbersuch numberices were issued to them on the ground that they were annual tenants and had, therefore, numberalienable interest in the lands cultivated by them. We do number know whether by the expression annual tenants we meant that their tenancy was for one year only and would lapse on the expiry of the year. Even if it were so, by the time the numberifications under secs. 4 and 6 of the Act were issued, in April and August 1960 , the Mysore Tenancy Act XIII of 1952 had companye into force. Sec. 4 of that Act provided that a person lawfully cultivating any land belonging to another person shall be deemed to be a tenant if the companyditions there set out are satisfied. Under s. 5 1 , there can be numbertenancy for less than five years and all tenancies in force on the date of the companymencement of the Act shall be deemed to be tenancies for a further period of five years from such date of the companymencement of the Act. Under sub-s. 2 of s. 5, numbertenancy is terminable before expiry of the period of five years except on the grounds set out in s. 15, e.g., default by such a tenant in paying rent or the fair rent fixed under the Act as the case may be. The Mysore Tenancy Act, 13 of 1952 was amended first by Mysore Act, 16 of 1957, and again by Mysore Acts 24 of 1962 and 12 of 1963. See. 4 of Act 16 of 1957 provided that every tenancy in respect of which the period of five years specified in s. 5 of Act 13 of 1952 was due to expire during, 1957 shall be deemed to be a tenancy for a further period of one year from the date on which the said period of five years was due to expire. Sub- sec. 3 of sec. 4 further provided that numberwithstanding anything companytained in any law, numberices given before the 11th day of March, 1957 by landlords to tenants terminating their tenancies at the expiry of the said period of five Years referred to in sub-sec. 1 on the ground of such expiry or on the ground that the landlord required the land for his personal cultivation shall be deemed to have been cancelled and shall have numbereffect and all applications made by landlords for possession of lands in pursuance of rent numberices shall on the 11th March, 1957 stand dismissed. In 1961, the Mysore Legislature passed the Mysore Tenants Temporary Protection From Eviction Act, 37 of 1961. The Act was to remain in force till March 31, 1962 or such other date number later than one year after that date as the State Government may by numberification specify. Sec. 3 of the Act provided that numberwithstanding any thing companytained in any law or agreement, decree or order of a civil or revenue companyrt or a tribunal, numbertenant shall be evicted from the land held by him as a tenant during the period that the Act remained in force. Sec. 4 of the Act staved during the operation of the Act all suits and proceedings in execution of decree or orders and other proceedings for the eviction of tenants from the lands held by them as such. The result of these provisions would appear to be that though the tenants of the lands in these appeals were inducted thereon originally as annual tenants, they got a fixed and secured tenure for additional periods and as deemed tenants they ceased to be persons entitled to possession only for one year as provided by their original leases. The point, therefore, is whether they acquired as a result of these provisions any share in the companypensation. In view of these provisions the Special Land Acquisition Officer and the District Judge ought to have ascertained which neither of them did whether the-tenants had any interest in the land and whether they were entitled to any share in the companypensation payable in respect of lands under their cultivation. In the absence of the tenants before us, we find it difficult to into these questions. Nonetheless, we do feel that in fairness to the tenants if they are still on the land their interests ought to have been ascertained and if they are entitled in law to any bare. companypensation according to the market value of the land should be ascertained afresh and their, bare. if allowable to them, should be allocated to them. If this were to be done, the annual income of the, lands in question will have, to be ascertained afresh from the evidence on record or otherwise and the net total income after deducting, the companyts of cultivation and other outgoing ascertained in order to arrive if the companyrect market value. If the position of the tenants as a result of the operation of the Tenancy Act has changed so as to make them entitled to a part of the companypensation that also will require to be ascertained. This is, of-course. sub- ject to the bar of limitation under s. 18 of the Act-, for, it would prima facie appear that the tenants by appearing as witnesses for the claimants knew of the acquisition and the award and yet had made numberapplication to be made parties to the reference before the District Judge. Even if it is found that the tenants are number entitled to. any share in the companypensation, the lands under tenants cultivation and those personally cultivated by the, claimants cannot be. valued on the same footing for the grounds set out earlier. A fresh calculation of companypensation in any event of lands under the claimants cultivation is called for on the principles set out hereinabove. We, therefore, allow the appeals, set aside the judgment of the High Court and remand these, appeals to the High Court for a fresh calculation of companypensation in the light of the observation,-, hereinabove made and in accordance with law. If for that purpose it may become necessary in the opinion of the High Court for fresh evidence to be led, parties may be given liberty to adduce such further evidence. Costs of these appeals will abide by the result in the High Court.	Case appeal was accepted by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 492 to 493 of 1970. Appeals by certificate from the Judgment and order dated December 9, 1968 of the Madras High Court in W. Petition Nos. 4628 and 4630 of 1965. V. Rangam and A. Subhashini, for the appellant. Respondent did number appear. The Judgment of the Court was delivered by HEGDE, J. These appeals are by certificate. They are directed against the Order of the Madras High Court in two writ petitions in which Mandamus was issued to the Board of Revenue to companysider and decide the revision petitions filed by the assessee--respondent under S. 34 1 of the Madras General Sales Tax Act, 1959 1 of 1959 hereinafter called the ACT . The facts of the case lie within a narrow companypass. The res- pondent assessee was assessed to sales tax during the assessment years 1960-61 and 1961-62. Aggrieved by the orders of the assessing authorities, he went up in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed his appeals. Thereafter, he filed second appeal to the Sales Tax Appellate Tribunal, Madras. Those appeals were dismissed as having been time- barred. After the Tribunal dismissed the appeals the assessee moved the Board of Revenue under S. 34 1 to revise the assessment orders. The Board came to the companyclusion that it had numberjurisdiction to entertain those petitions. The High Court. in the writ petitions filed held that the Board had jurisdiction to entertain those appeals and companysequently issued a writ of mandamus to the Board to entertain the revision petitions and companysider them on merits. It is against that decision the State of Tamil Nadu has companye up in appeal. In these appeals we are called upon to determine the true scope of s. 34. S. 34 1 companyfers on the Board of Revenue suo moto power to call for and examine an order passed or proceeding recorded by the appropriate authorities under some of the provisions of the Act. S. 34 2 reads thus The Board of Revenue shall number pass any order under sub-section 1 if a the time for appeal against that order has number expired or b the order has been made the subject of an appeal to the Appellate Tribunal or of a revision in the High Court or c more than four years have expired after the passing of the order. The question for companysideration is as to what is the meaning of the expression the order has been made the subject of an appeal ? Whether an appeal against an order which was dismissde as having been barred by time can be companysidered as an order which had been made the subject of an appeal ? This question does present some difficulty. But in view of the circumstances, which we shall presently set out, we will number be justified in examining the companyrectness of the companyclusion reached by the High Court. As far back as 1963 the scope of s. 34 came up for companysideration before the Madras High Court in Erode Yarn Stores v. State of Madras 1 . Therein the assessee companytended that once an appeal is filed before a Tribunal, the Board is precluded from invoking its power under s. 34. The State of Madras companytroverted that position. Therein the State companytended that before the jurisdiction of the Board to exercise its power under s. 34 can be held to be taken away, the appeal filed before the Tribunal must have been an effective appeal and that an appeal which was dismissed on the ground of limitation is number an effective appeal. The High Court of Madras accepted that companytention and decided the case in favour of the State. In arriving at the companyclusion that the words subject of an appeal mean subject of an effective appeal High Court took into companysideration the mischief that would otherwise arise namely, all that an assessee, who want,, to stifle the Boards suo motu power of revision, has to do is to file a time-barred appeal and get it dismissed. It was because of that difficulty the High Court in Erode Yarn Stores case came to the companyclusion that expression the order which has been the subject of an appeal as meaning subject of an effective appeal. In arriving at that decision. the High Court did take into companysideration the decision of this Court in Messrs. Mela Ram Sons v. The Commissioner 1 14 S.T.C. 724. of Income-tax, Punjab 1 wherein this Court ruled that an appeal presented out of time is an appeal and an order dismissing it as time-barred is one passed in an appeal. That was a decision rendered under the provisions of the Indian Income Tax Act, 1922. The question for decision in that case was whether an appeal lay against an order of the Appellate Assistant Commissioner dismissing an appeal as time-barred. In the circumstances of the present case it is number necessary for us to companysider whether the decision of the High Court in Erode Yarn Stores case was companyrectly decided. That decision was rendered in respect of a provision in a State Act. It was rendered as far back as 1963. In that case the High Court accepted the companytention of the State. That decision has stood the field till number. It must have governed several cases, decided thereafter. After that decision was rendered the Act had been subjected to several amendments. The Legislature has number thought fit to amend s. 34. To put it differently the State had prayed for and obtained a particular interpretation of s. 34. It has accepted that interpretation to be companyrect ever since 1963. Under these circumstances it is number proper for this Court to upset that decision at this late stage and disturb a settled position in law. If the State wants to change the law it is open to it to move the Legislature for making the necessary amendments. We find it difficult to appreciate the State companyduct in taking inconsistent positions. Yet another companytention was taken on behalf of the State. It was companytended on behalf of the State that the assessee had numberright to invoke the jurisdiction of the Board to exercise its revisional power. This companytention too has to be rejected. The power is companyferred on the Board to remedy any injustice. It is open to an assessee or the Revenue to bring to the numberice of the Board any error made by the subordinate authorities. It is up to the Board to companysider whether the case is a fit case for exercising its revisional jurisdiction. If the Board had gone into the case and companye to the companyclusion that there was numberjustification for exercising its jurisdiction under s. 34, then in the absence of any vitiating circumstance recognised by law the High Court would number have interfered with the discretion of the Board. But what has happened in this case is that the Board had refused to exercise its jurisdiction under the erroneous view that in view of the dismissal of the assessees appeal it was number companypetent to entertain the petition. The decision of the Board was vitiated by an error apparent on the face of the record. Hence the High Court was justified in interfering with that decision. Whether the case is. a fit one for exercising jurisdiction of the Board or number is entirely a matter for the Board to companysider and decide. Mr. Rangam drew our atten- 1 1956 S.C.R. 166. tion to two decisions of the Andhra Pradesh High Court where the High Court held that numberappeal lay against the order of the Andhra Pradesh Revenue Board under s. 20 1 of the Andhra Pradesh General Sales Tax Act, 1957, which provision is similar to S. 34 of the Act. Those decisions lend numberassistance to the appellants case. In the result these appeals fail and they are dismissed.	Case appeal was rejected by the Supreme Court
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1352 of 1970. Appeal by certificate from the judgment and order dated 7th day of August 1967 of the Allahabad High Court in Special Appeal No. 94 of 1967. C. Chagla, Suresh Sethi, R. K. Maheshwari, Maya Krishan and B. P. Maheshwari, for the appellant. D. Karkhanis- and O. P. Rana, for the respondents. The Judgment of the Court was delivered by HEGDE, J.-This is- an appeal by certificate The only ques- tion that arises for decision is whether groundnut is oilseed. The High Court has companye to the companyclusion that the groundnut is oilseed. The question is to the nature of groundnut came up, for companysideration in companynection with the levy of purchase-tax on the purchase of oilseed. The assessee in this case is a manufacturer of oil and the assessee appears to have purchased groundnuts in large quantity for the manufacture of oil. He companytended before the assessing authorities as well as before the High Court, unsuccessfully, that groundnut is number oilseed. In support of that companytention, he relied on the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Bakhat Rai Co. 18 S.T.C. 285 and the decision of a single Judge of Punjab Haryana High Court in Hans Raj Choudhri v. J.S. Rajyana, Excise and Taxation Officer 19 S.T.C. 489 . These two decisions undoubtedly support his companytention. The learned Judge of the Allahabad High Court have number accepted those decisions as laying down the law companyrectly and we are in agreement with the view taken by the learned Judges of the Allahabad High Court The petitioner in his Writ Petition has definitely stated that he purchased groundnuts mostly from cultivators for the manufacture of oil. Hence there is numberdoubt that he purchased groundnut for the purpose of manufacturing oil. We shall number proceed to companysider whether groundnuts are seeds and further whether they are oilseeds. In finding out the true meaning of term oilseeds found in the Sales-tax law in question, we are number to refer to dictionaries. We are to find out the meaning ascribed to that term in companymercial parlance. See the decision of this Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh 19 S.T.C. 469 . There can hardly be any doubt that in companymercial. circles Ground nut is dealt with as oilseed. The companymercial journals and newspapers while quoting the market price of oilseeds list groundnuts as one of the species of oilseeds. From this, it is clear that in companymercial circles groundnut is treated as oilseed. A seed is one which germinates. It is number disputed that the groundnut germinates. Hence it is undoubtedly seed. The next question is whether it is generally used for manufacture of oil. Here again, there can hardly be any doubt that groundnut is Mostly. used for the manufacture of groundnut oil which is used in the manufacture of Dalda and other companyking media. Groundnut is one of the items which is mostly used in this companyntry for the manufacture of companyking media. In our opinion, both the Madhya Pradesh High Court and the Punjab Haryana High Court were wrong in holding that groundnut is number oilseed.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 197 of 1972. Appeal by special leave from the judgment and order date 24th day of February 1972, of the Delhi High Court in Cr. Rev. No. 469 of 1970. C. Agarwala and A. K. Gupta for the appellant. P. Bhandari and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by DUA, J. This appeal by special leave is directed against the judgment and order of a learned single Judge of the High Court, of Delhi dated February 24, 1972 rejecting the appellant revision petition under ss. 430 and 561-A of the Code of Criminal Procedure. In that revision he had prayed, that the charge framed. against him by a Magistrate, First Class, New Delhi on July 3, 1969 under s. 9 of the Punjab Security of State Act Punjab Act number 12 , 1953 hereinafter called the Act be quashed. The special leave petition originally came up for preliminary hearing before a bench of this, Court on August 18, 1972 when numberice to show cause was issued. On September 19, 1972 the hearing was again adjourned for a week to enable the petitioners companynsel to file a writ petition. It appears that numberwrit petition was filed but on September 26, 1972 this Court granted special leave on usual terms. The appeal was also directed to be heard on the existing paper book with liberty to the parties to file such additional documents as they wished to file, from the record. The appeal was directed to be listed for hearing in the second week of January, 1973. Sometime in January, 1973 the appellant presented criminal miscellaneous petition number 32 of 1973 seeking permission to urge additional grounds. In that application the companystitutional Validity of s. 9 of the Act was questioned. The said section, according to the averment in that Petition, infringes the fundamental., right of speech. guaranteed under Art. 19 1 a of the Constitution. It is alleged by the prosecution that the appeal ant had addressed a public meeting of the employees of the Defence Department on October 9,,1968 and in the companyrse of his speech he had incited the said employees to companymit offences prejudicial to the security of the State, or to the maintenance of public order. The Magistrate had, on perusal of the documents filed under s. 1973, Cr. P.C. framed a charge against the appellant punishable under S. 9 of the Act. According to the judgment of the High Court the offending portion of the speech which had been delivered in Hindi reads as follows There will be hunger strike at Chavan Sahibs kothi No. 1 Race Course Road. If- Chavan Sahib thinks that they will be in position to crush us with the, assistance of C.R.P. and S.F. then that is his misunderstanding. Chavan Sahib when the Britishers had to leave this companyntry then the same military and police will push you out. Because these children of military and. police personnels are also hungry they also require bread for eating. Therefore, the day has to companye when after their unity these workers will send you out. Comrades the Government suffered the moral death when it promulgated the ordinance. Because we had numberidea of starting any violance, when we demanded bread, clothes and house. This struggle of ours will companytinue. If Government servants die then other labourers. will take this struggle ahead. One thing more I want to tell you that if there will be numbercelebration of Diwali in the house of our fifty thousand people, then there shall be darkness in the houses of these ministers. I want to tell you Chavan Sahib that if your repression companytinued in the same way, one Udham Singh will be born amongst these labourers who will number live you live as Udham Singh killed Dyre after going to London. Annexures I and II attached to the petition under Art. 136 of the Constitution stated in para 4 thereof to be the English translation of the statements of the two police officers on the basis of which. the charge sheet had been filed in companyrt companytained a companyple of more sentences which do appear to be of some importance. But we companysider it unnecessary for our present purposes to refer to them. The High Court, companysidered the part of the speech reproduced above and after referring to the decisions of this Court in State of Bihar v. Shrimati Shailbala Devi 1 , Rain Manohar Lohia v. State of Bihar 2 and Sudhir Kumar Saha v. The Commissioner of Police 3 dismissed the revision holding that prima facie the remarks made by the appellant in his speech amounted to an offence under s. 9 of the Act. It was, however, added that it was open to the petitioner either by cross-examination of the prosecution A.I.R. 1952 S.C. 320. 2 A.I.R. 1966 S.C. 740. 3 1970 1 S.C.C. 149. witnesses or by adducing evidence in defence to show that in the circumstances under which these remarks were made they did number amount to an incitement to an offence prejudicial to the security of the State or the maintenance of public order. The High Court felt that at that stage it companyld number be said.that there was numberprima facie case against the petitioner under S. 9 of the Act. In this Court Shri S. C. Agarwal questioned the vires of S. 9 of the Act, companytending that this section is violative of the fundamental right guaranteed by Art. 1 0 1 a of the Constitution. No doubt, this point was number raised in the High Court and in this Court also it was specifically sought to be raised only in the subsequent applications presented in January, 1973 but as the speech in question was itself sought in para 5 of the petition for special leave to be protected by Art. 19 1 a and as it was a pure question of law raising the companystitutionality of s. 9 of the Act we permitted the companynsel to raise it. Section 9 of the Act reads Dissemination of rumours, etc.Whoever a makes any speech, or b by words, whether spoken or written, or by signs or by visible or audible representations or otherwise publishes any statement, rumour or report, shall, if such speech, statement, rumour or report undermines the security of the State, friendly relations with foreign States, public order, decency or morality, or amounts to companytempt of Court, defamation or incitement to an offence prejudicial to the security of the State or the maintenance of public order, or tends to overthrow the State, be punishable with imprisonment which may extend to three years or with fine or with both. This section on its own plain reading taken within its fold all the objectionable matters which had been taken by sub- Art. 2 of Art. 19 out of the guaranteed freedom of speech and expression Protected by cl. a of Art. 19 1 . In order to fully understand the freedom of speech and expression guaranteed by the Constitution it is necessary to reproduce Art. 19 1 a and 2 - Right to Freedom 19 1 AR citizens shall have the right- a to freedom of speech and expression Nothing in sub-clause a of clause 1 shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restriction on the exercise of the right companyferred by the said sub-clause in the interests of the sovereignty and integrity of India, the security of the State friendly relations with foreign states, public order, decency or morality or in relation to companytempt of companyrt, defamation or incitement to an offence. It may appropriately be pointed out here that sub-Art. 2 was amended in 1963 so as to include in the limitation companytained therein reasonable restrictions in the interest of the sovereignty and integrity of India. This limitation was number in this sub-Article in 1953 but as it does number affect the question raised in this case we need say numberhing more about it. Reading s. 9 of the Act and Art. 19 2 of the Constitution it is obvious that the only matter specifically companytained in s. 9 in addition to those stated in Art. 19 2 relate to the offending speech, words or other publications which tends to overthrow the State. Now this matter would clearly also fall within the sweep of the expression incitement to an offence prejudicial to the security of the State companytained in s. 9 and within-Art. 19 2 where it speaks of reasonable restrictions in the interest of the security of the State. Anything tending to overthrow the State must necessarily be prejudicial to the security of the State and, therefore, a law can be made placing reasonable restrictions on the right of freedom of speech and expression in this respect in the interests of security of State. Prima facie, therefore, s. 9 clearly falls within the express language of Art. 19 2 . On behalf of the appellant great stress was laid on Superintendent of Central Jail, Fatehgarh v. Ram Manohar Lohia 1 where this Court struck down as unconstitutional s. 3 of the U.P. Special Powers Act U.P. Act 14 of 1932 . That section reads Whoever by word, either spoken or written or by signs, or by, visible representations or otherwise, instigates, expressly or by implication, any person or class of persons number to pay or to defer payment of any liability, and whoever does any act with intent or knowing it to be likely that any words, signs or visible representations companytaining such instigation shall thereby be companymunicated directly or indirectly to any person or class of persons, in any manner whatsoever, shall be punishable with imprisonment which may extend to six months, or with fine, extending to Rs. 250, or with both. On the face of its plain language this section is materially different from s. 9 of the Act. It therefore does number require. elaborate argu- 1 1962 2 S.C.R. 321. ment for distinguishing this decision. Section 3 of the P. Act is clearly hit by. Art. 19 1 a and can on numberreasonable or rational argument be saved by Art., 19 2 . There being absolutely numbersimilarity between that section and s. 9 of the Act with which we are companycerned, the ratio of that decision cannot serve as a precedent for invalidating s. 9 of the Act. The appellants learned companynsel then drew our attention to Kedarnath Singh v. State of Bihar 1 in which ss. 12A and 505, I.P.C. were held to be in the interest of public order and within the ambit of companystitutional limitations companytemplated by Art. 19 1 read with Art. 19 2 . On analogy of s. 124A as companystrued in than decision it was companytended that in order to bring s. 9 of the Act within the companystitutional limits of Art. 19 2 it must similarly be companystrued narrowly so that the fundamental, freedom of speech and expression is number unduly restricted. The operation of s. 9 of the Act, it was sub- mitted, should be limited only to such matters as involve incitement to violence. or intention or tendency to create public disorder or cause disturbance of public peace. The fundamental right guaranteed by Art. 19 1 a and the interest of public order protected by Art. 19 2 according to Shri Agarwals submission, must be, properly adjusted and a companyrect balance struck between two. In our opinion, the principle governing the companystruction of Art. 19 1 A read with Art. 19 2 is well crystallised by number in various decisions of this Court and it is unnecessary to companyer the whole round over again by going through them extensively. We of companyrse agree with Shri Agarwal that the fundamental right guaranteed by Art. 19 1 a and the interest of public protected by Art. 79 2 must be. properly adjusted and reasonable balance struck between the two. There can be numberdispute that there is numbersuch thing as absolute of unrestricted freedom of speech and expression wholly free from restraint for that would amount to uncontrolled licence which would tend to lead to disorder and anarchy. The right to freedom of speech and expression is undoubtedly a valuable and cherished right possessed by a citizen in our Republic. Our governmental set up being elected, limited and responsible we need requisite freedom of animadversion, for our social interest ordinarily demands free propagation of views. Freedom to think as one likes, and to speak as one thinks are, as a rule, indispensable to the discovery and spread of truth add without free speech discussion may well be futile. But at the same time we can only ignore at our peril the vital importance of our social interest in, inter alia, public, order and security of our State. It is for this reason that our Constitution has rightly attempted to strike a proper balance between the various companypeting social in- 1 1966 Supp. 2 S.C.R. 769. terests. It has permitted. imposition of reasonable restrictions on the citizens right of freedom of speech and expression in the interest of, inter alia, public order, security of State, decency or morality and impartial justice, to serve the larger companylective interest of the nation as a whole. Reasonable restriction in respect of matters specified in Art. 19 2 are essential for integrated development on egalitarian, progressive lines of any peace- loving civilised society. Article 19 2 thus saves the companystitutional validity of 9 of the Act. The analogy between s. 124A, I.P.C. and s. 9 of the Act is wholly misconceived and in view of the companyprehensive of Art. 19 2 we are unable to restrict s. 9 of the Act only to those speeches and Expressions which. incite or tend to incite Violence Learned companynsel also tried to refer us to some American decisions for developing the argument that the guaranteed freedom of speech and expression should be broadly companystrued but we did number companysider it necessary to go into the American decisions, numberwithstanding the fact that in Express Newspapers P. Ltd. v. Union of India 1 it was observed that American decisions were relevant for the purpose of understanding the scope of Art. 19 1 a . In our opinion, it is, hardly fruitful to refer to, the American decisions particularly when this Court has more than once clearly enunciated scope and effect of Art. 19 1 a and 19 2 . The test of reasonableness of the restriction has to be companysidered in each case in the light of the nature of the right infringed, the purpose of the restriction, the extent and the nature of the mischief required to be suppressed and the prevailing social and other companyditions at the time. There can be numberabstract standard or general pattern of reasonableness. Our Constitution provides reasonably precise, general guidance in this matter. It would thus be misleading to companystrue it in the light of American decisions given in different companytext. Section 9 of the Act is, in, our view, plainly within the legislative companypetence of the Punjab Legislature and it would be for the companyrt in which the appellant is being tried to decide as to how far the appellants speech is companyered by this section. Shri Agarwal made a strenuous effort to persuade us to companys- true the offending portion of the speech as reproduced in the judgment of the High Court and express our opinion whether- or number the charge against him has been lawfully framed. The charge reads as under That you, on or about the 9th day of October, 1968 at 4.30 to 5.55 p.m. near the Railway Pathak- in the area of Delhi Cantt. made a speech at a public meeting organised by Delhi Defence employees in which you 1 1959 S.C.R. 12. demanded or caused incitement to an offence prejudicial to the security of the State or the maintenance of public order and therein companymitted an offence punishable I under section 9 of the P.S. Act and within my companynizance. The appellant, it may be pointed out, had approached the sessions Court on revision to have this charge quashed. That companyrt apparently did number agree with the appellant. He then approached the High Court on revision where also he failed. The impugned judgment of the High Court does number show any serious legal infirmity resulting in failure, of justice which should induce this Court to interfere under Art. 136 of the Constitution. The submission that.at this Court has already granted special leave we must decide the question of the legality of the charge on the merits has number appealed to us. Even at the final hearing of an appeal by special leave this Court has to apply the same test which is attracted at the preliminary stage, when the leave to appeal is asked for. After leave the scope of the appeal is number enlarged and even at that stage the appellant cannot as of right claim adjudication on the merits if this Court feels that there is numbergrave injustice done to the appellant as a result of any serious legal, infirmity. We are unable find any such infirmity in the impugned judgment. The additional factor against our interference in this case in the interlocutory character of the order sought to be quashed. We have, however, numberdoubt that the learned Magistrate trying the appellants case will deal with all the points raised before him oil the merits with,out being, influenced by the tentative view expressed by the High Court which the appellant himself invited. We also hope that this case which relates to a speech said to have been delivered in October, 1968 and in, which the prosecution was initiated as far back as January, 1969 when the charge was put into companyrt, would be disposed of with due dispatch and without avoidable delay. This appeal fails and is dismissed.	Case appeal was rejected by the Supreme Court
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 264 of 1972. Appeal by special leave from the judgment and order dated March 6, 1972 of the Bombay High Court at Bombay in Cr. A. No. 164 of 1972. N. Sharma, for the appellant. B. Wad and Rine Sachthey, for the respondent. The Judgment of the Court was delivered by DUA, J.-The appellant in this appeal by special leave was tried in the companyrt of Session for Greater Bombay at Bombay for offences under s. 467, under s. 471 read with s. 467 and under S. 420, I.P.C. According to the prosecution the appellant was running an octroi clearing agency under the name and style of National Octroi Clearing Agency at the Mulund check-post. He used to attend to certain transactions relating to the transport companypanies, one of those companypanies being the Montgomery Transport Company. On December 16, 1962 a truck belonging to the said transport companypany bearing number MPR 2147 arrived at the check-post carrying a Depleix Machine to be delivered to Messrs Imperial Tobacco Company. There were two drivers and one cleaner in the truck. On being approached by them the appellant telephoned to manager Bakshi of the Transport Company to arrange for the payment of octroi which amounted to more than Rs. 8,000/-. The Manager, Bakshi and Director, Inderjit Singh went to the Imperial Tobacco Company the following day and after getting Rs. 8,196/- for the octroi reached the Mulund Check-post. The amount was handed over to the appellant in the presence of the driver. Actually only Rs. 81-80/- were required for the octroi with the result that Rs. 16/- were paid back to Messrs Imperial Tobacco Company by means of a cheque. During the investigation of another case arising out of an alleged forged receipt relating to octroi in respect of some imports by Messrs Pure Drinks Private.Ltd., it came to light that proper octroi had number been- paid on December 17, 1968 in respect of the transaction in question in the present case. The Assistant Assessor and Collector, Shri Karkhanis, after sending his superintendent Govind Charan to, the office of Messrs Imperial Tobacco Company he himself also visited the Companys office and they both felt that the receipt for the payment of octroi held by the said Company was number genuine. Having failed to trace the necessary relevant documents in the office files Shri Karkhanis lodged the companyplaint in February, 1969 and a case 3-L761Sup. CI/73 was registered After preliminary enquiry under Ch. XVIII Cr. P.C. the appellant was companymitted for trial to the companyrt of Session. According to,the trial companyrt the following points arose for determination Whether it is proved that the receipt, Article A is a forged document ? Whether it is proved that it is the accused who forged that receipt with intent to companymit fraud ? Whether it is proved that the accused used this receipt as genuine knowing it to be forged ? Whether it is proved that he cheated the Bombay Municipal Corporation, as alleged ? Whether it is proved that the accused cheated the Imperial Tobacco Co. of India Ltd., as alleged ? The companyclusions of the trial companyrt on these points were 1. In the affirmative. Not proved. In the affirmative, In the affirmative. Not proved. The evidence in this case is mainly, if number wholly, circumstantial and about 20 witnesses were examined including a handwriting expert. The trial companyrt felt that the case required evaluation of the evidence of Bakshi P.W. 4 , Inderjit Singh P.W. 18 and Handwriting Expert P.W. 17 . Driver Balwant Singh was number examined in the case. The trial companyrt in a lengthy judgment exhaustively discussed the evidence of these witnesses. It did number place implicit reliance either on Bakshi P.W. 4 or on Inderjit Singh W. 18 as, indeed in the testimony of both of them the trial companyrt found partly reliable and partly unreliable statements. The companyrt did number feel inclined to hold that their evidence was wholly unreliable. On evaluation of the evidence of the Handwriting Expert the trial companyrt felt that the receipt in question companyld number necessarily be held to have been forged by the appellant. After this observation follows the following passage in the judgment I do number, however, feel that this earns an acquittal for him The direct charge regarding the forgery companyld be taken as number proved we will have however to weigh the other evidence for finding out whether he companyld have used the document which is necessarily a fogged docu- ment, as a genuine document. For this purpose we will have to appreciate the evidence of the two witnesses about whom I have spoken quite a long time and we have also to appreciate the interval of time. What exactly the accused did within that half an hour when he took the money and returned, will have to be surmised, particularly in the absence of categorical evidence showing that the disputed receipt is executed by him. The evidence shows, it is a forged receipt. It is number prepared at the companynter. We may number be sure in finding out as to who wrote it. The accused may-have had his associates it he himself has number written it. Considering the way in which companynters are stated to be working, companysidering the amount involved and the short time limit when the accused reappeared legitimate payment across the companynter will have to be ruled out. That is number even suggested on behalf of the accused. He may have his own companylaborators. If we accept the version, which I do, then it was this receipt which was in the hands of the accused that was given over to the driver and from there onwards it reached the firm Messrs Imperial Tobacco Co. of India Ltd. I feel, the accused ought to be supposed to be aware that the real payment was made and what he carried companyld number be the real receipt. It is for this reason that I am feeling that the charge of using a forged receipt knowing it to be forged companyld be brought home to him. The trial companyrt thereafter dealt with the, charges of cheating and ultimately companyvicted the appellant for offence under ss. 471 read with 467, I.P.C. and for an offence under s. 420, I.P.C. Under the former he was sentenced to five, years rigorous imprisonment and a fine of Rs. 500/- with six months further rigorous imprisonment in case of default. Under s. 420 he was sentenced to rigorous imprisonment for two years. The substantive sentences were directed to be companycurrent. The appeal to the High Court was dismissed in limine with one word Dismissed. Before us on appeal by special leave the short point but one of vital importance to the appellant requiring our decision is whether the High Court was justified on the facts and circumstances of this case in unceremoniously dismissing the appeal in limine with one word Dismissed without making a speaking order indicating the reasons for the dismissal. The facts briefly stated by us and a close study of the lengthy judgment of the trial companyrt quite clearly show that the appeal in the High Court did raise points which were number only arguable, but were also substantial requiring critical scrutiny and serious appraisal and evaluation of the prosecution evidence and the circumstances of the case. The impor- tance of the opinion of the High Court on arguable points requiring companysideration on appeal in that companyrt when questions of fact or law are open to challenge by the appellant was emphasised more than 20 years ago by this Court in Mushtak Hussein v. The State of Bombay 1 when Mahajan J., as he then was observed at p. 820 With great respect we are however companystrained to observe that it was number right for the High Court to have dismissed the appeal preferred by the appellant to that companyrt summarily, as it certainly raised some arguable points which required companysideration though we have number thought it fit to deal with all of them. In cases which prima facie raise numberarguable issue that companyrse is, of companyrse, justified, but this companyrt would appreciate it if in arguable cases the summary rejection order gives some indication of the views of the High Court on the points raised. Without the opinion of the High Court on such points in special leave petitions under article 136 of the Constitution this Court sometimes feels embarrassed if it has to deal with those matters, without the benefit of that opinion. Since then in a series of decisions quite a number of them reported and several unreported this Court has companysistently drawn the attention of the High Courts to the eminent desirability of giving an indication of their views on the points raised in arguable cases in accordance with the legal position enunciated by this Court. Such a companyrse is numbermal in cases which raise fairly arguable questions of fact or law. In one of the latest decisions of this Court in K. K. Jain v. State of Maharashtra 2 some of the earlier decisions were again numbericed and it was companysidered necessary to repeat the emphasis laid on the necessity of recording reasons by the High Court for dismissing appeals raising questions which cannot be companysidered to be unsubstantial or number arguable. In that decision it was reiterated, inter alia, that reasons prevailing with the High Court for dismissing the appeal, if recorded, would have been of valuable assistance to this Court in finally disposing of the appeal on merits. Another advantage of recording such reasons. is that the accused-appellant who may number always be present in companyrt would have the satisfaction of knowing from the judgment that the points appropriately arising for companysideration in his case were actually argued and only companysidered by the High Court while dismissing his appeal. This would, inter alia, tend to promote companyfidence of the parties companycerned in our judicial process. in the present case had the High Court recorded its reasons for dismissing the appeal it would have better enabled the appellants lawyer to companysider the advisibility of appealing 1 1953 S.C.R. 809. A.I.R. 1973 S.C. 243. under Art. 136 of the Constitution and after filing the appeal would have afforded valuable assistance both to the companynsel appearing in this Court and to us in the final disposal of the appeal without feeling the necessity of remanding the case to the High Court for re-hearing. The remand numberdoubt must result in further delay in the final disposal of the appellants appeal in the High Court, and this indeed is regrettable. But in the absence of the opinion of the High Court which that Court was under the law expected to record we are left guessing about the line of reasoning the High Court would have adopted after appropriate scrutiny of the evidence on the record. The appellant is entitled to have a proper decision on the points arising in his appeal by the High Court on due appraisal of the evidence in accordance with law. The legal position on the point in question has been authoritatively settled and declared by this Court and the same has been frequently reiterated in its decisions. The law reports are so full of them that it appears to us to be somewhat surprising that the companynsel appearing in the appeal in the High Court Should have been unaware of it. It, however, does seem that the attention of the High Court was number drawn to these decisions, for had that Court been apprised of the law as authoritatively declared by this Court, it is inconceivable ,that the present appeal would still have been dismissed without indicating the reasons in support of it. Had the High Court recorded reasons the delay necessitated by this remand companyld have been avoided. But in the circumstances we have numberoption but, to allow the appeal and remand the case to the High Court for rehearing and deciding the appeal after companysidering the points raised and recording its reasons in accordance with law. We have taken care number to express any opinion on the merits of the case either way.	Case appeal was accepted by the Supreme Court